How OOH can overcome its ‘5% syndrome’
A theme running through the World Out of Home Organisation’s (WOO) conference in Lisbon this week was how out of home (OOH) can surpass its current share of global adspend over the next five years.
Outgoing WOO president Tom Goddard told delegates in his introductory speech at the Global Congress that the industry needed more collective action to get over what he calls the “5% syndrome”.
Showing a slide of global out of home (OOH) adspend since 2017, he said: “Those of you who’ve worked with me will know I hate this slide. I call this the Flat Line Slide, and it’s the slide that shows our share of adspend.
“For me looking at this line over the years, hovering at 5% is a disappointment to me, because I know all the investment that’s going in.”
He made several suggestions to the industry to incrementally grow the share of global media spend by 1% each year to reach 10% by 2028.
‘Too many sales points’
Goddard suggested online has taken 60% of the overall global adspend pie and seem to “get away unchallenged” which was “a great frustration” given the progress and innovation out of home (OOH) was making.
He diagnosed some of the other issues holding back brands and agencies spending more in the medium was having “far too many sales points”, a proliferation of ad tech which he finds “quite frustrating”, a lack of common standards and “the old chestnut of patchy audience measurement”.
To combat this he said OOH needs to accelerate media owner consolidation as currently the number of sales points make it seem like a complicated buy to young buyers used to buying online.
He used the example of JCDecaux recently acquiring Clear Channel assets in Italy and Spain announced last month, but clarified consolidation does not need to mean “stepping out” of a market, and could mean working in consortia or working with centralised systems.
Goddard said it was a fact that consolidated markets tend to command a higher share of spend with some examples of “super consolidated” markets like Germany and Switzerland.
He added that ad tech should be a “great consolidator” but that the current ecosystem was a “mess” and “maze” for young planners.
Another recommendation he made was OOH as an industry needed to simplify and standardise its language to make it “much more streamlined and accommodating”.
This is a point he mentioned at the Global Congress in Toronto last year; that there is not a standard term for classic OOH, which can also be called traditional, static or paper amongst others.
“It’s a small point, but to attack online, they have a common language so we’ve got to get all this language sorted out and we’ve got to get it into standard form,” he stressed.
Goddard said WOO are initiating a scheme within the organisation called “Measure the World” because of a lack of JIC or gold level audience measurement being “a real drag on this 5%” where “huge swathes of the planet are not measured”.
He urged media owners in particular to invest more in audience measurement for the betterment of the sector and their own companies and markets.
Goddard said: “The main obstacle is media owners reluctant to invest in audience measurement, kicking the can down the road, we can do it next year or saying well, things are a bit tight this year. If you’re a market with no audience measurement, and you want to have one, if you start today, you won’t have it for three years, so you really need to start today and you need to invest.”
He also called for a less siloed mentality to advance spend in OOH.
“We need to cast off this island mentality, and I’m going to say something controversial here, I find that a lot of media owners’ IT departments have a conflict of interest,” he explained.
“It’s not in their interest to outsource, it’s not in their interest to put some of the inventory on a broader platform, and so I think there is a massive duplication of costs as all of these IT departments say let’s have our own system as we will have a competitive advantage over our neighbour. It really is not the way forward.”
Market Spotlight presentations later on in the day for Southern Europe, Brazil and China echoed some of these points as these are markets where OOH is more than a 5% medium, between 7% and 10% of adspend.
From automation to sustainability and collaboration
Another point Goddard made was the importance of automation in the buying process across the board including programmatic, digital and traditional or classic OOH.
In addition, a whole other subject “for another day” was how OOH media could monetise social media amplification as many people, himself included, tend to see campaigns through phones, particularly international ones.
The ‘art’ of using social media to achieve earned media value for OOH
Goddard also urged delegates to “empower and mobilise” national associations more, as well as act on and speak more about their sustainability credentials to agencies and clients.
He said: “The writing’s on the wall, as far as sustainability is concerned, because the brands and the agencies are telling us to get our shit together or we’re going to be in trouble, and they’re saying this to all their media partners.”
Goddard added these partners were demanding all the media channels adopt an Ad Net Zero policy, and get there “as quickly as possible”, and while OOH has a really strong story when it comes to sustainability, the problem was the industry had not been showing or demonstrating that enough.
This message on the importance of sustainability to the channel was echoed by other panellists like Stephanie Helen Scheller, head of sustainable solutions at Omnicom Media Group, who sat on the conference’s first ever sustainability panel.
She told attendees that somehow out of home has been “managed to become the bad player” around sustainability, with press on subjects like energy consumption and issues in France and Germany particularly arising recently.
Scheller added: “It will come to the point where sustainability has become such a huge major factor that it will decide media investment, I cannot say this enough. And I really do have clients that are now considering the media investment according to the carbon footprint or even the whole ESG perspective. So it will come.”
She called this a “great opportunity” to educate the industry and consumers about the eco-efficiency of the channel, and “a huge window of money and value” which will close on companies not acting sustainably.
In separate sessions, on a panel of national associations Amanda Dorenberg, president of COMMB, Canada’s marketing and measuring body of out-of-home media, called for a “complementary rather than competitive” approach to other media channels to help grow OOH’s global share of the media spend pie.
This was echoed by Cathy O’Connor, CEO of Australian media owner OOH!Media, as she said communicating more around the incremental job OOH does to reach when combined with TV, radio and online was critical, along with more effective use of industry data, proprietary data like transactional data, and a focus on building up the sector ahead of the company.
Barry Cupples, group CEO of specialist OOH agency Talon, called for much more collaboration in the industry to communicate, merchandise and market OOH better on its qualities including trust, scale, brand safety and creativity. He also wanted OOH to mark itself as the most sustainable media channel.
What’s next?
While OOH spend globally returned to pre-pandemic levels in 2022, despite continuing lockdowns in China and the energy crisis last year, Goddard said the forecasts for the second half of 2023 were “really strong”.
There is the potential for OOH to break the $40bn spend mark if their forecasts turn out to be correct, he said.