Global out-of-home media ad spend, including all digital, traditional and ambient media, declined 13.3% to $51.63 billion in 2020, driven down by the deep impact of COVID-19, but global OOH revenues are projected to rise 6.6% in 2021 and post accelerating growth in 2022, fueled by double-digit expansion in the digital OOH media segment, according to new research released by PQ Media.
Global out-of-home (OOH) advertising revenues, 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, driven down by the deep impact of COVID-19 and the pandemic’s aftereffects worldwide, according to new research released today by PQ Media.
Although 2020 was the most difficult year on record for the entire out-of-home media industry, this year has already shaped up into a strong recovery, with global OOH revenues expected to increase 6.6% to $55.03 billion, followed by accelerating growth in 2022, fueled by double-digit expansion in the digital OOH (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 out-of-home media locations worldwide. Billboard CPMs, both digital and traditional, plummeted from desolate highways and vacant city streets, while the transit category was also severely affected, with fewer people flying and riding trains, which led to ads on public transportation being barely seen. In the retail sector, malls were hit particularly hard, as decreased foot traffic made ads on escalators and elevators virtually obsolete.
A bright spot amidst the thick clouds in 2020 was in the ambient OOH media segment, where boxes and wraps saw an influx of orders due to the skyrocketing number of home deliveries. Aside from grocery stores, pharmacies and big-box retailers, the majority of digital place-based networks (DPNs) 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 out-of-home 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 & education venue categories are expected to surge ahead with accelerating double-digit growth in 2022,” said PQ Media CEO Patrick Quinn. “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 9.0% 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.
Meanwhile, with the healthcare, transit and roadside venue categories surging to the fore as growth leaders in the 2021-2025 period, and cinema rebounding from its double-digit crater in 2020, global DOOH media revenues will rise at a 12.2% CAGR to $25.0 billion in 2025, accounting for 34.2% of all OOH ad spend. Global DOOH exposure time will increase at a 7.3% CAGR to nearly 30 minutes per week in 2025, grabbing a 40.4% share of total consumer time spent with OOH media, according to the Global Digital Out-of-Home Media Forecast 2021-2025.
In the United States, after plunging 23.0% 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 US OOH ad spend. Corporate & 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 US by year-end 2023, marking the first time cinema will not lead the overall US market.
In another first for the US 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. Other markets to exceed $1 billion in revenues this year include Japan, the UK, Germany, France, Brazil, Russia, Australia and South Korea.
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.