European digital out-of-home (DOOH) operator revenue increased at an accelerated 13.4% in 2010 to $1.68 billion and is expected to rise at a compound annual growth rate (CAGR) of 15.9% in the 2010-2015 period, according to exclusive data presented to Screenmedia Expo attendees yesterday by PQ Media (http://www.pqmedia.com). Key growth drivers over the next five years will be new technology, better metrics and changing consumer behaviors, said Dr. Leo Kivijarv, PQ Media’s vice president of research, citing data recently published in the 4th edition of the renowned PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.
European digital out-of-home (DOOH) operator revenue increased at an accelerated 13.4% in 2010 to $1.68 billion and is expected to rise at a compound annual growth rate (CAGR) of 15.9% in the 2010-2015 period, according to exclusive data presented to Screenmedia Expo attendees yesterday by PQ Media (http://www.pqmedia.com). Key growth drivers over the next five years will be new technology, better metrics and changing consumer behaviors, said Dr. Leo Kivijarv, PQ Media’s vice president of research, citing data recently published in the 4th edition of the renowned PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.
The latest edition of PQ Media’s global DOOH industry benchmark includes actual full-year 2010 data, five-year forecasts and five-year histories of revenue, growth, and key trends and drivers by DOOH platforms, venue categories, all four major global regions – Europe, the Middle East & Africa, the Americas, and Asia/Pacific – as well as the 16 leading markets within these regions. The industry’s definitive econometric resource also includes a wealth of other actionable strategic intelligence for industry stakeholders. PQ Media defines the global DOOH industry by two major platforms – digital place-based networks (DPNs) and digital billboards & signage (DBBs) – as well as six venue and location categories, including cinema, retail, office, entertainment, transit, and roadside.
Europe, the third-largest of the four global regions, includes the U.K., Russia, France, Germany, Italy, Spain, and a combination of the remaining – and relatively small – markets grouped under the “Rest of Europe” moniker. The accelerating growth of European DOOH operator revenues in 2010 was fueled primarily by emerging Eastern European markets, particularly Russia. Growth in Eastern Europe offset weaker gains in the more developed Western European countries, Dr. Kivijarv told a packed auditorium in London. While the overall European region grew at only a 7.2% CAGR in the 2005-2010 period, this was due mainly to a soft cinema venue category in Western Europe, in addition to a double-digit decline in Eastern European DOOH revenues in 2009. But in 2010 DOOH made a strong comeback, as DPN revenues grew 10.2% to $1.4 billion and DBB revenues soared 32.8% to $280 million, Kivijarv said, citing data from the PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.
PQ Media expects European DOOH revenues to rise 11.9% in 2011 to $1.88 billion, propelled by stronger overall ad growth and new DOOH networks in various venues, including entertainment and transit. Spending will reach $3.51 billion in 2015, as growth spikes in 2012 and 2014 when the U.K. and Russia host the Summer and Winter Olympics, respectively. Overall regional growth will be tempered somewhat, according to PQ Media, by the sluggish cinema market, although the success of National CineMedia in the U.S. has prompted brands to reevaluate their European strategies. DPN revenues will rise 9.4% in 2011 to $1.53 billion and post a 12.7% CAGR in the 2010-2015 period, driven by gains in entertainment and retail. DBB revenues, meanwhile, will rise at a faster rate, increasing 24.6% in 2011 to $349 million and posting a 28.3% CAGR in the forecast period, according to the PQ Media Global Digital Out-of-Home Media Forecast 2011-2015
The U.K. is the most developed European market, accounting for about one-third of revenue, while Russia surpassed Germany in 2010 as the third-largest market. The U.K. DOOH industry is the largest European DOOH market at $537 million in 2010, although its growth trails other large DOOH markets due to a sluggish economy and the reluctance of brands to include cinema in the their budgets. Russia’s DOOH market is still very young, as operators are in the early stages of developing DPNs and DBBs. Russia, however, posted the strongest regional CAGR in the 2005-2010 period at 33.5%. Russian DOOH operators face challenges, however, such as the country’s topography and limited new technology penetration, making it difficult for DOOH operators to manage content.
Meanwhile, France was the fastest-growing European market in 2010, expanding 34.5%, primarily due to several large DBB transit contracts awarded during the year. It’s also home to global OOH giant JCDecaux, which plans to rollout a slate of DBBs in various transit locations in the forecast period. Germany’s DOOH industry is not as advanced as that of Russia or France. Strict government regulations, such as the prohibition of roadside billboards on the AutoBahn, and the lack of an aggressive strategy by market leader Storer, have squelched growth, Kivijarv told the Screenmedia Expo audience, citing the PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.
Large global OOH companies are prevalent in Europe, particularly Clear Channel and JCDecaux. Clear Channel is in 18 European markets, including the six leading markets, and has rolled out digital or Spectacolor DBB networks in Austria, Belgium, Czech Republic, Denmark, Finland, Hungary, Poland, Portugal, Romania and Switzerland. JCDecaux, meanwhile, has subsidiaries in 19 of the smaller European markets, including a number with DBB networks, such as 950 DBBs in the Helsinki Metro & Tram, 800 DBBs in the Vienna Metro Graz Tram, and 120 DBBs in 10 airports throughout Norway.
Economic and advertising recovery in Russia spurred a 23.8% gain in DOOH revenues in 2010 to $201 million, according to PQ Media. Meanwhile, new DOOH network rollouts in Germany sparked a 7.7% increase in revenues to $176 million, although weakness in the cinema category caused the DOOH market to experience a 1.8% compound annual decline in the 2005-2010 timeframe.
Among the DOOH operators key challenges cited in PQ Media’s research were the continued need for strong standard measurements, planning and buying systems, and better program content and advertising creative.
About PQ Media
PQ Media (http://www.pqmedia.com) is the leading provider of alternative media econometrics. PQ Media’s proprietary econometric research system delivers actionable strategic intelligence to help clients grow their media, entertainment and communications businesses. PQ Media partners with private equity firm Veronis Suhler Stevenson on the VSS Communications Industry Forecast, the U.S. industry’s benchmark for spending, consumption and growth data for 25 years.
For more information, contact Gabriella Kallay at gkallay [at] pqmedia.com or 203-921-0368.
Source: PQ Media
