The U.S. remains the biggest market for digital out-of-home media, but China is closing on it rapidly – and American growth is largely driven by digital billboards, rather than place-based digital signage networks, according to the latest analysis from PQ Media.
Although the U.S. accounts for about $2bn of the worldwide total of $7bn in DOOH advertising revenue, it lags behind the global 15 percent growth rate, says PQ. An increase in American operator revenue of around 11 percent in 2011 was due in large part to 20 percent growth in revenue from digital billboards, while revenue from place-based networks rose by only 7.5 percent, thanks in part to “substantial slowdown in the cinema category”.
By contrast, China is the fastest-growing market, with total DOOH revenues jumping nearly 40 percent in 2011 to $1.44bn. China and Japan are also the next biggest after the U.S. in terms of current size, while Britain leads the European market and Brazil in Latin America. Thailand and Brazil have the highest penetration of DOOH into the overall out-of-home market, with digital accounting for half of all out-of-home revenues in the former and a third in the latter.
Up and up
Worldwide, digital out-of-home revenue last year reached just under $7bn. Of that, about $5bn was from place-based networks – DOOH in venues such as malls, cinemas and airports – with the remainder generated by digital billboards.
This year, it is expected to grow by around 19 percent to top the $8bn mark, driven by economic recovery and increased interest from major brands. In some markets, the proliferation of political and Olympics-related advertising on broadcast TV may also create a shortage of inventory in that medium, encouraging advertisers to look elsewhere, PQ predicted.
Said PQ’s CEO Patrick Quinn: “Despite the growth deceleration in 2011, we believe 2012 has the potential to be a watershed year for digital place-based networks, particularly in the second half, as there appears to be a good chance for network operators to differentiate from other emerging media and prove their value as part of integrated media solutions.”
In the longer term, PQ expects global DOOH revenues to grow at a compound annual rate of around 21 percent over 2011-16, significantly higher than in the previous five years.