OOH grows by 3% in 2014 to become a £1 billion sector for the first time

OOH Growth: Becoming a Billion-Dollar Sector in 2014

Confirmation is in that Out of Home grew by 3% in 2014 to 1,018,992,650 (1.02bn). The strong performance followed a sluggish start to the year and was boosted by economic recovery and consumer spending; the sustained relevance of the retail and mobile experience; a World Cup year, strong Media Owner investment in quality and digital OOH; a reiteration of the value of broadcast reach amongst advertisers and strong validation by Route that OOH can reach young and upmarket audiences; continued effectiveness evaluation; and a healthy performance by sectors including retail, technology and finance.

Digital OOH accounted for 27% of the OOH spend, up +28% for the year and continuing its steady rise, on the back of media owner investment and a flexible and contextual use of the medium. Talon’s own spend in digital was even higher than this percentage.

A strong Q4 performance, where OOH grew by 6%, reflects a strong finish to the year, with the retail sector buoyant (retail sales were up 1% in December around a strong Xmas and a knock-on effect of Black Friday and up again in January 2015). The strong finish to OOH transferred into January 2015, where occupancy rates and revenues have continued to perform well.

In 2014 – and in Q4 in particular – the Transport sector has led growth – up nearly 8% – although Roadside has also shown an uplift. Traditional transport sites continue to drive spend, with a lower impact of digital OOH, compared to roadside, where digital is up 15% and Retail (+42%).

Our view for the year ahead is for continued growth, as media owner investment continues into both digital and quality backlights and across Roadside, Transport and Mall environments in the UK’s key cities, a strong Q1, a Rugby World Cup, continued TV inflation and OOH’s ability to deliver broadcast reach, and stronger technology/mobile integration with OOH are all likely to have an effect. Much could depend on the outcome of the Election in May. For a confirmation of these factors, please see Eric Newnham’s formula for success in OOH around Innovation, Transformation and Location here.

2015 promises continued change in OOH and we anticipate a re-focus on the power of reach, further media owner consolidation and potential contract changes, plus a renewed focus on data (complementing and overlaying Route), the increased use of contextual and location planning in OOH and the identification of greater affinity with mobile and technology that will help demonstrate how OOH can stay hugely relevant to communicating to key audiences.