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Bright digital OOH future ahead

News, 16 October 2015

NEW YORK: Digital will account for more than half of all out-of-home (OOH) spending in the US within three years, according to figures from eMarketer.

The research firm said that digital out-of-home (DOOH) advertising would see double-digit growth over the next few years and would be one of the fastest-growing paid media channels, behind only total digital and mobile.

In 2015, advertisers are forecast to spend $2.96bn on DOOH, with annual growth rates exceeding 11% pushing that total to $4.08bn in 2018.

By that year DOOH will account for 53.0% of all OOH spending, up from the current figure of 40.8%.

The following year, 2019, will see growth slow to 9.6%, while spending will reach $4.47bn and make up 57.5% of all OOH expenditure.

"Digital screens outside the home carrying paid media are proliferating, from large digital billboards along highways to interactive touchscreens in restaurants, bars, malls, airports, taxi cabs and many other locations," said Bryan Yeager, an eMarketer analyst.

"Advertisers will direct spending into DOOH media as more inventory comes online, buying becomes more flexible, automated targeting and measurement capabilities improve, and OOH media firms increasingly push advertisers toward their digital offerings," he added.

But even as DOOH is growing, eMarketer noted that the share of total ad spending taken by OOH generally was set to decrease slightly, from today's figure of 3.9% to 3.4% by 2019.

"Digital growth won't be enough to increase OOH media's share of total paid media spending in the US, because eMarketer assumes that funding for DOOH will primarily come from existing traditional OOH budgets that won't be replaced," Yeager explained.

"Remaining OOH dollars will be gradually moved to a mix of other digital channels," he continued.

"That said, new entrants and initiatives like LinkNYC, which will create thousands of new interactive OOH screens in New York City over the next several years, could move the needle more."

Warc's latest International Ad Forecast expects US OOH spend to amount to some $6.6bn this year, up 2.8% from 2014. This will give OOH a 4.0% share of all US adspend this year.

Data sourced from eMarketer; additional content by Warc staff