China has become by far the world’s largest market for digital out-of-home advertising, according to a new report from Kinetic Worldwide which assesses the global industry as one which has developed successfully but could have made even better progress.

Annual revenue of $1.84bn makes the Chinese DOOH market nearly twice as big as its U.S. counterpart, with $1.1bn.

The UK comes a distant third at $157m, and another substantial gap separates Britain from the fourth-largest market, Germany, with $51m revenue. Thailand takes a surprisingly high fifth place, with $24m. Spain and Italy are both around $16m, while the Netherlands, France, Switzerland, Malaysia, Turkey and India all fall into the $10-13m range. Canada and Latin America, where Kinetic does not operate, was not covered.

China also leads in terms of digital spend as a proportion of total out-of-home revenue, at 36 percent. Digital takes 19 percent of the market in the U.S., and 11 percent in the UK – compared with less than five percent in other European territories. Another surprisingly high-scoring chart entrant is the Philippines, with ten percent of out-of-home revenue attributable to DOOH.

Important components of the flourishing Chinese market include roadside LED video walls at major junctions as well as public transportation advertising, covering both rail and bus. However, it is not simply a much larger version of  American or European DOOH: “Most Chinese clients use digital screens in the same way as a static poster,” says Kinetic.

What we got wrong

While Kinetic has been generally bullish on the digital out-of-home medium, however, and acknowledges rapid growth worldwide, it does raise the possibility that the numbers in many territories could have been even more impressive if the industry’s growth had not been beset by several well-known difficulties.

Many new media owners have arisen to exploit the market, says Kinetic, yet “after much experimentation and technology reinvention, only 20 percent of those who were in business four years ago remain in existence”.

Problems include the lack of standard metrics – although Kinetic suggests that the arrival of the Outdoor Video Advertising Bureau might have alleviated this – as well as the fragmentation of the market into numerous relatively small networks, and undeliverable promises being made for the medium.

“But the key issue has been early adopters not maximising the advantages of digital or using the medium properly,” the firm continues. It says that digital out-of-home “is not there to replace any media and so exists to offer a solution, not just a channel. We must stop thinking about media and start developing solutions.”

Kinetic adds, however, that we have now reached a “tipping point” in the quantity of creative work developed specifically for digital out-of-home, implying that the medium is starting to be used in a more effective way.

www.kineticww.com
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