New and now: How the OOH market is shaping up for 2019
Industry insiders weigh in on how acquisitions affect pricing structures and what challenges lie ahead.
"It never shuts off. It's always viewable," says Debbie Drutz, VP of sales at Bell Media' Astral.
At once, OOH seems to be both an old reliable, predictable medium, as well as one of constant change.
Riina Clydesdale, VP of client services at Novus, says the agency is not only seeing increased revenue from OOH, but an increasing desire from clients to innovate in the medium. "There's a feeling of excitement going on," she says. As old static spots come down, Clydesdale says the shift into great digital locations is fueling an industry desire to be more creative.
The biggest acquisitions and new faces
Over the last several years, some of the biggest OOH vendors have scooped up smaller companies (or in some cases, highly prominent players) in a land-grab of the outdoor advertising scene.
Last year, U.S. OOH network Branded Cities acquired Clear Channel Outdoor Canada, adding just under 3,000 faces to its network. Branded Cities has also acquired the sales rights to Signpatico's digital assets in Western Canada.
Astral has beefed up its network, acquiring Cieslok Media in 2017. Other acquisitions by Astral in past years include Cogeco's former OOH arm, Métromedia in Montreal and MacDonald Outdoor in Western Canada.
Pattison has worked on expanding its presence in the place-based category, launching thousands of new office faces and acquiring the ad rights to Toronto's Union Station in 2014.
Clydesdale says acquisitions present a mixed bag in terms of how they affect pricing, sometimes causing rates to rise slightly, depending on how niche the acquisitions are considered. "Sometimes when smaller companies are brought into larger companies, their view of what a premium product is can also change. What was part of the inventory for a transit-only company becomes a premium when it's wrapped into a larger company."
By the numbers
Reports say that OOH's share of Canada's ad spend will remain small – 5.4%, according to Dentsu Aegis – but steady.
Dentsu's biannual ad forecast, released this past June, shows OOH's spend share hovering around 5.6% for the next two years. The forecast actually shows investment increasing – it grew by 6% this year, and is expected to grow another 6% for the next two years, outpacing Canada's ad market as a whole.
Forecasts by eMarketer show a similar trajectory. As of 2018, the Canadian OOH market sits at an estimated $640 million in investment. It's expected to rise by around $10 million per year until 2022.
It's no surprise that digital accounts for an increasing cut of the OOH media investment. According to a different study by Warc, Canadian total OOH investment in Canada is expected to rise 10% to CA$808 million this year – 15.1% (CA$122 million) of which will be digital.
Warc attributes the popularity of OOH to its CPMs, which are relatively low compared to other media (although digital buys do boast higher CPMs).
Globally, OOH sees an average of US$6.41 per thousand impressions, according to Warc (the average across all media is $12.20). In Canada, the cost per impression of the average billboard is rising at about 2% year-over-year, according to the same data from Warc.
The new opportunities
With digital on the rise, OOH is seeing a lot of action in programmatic buying, bringing it closer to the fast-transacting world of online advertising.
Edith Gagné, VP of development for OOH exchange Campsite, sayes her company has seen growth in clients and vendor partners (it's now working with 15, including a recent partnership with Astral that saw it enter the large-format outdoor market). "Media owners are more ready to connect their inventory and transact programmatically based on audiences."
Gagné says the OOH market is already efficient, but programmatic options are driving it more so. "There's a lot more mobile data to target audiences with."
Drutz also credits increased access to geotargeting for OOH's renaissance. "We can better prove the attribution and ROI of the medium," she says.
She adds that DOOH transactions tend to be easier, given the lack of requirements for production and the speed at which a campaign goes from buy to big screen. She says triggers such as dayparting, weather patterns and news feeds have enabled OOH to be just as "smart" as a digital ad.
Clydesdale says it's hard to imagine that even five years ago, things were vastly different. "Even digital boards just showed a static message on a loop. Creative was used occasionally perhaps with a weather trigger. Now we're at a point where automation is giving advertisers an opportunity to engage in an open exchange."
High-tech, time-triggered and automated plans have helped create eye-catching digital campaigns, like the CBC's execution with Branded Cities to advertise the series Caught. Set in the billboard-saturated Yonge-Dundas Square, series star Allan Hawco was seen leaping from billboard to billboard trying to evade those in hot pursuit.
Clydesdale says there's still untapped potential in static billboards – like the McDonald's "Follow the Arches" campaign, which swept the international awards scene from Epica to Cannes. While Clydesdale gave most of the credit to creative agency Cossette, she says Novus put a lot of planning work into it. "It didn't look like a lot of work, but the vetting was intense. It shows that innovation is only limited to the imagination."
Gagné says sensors, cameras and detection technology are also helping drive more unique messaging capabilities.
The Responsible Gambling Council used cameras and detection software to create a dynamic, place-based ad that only spoke to people who were alone. "We're only at the beginning of that. The next step is to help it seamlessly mesh with an omnichannel strategy."
Where challenges lie ahead
Some reports still show downward trends when it comes to OOH.
Zenith's most recent media consumption report shows the average Canadian is consuming less of all non-internet-based media. Currently, people consume an average of 76.1 minutes of outdoor media per day, down from 81 minutes in 2011 and predicted to hit 75.8 minutes per day in 2020.
Gagné foresees yield management as another growing pain for OOH. "Networks and software can be very costly. Upgrading your network to have the biggest screen can be costly. It has to be balanced out with what buyers are willing to pay." She did, however, say that tech is becoming more affordable.
For Drutz, production costs and inventory are a challenge.
Despite digital raking in more and more ad spend, the reality is, 85% of OOH inventory is in static form, according to Drutz. Production costs are naturally higher for these types of faces, and campaigns take longer, posing challenges in a more on-demand marketplace. "We need to be [more] flexible, timely and available to our customers." She adds, "Finding new locations to enhance the footprint to coincide with market demands requires many resources and [more] time."
Clydesdale agrees that inventory is finite, especially in the digital space. She notes that digital hold policies can often frustrate clients. "Clients are always asking, 'how do we get [vendors] to hold our inventory?' The space is gone by the time they get approvals."
But, she says, there needs to be more creativity when considering placements – and to not solely rely on digital. "Out-of-home is more than just the billboards, the big digital placements. If everything is sold out in the core, look at wrapping a transit vehicle – maybe some lobby signage, a door, something in Union Station. Although supply and demand certainly affects the medium, if something is sold out, we can always look for something new."
She points out that even smaller towns and rural areas have options for strong executions. "If you're looking to activate in a tiny town outside of London [Ontario] and all they have is an arena, that's still an arena you can advertise in, a Zamboni you can wrap."