20 Apr 10

Digital Outdoor Update

By Karen Wilding, Kinetic

It looks as though 2010 will be a year of consolidation and stabilisation for some of the UK major media owners, following heavy investment in digital in recent years. What could potentially be in place in the medium term, over the next 2-4 years, will depend on the economy, the investment available, and the price of technology. 

Site development

Roadside. Tight planning regulations and continued high capital costs in the face of slow growth means that numbers will not dramatically increase in this area. Expect some developments in the next 2 years or so in key conurbations only and including further additions in London. There is certainly appetite outside the capital, and we know that Ocean intend to develop site(s) in Birmingham and other major cities. We are also seeing signs of the emergence of smaller independent players (eg Super-novae and LED Screen media) in to the digital roadside/city centre market in the regions. Major media owners still have to be convinced of the incremental revenue gained by digital OOH roadside.

Transport. CBS are not intending to invest any further in DOOH in the short term. Digital bus exteriors are a distinct possibility by 2012/13, and already exist in the US. For this to happen now, CBS would be looking for a long term partner with whom to share the investment. In 5 years +, this is certainly something that we can imagine being more accessible, but still on a relatively small scale, and London centric. It is worth noting, however, that it is not clear at this stage whether planning permission for full animation on bus sides would be granted.

We do expect to see rail D6s (Digital 6-sheets) roll out nationally in the next year or so, and also the digital development of other smaller transport networks, namely the Glasgow underground and Newcastle metro. In the medium term, we may even see content-driven media on trains and in some buses, but this has been trialled before to limited success and there is no-one actively driving this at the moment. Should this goes ahead, mobile technology will offer downloads etc so the content is likely to be mute to avoid intrusion.

Airports. The new BAA tender will inevitably see large increases in digital advertising. Terminal 5 is already heavily dominated by digital, but this will expand across the country. DEP and digital 6-sheets equivalents will be the formats of choice.

Retail. Digital 6-sheets in malls and shopping centres will grow steadily over the next few years, but there will also be significant growth in temporary digital displays using interactive projections and the like. Improvements in technology sizing and pricing is allowing digital OOH to be much more mobile.

Destinations/Ambient. Many of the existing screen networks will continue to grow over the next few years. Healthcare centres (anything from GPs, hospitals, to dentists), gyms, and petrol forecourts will see heavy investment in particular, and Clear Channel are hoping to launch their “Socalite” product in bars later in 2010. Along with retail, it will be in these environments that truly “national” networks of digital screens will become available within the next few years.

Longer Term
It is very difficult to try to estimate what % of sites in the UK will be digital in the longer term and what the tipping point might be. The cost of technology is certainly a deciding factor in this, but in addition media owners need to think carefully about the extent to which they develop their premium inventory. They will not want to oversupply the market and/or devalue the product.

As critical mass has been reached in certain environments in the UK (London tube and rail, for example), and there is such consolidation in the market, some of the major media owners will almost certainly look instead to those European countries currently lacking in digital inventory. In 2009 DOOH represented 8% of overall UK OOH revenue, a figure currently by far the highest in Europe. We expect that successful digital developments in Europe will follow the UK example: portrait formats at eye level that are easily consumed, in key transport, airport and retail hubs.