Global DooH Forecast 2009-2014 at Amsterdam

OVAB Europe presents the upcoming ISE DooH Business Conference 1-2 February 2010. Patrick Quinn, Founder of PQ media will present at the conference details about the global DooH market forecast 2009-2014. Following a short interview with Patrick Quinn a week before the conference. (Florian Rotberg)

Patrick Quinn

Patrick Quinn about the Digital Signage and DOOH Industry.

Patrick Quinn, can you give us a brief overview about the PQ Media services and your references in media research?

PQ Media is the leading provider of global media econometrics covering all 20 media and communications segments and more than 100 sub-segments, and pioneer of alternative media. Our experienced management team and analysts are mapping the next frontier of media. PQ Media has helped top executives at leading media companies, financial institutions, agencies, brands and management consulting firms by providing accurate forecast models for media spending and usage, predicting key trends and pinpointing opportunities for growth. Through our custom research, syndicated reports and proprietary methodology, PQ Media provides clients with unbiased insights and actionable strategic intelligence they can’t find anyplace else.

Recently your company published the Global Digital Out-of-Home Media Forecast 2009-2014, when did your company start its research activities in the Digital out of Home sector and what was the reason for this?

This is our third edition on the digital out-of-home industry, publishing our first edition in 2007 when we found there was a dearth of information on this dynamic alternative media.

What significance does have Digital Out-of-Home in the media landscape?

Although it is one of the smallest advertising markets, it is among the fastest growing because people are spending more time outside the home and using ad-skipping technology, resulting in traditional media losing eyeballs, listeners and readers.

A lot of people from the Digital Out-of-Home industry argue that media budgets shift from traditional media to Digital Out-of-Home – is this whish full thinking or reality?

A little of both. Brands are definitely seeking to shift dollars out of traditional media to alternative media that provide higher engagement, such as digital out-of-home media. However, the DOOH industry still has a number of challenges to overcome, such as larger scale and better metrics before all brands and agencies shift additional spending to this emerging media.

In your report you claim that the DOOH industry is in the “shakeout phase” can you explain this to our reader in Germany?

Our research on emerging media consistently shows three phases – gold rush, shakeout, and breakout. For example, in the 1990s there was a gold rush mentality where internet sites popped up everywhere with no concrete business plan to support mounting capital expenditures. During the 2001 recession, there was the shakeout phase in which many internet companies merged or went out of business when the ad market collapsed. As the economy rebounded, a breakout period emerged where the stronger internet companies which survived were able to expand significantly as search and broadband access pushed up usage and the ad market. We see similarities in the DOOH market, in which there was a gold rush period during the early 2000s, when providers and investors thought they could put up digital signage and screens anywhere and advertisers would follow. However, during the 2008-2009 recession as the ad economy faltered badly again, those digital signage and video ad networks that hadn’t been able to prove high usage and/or engagement began to merge or go out of business. For instances, in the United States alone we identified some 40 DOOH providers that were acquired or closed during an 18 month period. We, do however expect a breakout period to follow as advertising rebounds and providers begin to successfully meet many of the challenges facing the industry, such as offering scale, better metrics, and other marketing strategies.

Can you give us a brief comparison between the European the US and the Asian DOOH market?

The US market is probably among the more developed countries, particularly given a less stringent regulatory environment in the digital billboard space and the emergence of major video ad networks, such as National CineMedia, PRN and Captivate. DOOH in Europe has seen more inroads in Western Europe than elsewhere, other than Israel, due to the presence of large global out-of-home media companies, such as Clear Channel, JCDecaux and CBS Outdoor, that are first rolling out DOOH platforms here, such as digital screens in underground commuter systems, but have been hampered by the weak overall advertising markets of the past few years. Meanwhile, the Japanese and Chinese markets are driven growth in the A/PAC regions primarily as a result of the leading electronics manufacturers in this region, such as Sony and Hitachi, who have been very creative in the deployment of screens in places like vending machines and water coolers.

Are there specific trends or drivers which influence the Digital Out-of-Home industry most? And if so do they differ in the different markets (US vs Europe) or are they the same?

That’s not an easy answer, in all honesty, because each country has its own dynamics. There are some common trends such as the need to provide strong metrics, content, and scale, but the acceptance of DOOH in each country differs dependent upon current consumer behaviors, the health of the overall out-of-home industry, and the sophistication of the media infrastructure and how usage is or is not being measured by traditional media in the competitive landscape.

The Digital Out-of-Home industry needs VC to grow and a lot of DOOH companies are in their second financing round at the moment. What information do venture capitalists get from your report and can you reveal some figures to our reader?

We provide a template as to the top trends going forward, some of which have been referenced in the previous questions. Companies that can meet a majority of those trends provide the strongest investment opportunities, such as proven ROI and venue exclusivity. While the overall DOOH industry exhibited decelerating growth in 2009, growing only 4.7% compared with an 8.7% gain in 2008, and double-digit increases from 2004 to 2007, it was one of the few global media to post a positive growth during the year.

People are always curious about rankings. Could you identify a global market leader in the DOOH industry?

Media company executives share their performance data with PQ Media on a confidential basis. We are therefore unable to make company rankings available. I’m sure your readers will understand.

Mr. Quinn can you give us your personal opinion about the future of DOOH industry?

As stated earlier, I believe the DOOH industry is poised for a breakout period once the ad economy rebounds. With the merger of a number of companies, better metrics being developed, as well as other criteria being met, we believe the industry will remain one of the fastest growing global media segments going forward due to brand marketers who need to reach the mobile consumer and business person more efficiently.

Anyone interested in the Global Digital Out-of-Home Media Forecast 2009-2014 should participate at the ISE DooH Business Conference presented by OVAB Europe from 1-2 February 2010. More information and registration details at http://invidis.mittelstandswiki.de/dooh-konferenz-ise-2010/