[OOH Focus] Global OOH trends

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PwC's latest Entertainment and Media Outlook: 2015 - 2019 (South Africa - Nigeria-Kenya) predicts that the out-of-home industry revenue will continue to grow steadily, particularly due to rapid urbanisation and the new OOH advertising space being created by improvements in infrastructure in South Africa.

Trends from PwC

• South Africa's OOH advertising market will grow steadily over the next five years at a CAGR of 3.5%. It will reach an estimated total value of R5.1bn by 2019. Of this amount, DOOH will generate approximately R1.7bn. With 33.1% DOOH revenue, South Africa will be the most digitised market in the region and in the top 30 worldwide.

• The global market-leading provider, JCDecaux, has decided to invest in South Africa. The company's purchase of Continental Outdoor Media demonstrates the potential of the market.

• Interactivity of DOOH will come to the fore. DOOH advertisements will become increasingly interactive to engage with consumers, as South Africa's smartphone connections double to 52.3 million by 2019. This growth, together with that of DOOH advertising, will offer opportunities to interact with these devices, increasingly including technologies such as near-field communications (NFC) and ad beacons, allowing advertisements to act as points-of-sale.

• Nigeria's market will rise at a 7.2% CAGR. The country's economic growth and rapid urbanisation are proving beneficial to the OOH sector, with billboards being by far the most popular format.

• Kenya's total OOH revenue will near US$150m. Kenya's OOH market will rise at a 7.7% CAGR, from US$101m in 2014 to US$146m in 2019. Transport locations and shopping malls are leading the way for the country's nascent DOOH sector.

• Challenges remain for the OOH sector. Poor measurement and reporting systems hamper the OOH market, although new tools and digitisation will help to negate this weakness. Stricter regulation will also continue to be a challenge, with the proposed ban on alcohol advertising expected to have a significant effect on revenue, if implemented. With respect to DOOH, electricity supply, slow internet connections and large initiation costs pose significant barriers to obtaining the full potential which the medium can deliver.

Additional local trends

The biggest trend in 2016 that we will see in the out-of-home (OOH) sector is digital - whether local or international. Every single media company and stakeholder surveyed in the industry agrees on this.

Apart from this, these are the additional trends that will present in the South African OOH industry, according to local industry media owners and stakeholders:

1. Digital creative. The biggest trend is digital, and it's a trend that's going to be here for some time. Digital will really take off when media owners learn how to use the LED screens effectively because just putting on a TVC on an LED screen completely contradicts the true power of the LED screen.

2. Interactive. To engage with the hyper-connected consumer, OOH must be interactive. A major trend would be creating ways to help nurture two-way interaction. Adding an element of consumer experience of interactivity to OOH causes tremendous positivity around the brand, driving both conversion and retention of customers. OOH must be interactive, addressable and quantifiable for clients and transform routine journeys into amazing experiences for consumers.

3. Consolidation of the OOH industry. There will be fewer, but larger and more professional, OOH media companies. This is and will continue to be driven by market demand, consolidation of media buying (global agencies), landlords consolidating the number of media owners marketing their portfolios and the entering of global OOH media companies into Africa. This consolidation will mean fewer larger and more sophisticated companies that will drive innovation and increase quality. This will again drive growth in the OOH industry.

4. Interplay between platforms. Innovation and opportunities between OOH, mobile and social media platforms should become common place. There is innovation in this space (sending tweets to a digital billboard, for example) but media owners must embrace all platforms and their "synergistic properties", entertaining consumers wherever they are. The most basic of advertising campaigns that combine OOH and search or SMS have achieved "amazing" results. Technology such as beacons exist to create a link with commuters and their smartphones if Bluetooth is enabled.

5. Disruption. While OOH is able to reach an ever-increasing number of consumers through OOH, especially through shopping centres and nodes, the market is also demanding more creative and disruptive ways of reaching and engaging with their audiences. The convergence of e-commerce and service-related systems means that a static hoarding in a mall could easily be converted into a digital shop front or service centre. For example, expanding a retailer's opportunity to engage shoppers in an interesting and innovative way. Pop-up shops and disruptive brand experiences are another novel way of extending OOH, surprising and delighting consumers, keeping them engaged with the brand.

6. Infrastructure development. The development and investment in leisure and transport related infrastructure will increasingly change consumer behaviour. Consumers will spend more time using BRT bus systems and the Gautrain, for example. They will also increasingly frequent malls, which we have seen rolling out at a blistering pace. OOH media have been and will be reaching these consumers when they are effectively out of reach from TV and radio mediums.

7. Time spent out of home. As economies grow and mature, so people become more mobile and spend more time out of their homes with greater access to places that stimulate commerce. The number of people and the time spent commuting also increases, as does the number of people travelling for leisure. Increased shopping hours have also driven a growing number of people into the malls. Couple this with a growing number of mobile platforms, and there is a greater opportunity for retailers to reach consumers close to the moment of decision making and point of purchase.

8. Creativity. While digital OOH (DOOH) has huge potential to drive immediate impact and scale close to point of purchase, it can also garner award-winning praise (even the Cannes Direct Grand Prix). Creativity is important in OOH, and more and more brands are realising that it is not good enough to slap a print ad or TVC still on a billboard. The danger with DOOH is that TVCs will be put onto these screens. What also plays a role in OOH is the location and how creatively billboards and screens are located and if the site is an iconic one.