Out of Home industry set for a shake up

While Covid hit the Out of Home (OOH) industry hard, the sector has bounced back exceptionally well and is in its fifth consecutive quarter of growth. StopPress speaks with Natasha O’Connor, General Manager at the Out of Home Media Association Aotearoa about this remarkable recovery and what’s trending in this space in the near future. 

Looking to the future, there are two changes on the horizon set to make big waves in the OOH world. These are the introduction of Verification Standards in New Zealand and the universal audience measurement system that will be coming into play via Calibre.

“This is huge news,” O’Connor says. “The [verification]standard and Calibre are the two things that this industry is bringing to market this year. Both will be game changers in their own way.”

She adds that when other international markets have brought in an audience measurement system, and once a large majority of the market is on board, revenue for OOH goes up substantially.

“Australia bought its MOVE (Measurement of Outdoor Visibility and Exposure – a quantitative audience measurement currency for Out of Home) in 2009 and from then on, [the industry]just boomed as far as revenue goes. Although that did coincide with [the introduction of]digital, so we don’t know if that is entirely attributed to the audience measurement system.”

The New Zealand OOH industry has been asking for something like this for around 10 years, so being finally able to deliver it via Calibre is “really exciting” she says.

So far, oOh!media and MediaWorks are shareholders and by the time they have onboarded, 85 percent of New Zealand’s OOH formats will be represented and sitting in Calibre.

This means agencies will be able to get one true reach and frequency number.

“Regardless of what format they use, they can put it in Calibre and it will tell them what their entire campaigns reach and frequency abilities are,” O’Connor says.

This is exciting for the industry because in the past, every OOH operator had its own reach and frequency model and the agencies all had different methodologies.

“You couldn’t really add all the numbers together because you’d be comparing apples with elephants.”

As for the unified standard, the OOHMAA has established a dedicated steering committee of members, vendors and agency Partners, who will analyse the final standard to determine its transferability to the New Zealand market. It is hoped that this will be ready for New Zealand’s market in early Q4 2022.

“The unified approach will mean it’s a platform where everyone understands what the outcome is. It is easier to compare results and it will make sure that when you’re talking about a common ratio, such as agreeing on a definition of share of voice versus share of time and which one is more relevant, it is standardising that,” O’Connor says.

According to results released by OOHMAA the second quarter of 2022 is growing by four percent and contributing to H1 delivering an increase of three percent in revenue for the same period in 2021; $ 60.6 million, up from $ 58.7 million.

Digital revenue also grew by three percent for the same period in 2021, accounting for $ 40.4 million, with its share of total revenue for H1 2022 holding at 67 percent, the same share percentage as H1 2021. 

While these encouraging revenue results for OOH industry reflects the faith agencies and advertisers have in this channel, there is still capacity for continued growth says O’Connor.

“Our audience numbers have recovered to pre-Covid levels across most formats; there’s the ongoing development and implementation of pDOOH, the ongoing focus and dedication of OOHMAA members JCDecaux, oOh!media, and MediaWorks for delivering a universal audience measurement system to enhance further the value our industry offers advertisers, and all these tailwinds look set to ensure OOH builds on its H1 success in H2.”

With 67 percent of OOH’s revenue coming from digital OOH, O’Connor says this shows that New Zealand has really embraced this technology and its capabilities.

“Year on year as an industry, we are up three percent which may not sound like much, but it is substantial. We are only five percent off 2019 year to date. That’s incredibly encouraging. We had a good year last year as well.”

While programmatic is also set to contribute to the industry’s growth, O’Connor says it mustn’t be seen as a “silver bullet”.

“In New Zealand, and globally, the uptake of programmatic OOH is still in single digits as a percentage of revenue. We know it is going to be growing because it offers greater flexibility around budgets, timings, and real time optimisation and that is going to appeal to clients to engage with OOH where they haven’t before.”

Anecdotally she is hearing from OOHMAA members that those embracing programmatic offerings are new to OOH.

“So, it’s not sabotaging what we have already got, it’s building on it which is fantastic.

“[Programmatic] will deliver a really nice layer to amplify advertisers’ OOH strategy. But we are also very aware that with programmatic we need to build on really solid foundations.

“There is going to be a lot of education needed and upskilling for the agencies and for our sites, as well as testing the various programmes available and developing a set of standards.”

OOHMAA has also been working on establishing the effectiveness of OOH with ‘An examination of New Zealand’s Media Performance and Out of Home’s role.’ This study is the first step in the associations journey to illustrate OOH’s effectiveness and necessity as a channel.

As 2022 progresses the association will continue to support the industry through these changes as well as capturing more formats and user education, while focusing on delivering the Verification Standard.

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