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Wednesday, 23 February 2011
U.S. Remained Largest Global Market in 2010, while China was Fastest Growing

Russia Will Be Europe’s Fastest Growing Market through 2015, but U.K. to Remain Largest

Emerging BRIC Markets Projected to Post Highest Double-Digit Growth from 2011-2015


STAMFORD, Conn.--(BUSINESS WIRE)--Global digital out-of-home media (DOOH) revenue generated by digital place-based network, billboard and signage operators, grew 16.3% to $6.47 billion in 2010 and is projected to expand 16.9% in 2011, according to new data released today by PQ Media (www.pqmedia.com), the leading provider of media econometrics. U.S. DOOH operator revenue grew at an accelerated 15.1% in 2010 to $2.07 billion and is projected to expand another 16.7% in 2011, according to the PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.

The new report includes actual full-year 2010 revenue and growth by DOOH platforms, venue categories, the four major global regions and 16 leading markets worldwide. It also includes five-year forecasts, five-year histories, and a wealth of other exclusive data, analytics and insights. PQ Media defines the global DOOH sector through two major platform segments – digital place-based networks (DPN) and digital billboards & signage (DBB) – and six venue and location categories, including cinema, retail, office, entertainment, transit and roadside.

Global DPN revenue, the larger of the two platforms, grew 14.5% to $5.06 billion in 2010, driven by strong double-digit rebounds from the 2009 malaise in key leading markets in all four major regions – the Americas, Europe, Asia/Pacific, and Middle East & Africa, according to PQ Media. The U.S., the world’s largest overall DOOH and DPN market, as well as Brazil, the U.K., Russia, China and India each expanded at double-digit rates in 2010. These markets are expected to post similar growth again in 2011, when PQ Media projects global DPN revenue will increase 15.2%. U.S. DPN revenue bounced back from a slight decline in 2009 to post a 15% gain to $1.54 billion in 2010. U.S. growth is forecast to accelerate to 16% in 2011, driven by double-digit expansion in all five venue categories, including the largest, cinema, and the fastest-growing, office, according to the PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.

Meanwhile, global DBB revenue growth jumped 23.2% in 2010 to $1.41 billion, fueled by accelerated double-digit growth in all four regions. The U.S., U.K. and the emerging BRIC markets each produced faster double-digit growth in 2010 and are projected to generate similar increases in 2011, when PQ Media anticipates global DBB revenue will rise 23.1%. U.S. DBB revenue increased 15.4% to $532 million in 2010 and is expected grow at an accelerated 18.8% in 2011, fueled by gains in all four location categories, primarily roadside, the largest.

“PQ Media’s research team spent a year using our proprietary econometric system to collect, analyze and synthesize a massive amount of global DOOH data, as well to survey hundreds of top executives at leading DOOH operators, media agencies, brands and financiers worldwide, who serve on our exclusive Global Opinion Leader Panel™,” said PQ Media’s Quinn. “The result is the most comprehensive, in-depth research report ever published on global DOOH. And while DOOH revenue rebounded sharply in 2010, and it’s one of the world’s fastest growing media, our research unveiled some key challenges DOOH faces going forward to become a major component of advertising budgets.”

DOOH Growth Opportunities Abound, but Key Challenges Remain

Among the challenges agencies and brands surveyed by PQ Media expressed regarding global DOOH in general, but the U.S. DPN segment in particular, is the continued need for strong standard measurement, planning and buying systems, as well as better program content and advertising creative. In addition, the U.S. DPN landscape continues to be very fragmented, as PQ Media’s research identified 220 DPN operators running 468 networks in the U.S. at year-end 2010. The relatively few DPN operators offering national scale was also cited by agencies and brands as a challenge.

While there were dozens of mergers, acquisitions and bankruptcies from the start of 2008 through year-end 2010, PQ Media estimates that over 90% of U.S. DPN operators generate less than $10 million in annual revenue. But further consolidation is expected and necessary over the next couple years to defragment the DOOH network landscape, provide brands with more national scale and to incorporate mobile, social and interactive media enhancements, according to the PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.

Most of the ad dollars spent on U.S. DOOH networks are derived from agency OOH budgets. But some leading DPN operators and trade associations in recent years began targeting agencies’ larger TV budgets, and one DOOH association executive stated publicly that there’s a growing belief among agencies and brands that TV is dying due to its declining effectiveness as an ad medium, creating a major growth opportunity for DPN operators. In fact, total U.S. TV viewership increased every year from 2001 through 2010 and TV ad spending increased in eight of those 10 years, except for two economic recession years. Most agency executives serving on PQ Media’s Global Opinion Leader Panel™ reported that a number of DPN operators were actively selling their networks against TV in 2010, despite that audiences, mindsets and behaviors of in-home TV viewers drastically differ from those of DOOH networks.

The vast majority of agencies and brands surveyed by PQ Media indicated they believe DPN’s roots are in OOH media, not broadcast or cable TV. And, in leading markets outside the U.S., traditional OOH and DOOH are most often considered together as one industry, usually with only one or two major trade associations that tend to speak with one voice to agencies and brands, albeit using different tonalities for the various industry segments. The preponderance of agency and brand opinion leaders indicated that for the U.S. OOH media industry, including traditional OOH and DOOH, to gain a greater share of total media spending it must come together, trust each other, collaborate and speak with one voice. Total OOH media’s share of overall U.S. advertising revenue ranks near the bottom of the 16 leading global markets, according to the PQ Media Global Digital Out-of-Home Media Forecast 2011-2015.

“The DOOH sector is viewed by most global agencies and brands, as well as DPN operators outside the U.S., as the evolution of OOH media – an improvement upon traditional billboards and signage,” Quinn said. “PQ Media’s research shows that DPN’s key advantage over traditional media, such as TV, is that with strong program content and ad creative it can engage target consumers in various captive and transient venues to seed their next buying decision.”

While DOOH networks are venue-based, all agency and brand opinion leaders, and some DPN operators, were adamant that networks should focus primarily on brands’ target audiences, their mindsets and behaviors in particular venues at critical times during their daily routines. Most agency executives on PQ Media’s panel agreed the best way for DOOH networks to gain more traction – until they have a national footprint like cinema – is to sell their networks as part of integrated media solutions, whether they’re budgeted and assimilated with OOH, TV, internet or alternative media. Agency opinion leaders, however, stressed that DPN operators need to focus more on what’s best for their brand clients’ growth objectives. U.S. cinema networks, the world’s largest and most consistently growing DOOH venue category, began its decade-long ascent by activating other media through integrated multimedia campaigns.

About PQ Media

PQ Media (www.pqmedia.com) is the leading provider of global media econometrics and pioneer of emerging media research. PQ Media’s proprietary econometric research system delivers actionable strategic intelligence to help its 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@pqmedia.com or 203-921-0368.
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