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DPAA shows 25% spike in DOOH ad revenues for 2010

The DPAA's DOOH ad numbers for 2010 look good, but the picture could be even rosier than it seems.

April 6, 2011 by Christopher Hall — w, t

Digital signage ad revenue reporting from the Digital Place-based Advertising Association indicates that growth rates for the industry sector are picking up steam.

But some in the industry suggest the picture could potentially be even rosier than the DPAA numbers suggest.

Based on information collected by accounting firm Miller, Kaplan, Arase & Co., advertising revenue for the digital place-based, or digital out-of-home, sector showed a more than 25 percent spike in growth last year, the DPAA recently announced.

That growth spike builds on 2009's growth rate of 1 percent-plus, that in a year when most major media suffered steep declines. Overall, the DPAA said, advertising revenue in the sector for 2010 is estimated to have been $1.1 billion.

"This industry is coming together, and increasingly advertisers are embracing the ability to engage consumers on the go, where they work, shop, dine, travel and play, closer to the point of purchase than the sofa in their living rooms" Captivate Network President and DPAA Chairman Mike DiFranza said in the announcement.

From the announcement sent out by the DPAA it's not clear from where Miller, Kaplan, Arase & Co. drew the information for the study, but DPAA member networks are asked to provide their advertising revenues, confidentially, to the accounting firm on a quarterly basis, according to the DPAA website.

DPAA recently expanded the scope of the ad revenue reporting to include non-member networks, but to date only one non-member network provides its data, according to the website.

Real Digital Media CEO Ken Goldberg said in an email that while it is "good news that a third-party study has indicated very robust growth in the industry," more clarity about the basis for the study would have been even better.

"Since there is no indication of how many networks were polled in total, it is difficult to assess this as representative of the industry," he wrote. "My theory is that if a broader panel of non-DPAA members had been polled, the increase would have been higher, since many non-DPAA members would have been working off of a smaller base. So the news may actually be better than it seems through the very narrow view of DPAA."

Despite the lack of clarity, though, the results from the DPAA report indicate that DOOH is trending as a truly powerful form of media, digital signage consultant and author Keith Kelsen said in an email. For any new screen format to become a powerful media format takes time, but DOOH reached a tipping point last year and has become unstoppable, he wrote.

"To get the industry to this point it has taken a lot of proof points, standards, dedicated individuals and evangelizing to the advertising agencies," he wrote. "DPAA deserves a huge pat on the back for pushing the agenda forward."

Kelsen wrote that he's hearing from his sources that networks in the first half of 2011 are tracking at a 20 percent revenue growth. And last year's spike and this year's continued success look to be just the bgeinning, he wrote:

"As consolidation takes place within the ad network segment over the next few years, the ease of purchasing media will further accelerate agency participation and directly increase advertising revenues for 2011 and 2012."

Advertising Revenue Growth

Sources:  Miller, Kaplan, Arase for Digital Place-based media, and 2010 Kantar Media for all other media

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