Why it’s a Good Time to Invest in the OOH Market

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Google remains synonymous with marketing in the digital age, and it’s interesting to note that the search engine giants recently celebrated their 20th anniversary.

While the exponential growth of Google has driven a preoccupation with digital and online marketing techniques, this has created a saturated space in which brands can find it hard to truly stand out. As a result, companies are increasingly inclined to invest in integrated marketing campaigns, which leverage out-of-home (OOH) media to build awareness and drive conversions online.

This has been borne out by the global OOH advertising spend, which is expected to peak at $38.06 billion by the end of 2020. This has altered the attention of the world’s leading media outlets and brands, who recognise that now is the ideal time to invest in OOH media and leverage its immense profitability.

We’ll address this below, while considering the benefits of investing in the OOH market in the current economic climate.


The Market Portents – How OOH Media is Gathering the Interest of Investors

Even taking into account the uncertainty and damage that may be caused by Brexit (particularly in its no-deal form), OOH media has continued to enjoy sustained gains during the last two years.

In fact, OOH marketing revenues increased by a relatively impressive 6% in 2017, with roadside and transport advertising leading this charge. Not only this, but the OOH ad spend in the UK increased incrementally by 1.4% during the same period, despite the fact that any future arrangement with the EU may not include services.

This relatively robust performance has certainly caught the eye of the market’s leading players, with Global Media offering a relevant case in point.

This British-based media corporation, which is also focused on radio advertising and brand events, has recently sought to expand its OOH presence with a number of huge acquisitions. This included the dual-purchase of the prominent Primesight brand and Outdoor Plus, which were acquired for a combined fee in the region of £220 million.


As if this was not enough, these deals were swiftly followed by the surprise purchase of fellow UK brand Exterion Media.

The initial speculation indicated that Exterion’s private-equity owner was keen on selling to Ocean Outdoor, with the two parties thought to be in advanced talks and on the verge of concluding a deal.

This was before Global swopped with a significant offer of between £450 million and £500 million, which was significantly higher than Ocean was willing to pay. Not only this, but Global’s vast cash resources enabled them to conclude a much quicker deal, with the negotiations lasting for less than a week overall.

Having spent up to £720 million on three of the UK’s market leading OOH brands, Global have clearly sought to move aggressively in order to capitalise on a true growth market. It’s also fair to surmise that they’re unduly concerned by Brexit, primarily because the flexible and cost-effective nature of channels such as billboards are likely to experience even greater demand as the economic climate becomes increasingly strained.

Global have also disrupted the marketplace considerably, becoming the second largest player in the OOH space in one fell swoop. In fact, while they may sit some way behind France’s JCDecaux in terms of global market share, it’s thought that they may now be the dominant force in the UK region.

After all, JCDecaux currently accounts for around 35% of the market in the UK, but Global may well have surpassed this with their recent acquisitions.

Overall, this significant disruption has created an even greater sense of competition in the OOH market both at home and abroad, while it may well be the catalyst for similar acquisitions and mergers either side of the UK’s departure from the EU.


Why Now is the Ideal Time to Invest in the OOH Market

The sheer number and value of these recent acquisitions certainly represents good news for the OOH market and the industry as a whole, but there are also other reasons for insiders to be cheerful regardless of the wider economic climate.

We’ll review these in further detail below, as we consider the most compelling arguments for investing in the OOH marketplace at the present time:


The Nature of the Recent Acquisitions Hints at the Health of the Market

Not all acquisitions are created equal, and while it’s important to consider the value of individual deals this also needs to be considered in the proper context.

While some acquisitions may see considerable amounts of cash and assets change hands, for example, this is not always indicative of a healthy or a progressive marketplace.

In some instances, large amounts of money can be spent on acquiring brands in a distressed state, which could suggest that the underlying market is declining or that smaller operators are struggling to thrive.

In the case of the recent transactions, however, we’ve seen three successful and profitable brands procured by a global market leader, highlighting the enduring strength of the industry and its ability to generate significant returns across the board.


OOH Works Well with Social Media and as a Driver of Assisted Conversions

Aside from the cost-effective nature of OOH, this medium is also extremely effective when used as part of an integrated marketing campaign.

As a result, brands can successfully leverage this medium to offer comprehensive and holistic marketing campaigns, which deliver a far greater ROI and superior value for money to clients.

At the heart of this is the ability of OOH media to drive a high volume of assisted conversions, which are defined by Google as the various brand interactions that take place during the typical customer journey. These can occur across both on and offline channels, while each is ascribed a specific monetary value based on its level of influence and the role that it plays in finally converting customers.

Make no mistake; outdoor advertising channels such as billboards are particularly adept at triggering valuable online and mobile interactions, especially through social media. According to research by Nielsen, OOH media recently surpassed television as the dominant trigger for engagement through social platforms like Instagram and Twitter, while also leaving radio and print trailing in its wake.

Overall, an estimated 24% of surveyed respondents interacted with a specific brand through Twitter after seeing an OOH ad, while the corresponding number for Instagram users was around 25%.

In contrast, just 22% of people interacted with brands after watching television advertisements, while it’s important to note that billboard marketing is around 80% cheaper than this medium.

This is an important consideration, particularly with social platforms becoming increasingly influential in the minds of consumers. Not only do the top brands on Instagram report a per-follower engagement rate that is 58 times higher than Facebook, for example, but an estimated 74% of shoppers now make buying decisions based on their social media interactions.

These trends will continue indefinitely into the future, helping to distinguish OOH media as a prominent and popular advertising medium with huge potential.


The Combination of Digital and Classic Billboards

We’ve already touched on the diversity of the OOH medium, which includes both traditional and digital channels.

No single advertising method embodies this better than billboards, which offer a myriad of options to companies both large and small.

Digital billboards certainly continue to dominate the OOH market, having established themselves as key drivers of a $33.5 billion growth industry. This niche is also poised to grow by around 16% this year, as clients continue to look for high-end marketing solutions that resonate in the minds of consumers.

Incredibly, this has not dampened the growth of traditional billboards, which offer a more cost-effective solution to advertisers and exceptional for money. Another key factor in favour of traditional billboards is the level of exposure that they offer to brands, who will not be forced to share advertising space on the same billboard.

In contrast, high-end digital billboards often showcase up to six adverts per 60-second period, restricting exposure and potentially casting less memorable ads in the shade.

There’s no doubt that each of these advertising methods have their own unique set of advantages, while they also combine to offer a broad range of pricing solutions to suit variable budgets.

This enables the OOH marketplace to benefit from a large and diverse audience of potential clients, creating a scenario where its profits grow regardless of how the overall economy is performing.


The Growth of Smaller Independent Networks

As well as inspiring large-scale acquisitions at the higher end of the market, the expansion of the OOH network has also inspired the growth of small, independent networks in local communities throughout the UK.

These service providers are able to thrive by offering targeted services to local advertisers, driving the growth of regional economies and generating considerable revenues in the process.

This is particularly true in the case of classic billboards, which are increasingly affordable and enable local firms to optimise their marketing spend even over the course of longer bookings.

As a result, these networks represent an outstanding investment opportunity for ambitious brands, particularly those that are looking to secure long-term gains. The time to act is now, however, as eventually these entities become swallowed into larger networks and overly preoccupied with growth.


The Last Word

Clearly, the recent growth of the OOH market cannot be denied, while a number of factors suggest that this will continue at pace into the future.

This means that now may well be the ideal time to invest this medium before brand values peak and the market reaches saturation point.

these represent an excellent investment opportunity before they either become swallowed into the bigger networks or become too focused on growth

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Book your billboard today.

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