Digital signage and out-of-home (OOH) video advertising sales expected to grow
The forecasts for digital signage hardware and out-of-home (OOH) video advertising sales recently issued by four independent research firms paint a bright picture for an industry that has emerged as the dynamic Fourth Screen in communications and advertising. Though a slowdown in world markets in 2009 may take some of the sizzle out of the burgeoning digital signage industry, sales growth is expected to resume at a steady pace to 2012, according to the studies.
Despite the slowdown in 2009, PQ Media, the pioneer in the area of alternative market analysis, forecasts a compound average growth rate of 14.5% for the 2007 to 2012 period. PQ Media names Russia, India, China, Brazil and Australia as key international growth markets. According to its forecast, the industry in these countries will benefit from such major trends as the emerging market potential for operators, greater brand acceptance, advanced technology and new measurement systems.
For the United States, which accounts for nearly 40% of global digital OOH spending, PQ Media says the industry is on pace to grow 11.2% to $2.4 billion in 2008, decelerating from 24.5% in 2007 but growing at a compound annual rate of 12.9% from 2007 to 2012. U.S. spending on video advertising networks, the largest segment of the OOH market, which also includes digital billboards and ambient ad platforms, are on track to expand 8.1% in 2008, but growth is expected to decelerate next year before returning to double-digit growth in 2010, according to PQ Media's forecast.
By comparison, digital billboards remain the fastest-growing segment, posting growth of 28.2% in 2008 and remaining in the 20% range through 2012, according to the company. Ambient ad platforms, or place-based media, will grow 6.8% in 2008. According to PQ Media forecasts, the current economic crisis and resulting advertising pullback will accelerate the transition already taking place in the media world, with DOOH emerging as a winner.
Goldmedia Gmbh and Screen Digest
In a separate study examining the fast-growing market for digital OOH media in Western Europe, Berlin-based research company Goldmedia Gmbh and its London-based research partner Screen Digest predict DOOH ad revenues will quadruple over the next five years from approximately $204 million in 2007 to $797 million by 2012. According to “Digital Signage in Europe: Opportunities for Digital Out-of-home Advertising”, the OOH sector will be the only traditional advertising media to post real revenue growth during the next five years. By 2012, DOOH share is expected to grow to approximately 10 percent of total OOH.
According to MultiMedia Intelligence, a US-based market research and consultancy, shipments of digital signage displays will exceed one million units this year, growing 34% to 1.1 million displays. By 2012, the market will consume nearly 2.3 million displays, according to its report “Network Digital Signage: Infrastructure, Displays, Software and Technology.”
MultiMedia Intelligence expects global economic weakness to sap growth in 2009, followed by a strong return to double-digit growth in 2010. Driven by preparations for the 2008 Olympics, China overtook the United States as the top digital signage consumer, according to the company's research. The company also identifies retail, transportation, and restaurants and bars as the top three digital signage verticals, while also citing the impressive gains of education and corporate communications.
ABI Research, in its “Digital Signage Market Analysis”, expects the overall market for digital signage software, hardware, installation and management services in the United States to grow from $641 million in 2008 to nearly $1.4 billion by 2013. Though the firm expects the economic slowdown in the United States and other markets to impact retailer and advertiser spending on new initiatives over the next 12 to 14 months, it sees opportunity in the uniqueness of this new advertising vehicle.
The Fourth Annual DOOH Investor Conference
As if to stress the validity of the above facts, the 4th Annual DOOH Investor Conference was announced for October 2009 in New York. The program includes master-classes in all key issues of digital advertising, financial market analysis, risk assessment and investment opportunities in the industry. Though 2009 is a year of critical slowdown across all industries in the world, the forecasts remain highly optimistic. This is seen as an excellent time for investors and entrepreneurs working in the area of DOOH to meet and discuss opportunities that will abound soon after the financial crisis comes to an end.