PQ Media: US Digital Out-of-Home Media Revenues Up 11% in 2015, Pacing for 9% Growth in 2016; Consumer DOOH Exposure Up 5% in 2016, Fastest Growth in 5 Years

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US digital out-of-home media revenues grew 11% to $2.7 billion in 2015, and are pacing for 9% growth in 2016, according to new PQ Media research. Consumer DOOH exposure grew 4% in 2015, and is pacing for 5% growth this year.

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Our research shows that DOOH is the second-fastest growing ad-supported medium in terms of consumer exposure and ranks third among ad media in operator revenue growth.

US digital out-of-home (DOOH) media revenues grew 11% to $2.71 billion in 2015, the fastest growth rate in five years, while consumer exposure to DOOH increased 4% to 54 minutes per week, according to new research from PQ Media. Based on first-half pacing this year, US DOOH advertising revenues are projected to rise another 8.7% in 2016, while consumer DOOH exposure is expected to grow at an accelerated 5.3%, the fastest growth rate since 2011, according to PQ Media's US Digital Out-of-Home Media Forecast 2016.

PQ Media defines DOOH by two broad media platforms – digital place-based networks (DPNs) and digital billboards & signage (DBBs) – and further segments the platforms by nine venue and location verticals and multiple sub-verticals, such as cinema, roadside, retail, transit, healthcare and entertainment, among others.

Overall DOOH ad revenues grew at an accelerated rate in 2015 just one year after recording the second-slowest expansion (3.1%) since PQ Media began tracking DOOH in 2000. Key DPN verticals posted declines in 2014, including the largest, cinema, and retail. But the DPN segment bounced back in 2015, as revenues surged 13.8% to $1.82 billion, the first double-digit increase since 2010, due to the absence of major political and sporting events siphoning ad dollars, the stabilization of management teams at leading DPNs, and gradual integration of mobile technology.

Fueled by the largest DPN operator, National CineMedia, in-theater advertising rebounded sharply in 2015 from declines in three of the four prior years, while the corporate & healthcare vertical posted its strongest growth ever, and transit DPNs notched their fifth consecutive year of double-digit expansion. Point-of-care DPNs powered the rapid expansion of the corporate & healthcare segment, which boasted the highest growth of all DPN verticals in 2015, as doctors leveraged digital and video tools to educate patients about the Affordable Care Act and offered advertisers hyper-targeting via mobile channels, such as providing patients with i-Pads to search for disease-specific information.

DBB revenue growth also accelerated in 2015, rising 5.6% to $894 million, following the slowest growth on record in 2014, according to the US Digital Out-of-Home Media Forecast 2016. The two largest DBB operators – Lamar Advertising and Clear Channel Outdoor – reported challenging, but improved market conditions, as Lamar rebounded in low single digits in 2015, while Clear Channel’s results were impacted by the court-ordered closure of 77 DBBs in Los Angeles. Outfront Media was the primary growth driver among the market leaders, executing on its ambitious plan to double its digital signage footprint.

Portending more growth ahead, consumer DOOH exposure increased for the fifth consecutive year in 2015, and is on pace in mid-2016 to grow at the fastest rate since 2011. Increased consumer DOOH exposure tends to presage growth spikes in ad revenues. Key drivers include more consumer viewing of content related to the Brazil Summer Olympics and coverage of the fierce US presidential campaign across DPNs and DBBs via new content partnerships, such as CNN Airport’s ratings spike during the political conventions. Cinema exposure also grew in 2015, driven by a strong roster of blockbuster films, including Star Wars: The Force Awakens.

“While legacy challenges continue to shadow DOOH, such as criticism regarding DPN's lack of a solid ROI metric, the positive indicators outweigh the negatives in the long view. Our research shows that DOOH is the second-fastest growing ad-supported medium in terms of consumer exposure time, and it ranks third among ad media regarding operator revenue growth,” said PQ Media CEO Patrick Quinn. “Only mobile ranks ahead of DOOH in consumer engagement. Ironically, we expect better integration of mobile and social media, as well as more programmatic buying and mobile beacons to be key growth drivers going forward.”

Macro trends like consumers spending more time outside their homes and the gradual improvement of the US economy should help brands open their media mix models to include more DOOH during the next five years. Healthcare, transit and entertainment DPNs stand to gain the most from these trends. PQ Media expects DBBs to track more closely with even-year growth spikes in TV advertising in the forecast period, due to programmatic buying and day-parting, while DPN pacing indicates a converse trajectory of higher growth in odd years. PQ Media projects total US DOOH revenues to grow at a compound annual rate of 9.3% in the 2016-20 period.

About the Forecast:

The US Digital Out-of-Home Media Forecast 2016 is the 9th installment in the DOOH industry’s performance benchmark since 2007. Due to demand from industry stakeholders, the new edition is focused solely on the US, the world’s largest market, delivering exclusive data on DPN and DBB operator revenues; consumer DOOH exposure time; key growth drivers & challenges; an exclusive index of over 500 DOOH operators; and proprietary rankings of the top DOOH companies, covering nine key venue and location categories. Download a free executive summary and table of contents at: http://pqmedia.com/usdoohmf-2016.html.

In September, PQ Media will release the first-ever Global Out-of-Home Media Forecast 2016, the only comprehensive source to examine the entire traditional and digital OOH media industry worldwide, with drill-down analyses of the Top 20 Global OOH markets.

About PQ Media:

PQ Media is a leading provider of actionable market intelligence and strategic guidance to executive teams at the world's premiere media and technology organizations. Our research team analyzes the size and growth of over 100 digital & traditional media channels, focusing on operator revenues, consumer media usage, and consumer spending on media content & technology.

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