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BIA/Kelsey: DOOH ad revenues to grow to $3.7 billion by 2013

November 3, 2009

Recently announced analysis by BIA/Kelsey indicates digital out-of-home (DOOH) advertising, which leverages spending trends toward digital media, hyperlocal, personalization and engagement metrics, is poised to be the next major growth area in local advertising.

BIA/Kelsey forecasts that DOOH ad revenues will grow from $2.2 billion in 2009 to $3.7 billion in 2013, representing a compound annual growth rate of 13.5 percent. During the same period, traditional out-of-home (OOH) advertising revenues will only grow at a CAGR of 1.4 percent, from $4.4 billion in 2009 to $4.6 billion in 2013.

In a recent report on DOOH entitled "Digital Out-of-Home: Hyperlocal and Hyper Growth," BIA/Kelsey says that there are more than 2,100 outdoor advertising companies in the United States. The newer digital segment has more types of companies and is much less concentrated and faster growing than OOH. The OOH advertising industry is heavily concentrated with just three firms earning 85 percent of traditional billboard revenues. Billboards account for 66 percent of all OOH revenues. The remaining 15 percent of the market is highly fragmented.

Rick Ducey, chief strategy officer, BIA/Kelsey, said:

OOH is relatively easy to plan and buy since it is so concentrated. DOOH must get easier to plan, buy and measure in order to reach scale. With consolidation, partnerships and interoperable platforms, we see the buying process becoming more integrated, which will spur growth.

The outlook for DOOH is among the local advertising topics on the agenda at BIA/Kelsey's upcoming conference, Interactive Local Media 2009 (ILM:09), to be held Dec. 9-11 in Los Angeles, Calif. The program features a session titled "Digital Out-of-Home: Expanding the Interactive Experience for the Consumer," which will cover the emergence of the "fourth screen" for audience engagement through video screens at gas stations, on city buses, on roadside billboards, in-store, and in venues such as bars and restaurants, health clubs and public spaces.

Moderated by BIA/Kelsey's Ducey, this session will include panelists Adam Bleibtreu, CEO, Retail Media Co.; Stephen Randall, CEO, LocaModa; and Lori Schwartz, senior VP and director, Interpublic Emerging Media Lab.

Brian Buchwald, executive VP, Local Integrated Media & NBC Everywhere, NBC Universal, is also expected to touch on DOOH during his keynote address on day two, in which he will share his company's local strategy and perspective on the future of Web-infused TV.