OOH Bounce Back: 2020 Predictions

Almost every industry is being affected by COVID-19, and OOH is no exception. To take China as an example, OOH spend in January was down 90% during full lockdown, recovering to 40% and then 70% in the two successive months - with normal capacity soon expected.

With clients in key industries such as Automotive, Travel, Retail & Leisure feeling the pinch for the next few quarters, it will be even more important than ever for OOH players to optimize campaigns & understand the “real-world” behaviour and mobility of consumers - moving away from just using digital metrics to look at new data streams such as human mobility, vehicular traffic, social media & financial insights to gauge economic recovery.

We recently hosted a webinar to discuss these topics and more with Carlos Viladevall, Founder and CEO of Halley Intelligence, and former CEO of both Posterscope Spain and CARAT Spain. We have summarized some of the discussion below.

How have the last few weeks been? What have your colleagues been sharing about the situation and the impact on the OOH market?

The OOH sector cannot remain insulated from this crisis, OOH is especially affected because it affects mobility and OOH is in public spaces. Stay at home advisory proves to be a major challenge for the sector. We all agree lockdown is essential. OOH as well as with other media what we have experienced so far is that campaigns are paused mainly and not discontinued. There have obviously been cancellations but as there are no consumers to target, many brands are deferring campaign spend instead of cancelling. If the situation continues there will be a serious material effect on our business. The positive side is the opportunity to demo the power of OOH and its immediacy as well as its contextual and flexible capacity to get relevant messages out very quickly. Today we have tools that allow us to understand real-time mobility patterns so we can be very efficient. There is no question that the current situation and work from home experience has brought opportunities to develop future strategies to handle these types of events, and has accelerated our digitalzation process.

How have the challenges been different for agencies vs estate owners vs media sellers?

This situation requires pragmatism across the supply chain as everyone wants to make sure there is a viable business after the pandemic. Consumer mobility has fallen big time, between 30 to 70% and as much as 90% in some areas. The seriousness of the effect on these groups will depend on many aspects including how diversified they are and the level of cash reserves. Today all are considering various options to use expenses; capping capital expenditure, reducing employee hours, implementing voluntary salary reductions, introducing temporary unemployment measures, and approaching landlords and suppliers with cash conservation measures.

Everyone is holding on for the market to recover and have responded with more flexible terms. Landlords, media owners and agencies. The whole industry is pulling together in most places. All of us are suffering what is happening and it depends on each of us and how diversified we are in our reaction.

Consumer mobility has fallen big time, between 30 to 70% and as much as 90% in some areas

What trends were you expecting in 2020 before this crisis began?

In 2019 OOH reached $40 billion worldwide. Before COVID-19 this figure was forecast to increase to over $43 billion by the end of 2022 with a compounded annual growth rate of 2.4%. Other sources were more optimistic and forecast growth in 2024 of between $54 and $59 billion equating to a compounded annual growth rate of 5.1%. In any case growth was expected. Looking at Digital OOH specifically, compounded annual growth rate was expected to between 9 and 11% depending on source over the same period of time. In summary OOH was in good health.

Post COVID-19, it is uncertain. Some sources say that as a whole industry, we will see a 6% drop in overall spend compared to last financial year. Others say 20% is more accurate with some people forecasting as far as 50% with what was expected for this year. The most common figure is between 15 and 30%.

Some sources say that as a whole industry, we will see a 6% drop in overall spend compared to last financial year. Others said 20% is more accurate with some people forecasting as far as 50% with what was expected for this year. The most common figure is between 15 and 30%.

What learnings did you take from previous advertising recessions?

This is a difficult and unprecedented time, and we cannot compare with the previous recession. The current situation affects mobility, with the stay at home advisory being a major challenge for the sector.

Short term, mobility will still be affected since social distancing will still be a requirement. Many companies will retain 50% work from home policy so it will be a slow process in terms of mobility. It might make sense to use real-time data to reflect more accurate mobility figures to convince brands of the strength of OOH since figures using now are not valid.

How are OOH firms collaborating with governments or charities through the crisis?

We’ve seen numerous initiatives running to support key workers, local heroes, and services on the front line. OOH has been used for work from home and stay at home communications. OOH has been broadcasting public safety messages all over the place. This is a once in a lifetime chance, and it is our utmost duty to be responsible as an industry. In the beginning the initiatives were separated but now we are starting to see joint initiatives, which make the results much stronger and say a lot about the OOH industry.

This is a once in a lifetime chance, and it is our utmost duty to be responsible as an industry.

Have you seen very big differences across different territories? Do you think certain countries will recover faster?

As we all know COVID-19 is affecting all parts of the world at varying levels. Europe and the US are at a critical stage, while China is returning to normal working practices. It is certain that large scale quarantine, restrictions and social distancing mean a sharp fall in business spending and consumer behaviour. Every country is handling the pandemic a bit differently. While China took 3 months to start recovering, India for example may take a minimum of 4 months and it will vary country by country. We’ve seen Spain closing down a month and half ago and will not open doors for another two weeks. Germany has a very different policy, and seems to be getting better results. People want to be outside and brands will need to reconnect with their audiences. We will see a demand for OOH in all markets at one point or another. The last thing people will want is to stay inside and watch more TV.

GeOOHub: OOH Media Owners Location Intelligence Solution

GeOOhub is a platform that captures, measures and analyzes geospatial behaviours to help OOH Media Owners in three key areas:

• Audience Mapping
• Smarter Inventory Management
• Synchronizing OOH & Mobile

During the webinar a brief demo of the solution was shown and can be viewed below.