Content

OOH ad revenues hit record low in 2020

Photo: iStock

September 14, 2021

OOH advertising revenues across the globe, including all digital, traditional and ambient media platforms, declined 13.3%, to $51.63 billion, in 2020 — the steepest drop the OOH ad industry has ever endured. The decline was driven down by COVID-19 and the pandemic's aftereffects, according to research from PQ Media.

Although 2020 was the most difficult year for the OOH media industry, 2021 has already shown strong recovery. Global OOH revenues are expected to increase 6.6% to $55.03 billion, followed by accelerating growth in 2022 that is being fueled by double-digit expansion in the DOOH segment in both years, according to PQ Media's Global Digital Out-of-Home Media Forecast 2021-2025.

While recessions have negatively impacted OOH media throughout the medium's history, the pandemic was especially brutal due to the devastating combination of the ad pullback amid weakening economic conditions and the stay-at-home mandates that sapped auto, transit and retail traffic from key OOH media locations worldwide, according to a press release on the report's findings.

The ambient OOH media segment did provide a bright spot, where boxes and wraps saw an influx of orders due to the rise of home deliveries. Aside from grocery stores, pharmacies and big-box retailers, the majority of digital place-based networks and digital signage operating in the retail and entertainment sectors saw plummeting ad revenues because of store closures and stay-at-home restrictions during the lockdown. The entertainment industry, particularly theatrical films and live events, were decimated as major annual concerts, festivals and potential blockbuster films were canceled or postponed, while theme parks closed and many sporting events were canceled or played with no fans in attendance.

Meanwhile, average weekly consumer time spent with OOH media, which consistently grew for a decade, declined 6.2% worldwide in 2020 to an average of 1 hour and 7 minutes, driven down by cancellations and postponements of major international events, such as the rescheduling of the 2020 Summer Olympics in Tokyo to the summer of 2021.

"While the economic damage wrought by the pandemic squelched a decade-long expansion that was building further momentum going into 2020, our research indicates that OOH media, and particularly DOOH media, is poised for strong growth in the second half of 2021, as the healthcare, transit, and corporate and education venue categories are expected to surge ahead with accelerating double-digit growth in 2022," PQ Media CEO Patrick Quinn said in the report. "Among future growth drivers will be the continued expansion of programmatic media buying to OOH media operators outside the top-tier players, increased use of mobile integration tactics and improving ROI metrics driven by smart technology."

Miles driven by global consumers had already exceeded 2019 levels by mid-2021, while static and digital billboards and signage in key indoor and outdoor locations were also recording strong growth in demand and CPMs versus the prior two years. Meanwhile, major international sporting and entertainment events were coming back on track for the second half of 2021 and 2022, with DOOH being used to provide ad-supported live performances, results and updates in key markets across the globe.

As a result, global OOH ad revenues are expected to grow 9% in 2021 and consumer time spent with OOH media is projected to rise 1.6% this year, fueled by a 6.3% surge in average weekly consumer exposure to DOOH media. Going forward, global OOH ad revenues are projected to rise at a 7.3% CAGR from 2021-2025, according to PQ Media. Transit will re-emerge as the hottest overall OOH media location category in 2022 due to major markets upgrading airport terminals, adding new rail lines and deploying new digital transit signage and networks in high-traffic areas popular with tourists.

In the U.S., after plunging 23% in 2020 to $2.89 billion, DOOH ad spend is projected to rebound in 2021, accelerate sharply in 2022 and rise at an 8.9% CAGR to $4.43 billion in 2025 for a 37.1% share of total U.S. OOH ad spend.

Corporate and education DPNs will post the strongest growth in 2021, up 19.4%, followed by healthcare (up 14.1%) and transit (up 13.7%), according to PQ Media. Healthcare will surpass cinema to become the largest DPN category in the U.S. by year-end 2023, marking the first time cinema will not lead the overall U.S. market.

In another first regarding the U.S. market, China will top America as the world's largest overall OOH market and the biggest DOOH market in 2021 and will remain the world's largest OOH and DOOH market throughout the 2021-2025 period. China will generate ad revenues of $10.84 billion in 2021, while the US will generate $9.37 billion.

The six largest global OOH media companies — JCDecaux, Clear Channel Outdoor, Focus Media, Stroer, Lamar and Outfront Media — were the only OOH operators to exceed $1 billion in revenues in 2020. Nine other global OOH operators generated revenues of more than $110 million, resulting in the Top 15 operators accounting for 23.3% of worldwide OOH ad revenues.