William Gibson’s assertion that "the future is already here, it’s just not evenly distributed" could have been written with out-of-home specifically in mind. Last year was a stellar one for OOH, with likely final year-on-year revenue growth of more than 10 per cent. Clearly, the Olympics played their part in the third quarter, when growth was 25 per cent. How-ever, three other factors contributed throughout the year. There was continued investment by the industry into expensive digital plant, there was an enhanced focus on data and research, and more "spectacular" sites were built in key cities across the UK.
As a result of this investment, OOH stands on the threshold of an exciting and unique two- to three-year period – OOH will become an even more important part of the communication process. The outdoor canvas is rapidly changing from a static presence to one that drives interactivity and lasting engagement. It is becoming a "junction point" where its ubiquity, digital delivery and mobile-based data opportunities all meet.
Tesco’s OOH sites in the departure lounge of Gatwick North Terminal, which ran in August last year, are a great example of this change. Travellers could order groceries for their return to the UK via their mobile, using barcodes as prompts – a brilliant service that was clearly explained and easy to use. As a result, given the right sites, it is now possible to set up viral shops anywhere on a relatively small, flat surface. Environments with natural dwell time such as malls, stations and airports are likely bases for this new type of shopping.
Airports are also changing from simple departure points to shopping centres with travel attached, and they will lead this drive in interactivity. In 2013, business-class travellers checking in will be given the opportunity in certain airports to have a small tag attached to their hand luggage. This near field communication-enabled tag will track them as they move around the departure lounge and will prompt visual or aural messages unique to them. They will receive instantly redeemable electronic coupons or directions to relevant websites or competitions. Their responses will be captured and analysed to refine the process.
This interactive and/or digital element will be one of three distinct strands that will define the use of OOH over the next couple of years – the other two being its ability to deliver huge audiences and "destination" sites.
Outdoor’s core use will still be driven by the medium’s ability to build huge audience cover and frequency quickly. This remains OOH’s key strength. While the growth of mobile and digital will generate most of the headlines in 2013, reaching large numbers of consumers through memorable creative work is still what drives the bulk of advertiser spend.
The key issue that media owners face is a difficult one. They need to balance the need for continued investment levels into digital sites while ensuring that their core static inventory is well-maintained and posted. There has been a steady culling of poorer static sites over the past few years, but there remains an oversupply of six-sheets in the market, for example.
As OOH undergoes this transformation from one type of media channel to a multilayered channel doing many things, the industry needs to debate how it collectively manages this change. There is a danger that the rush to digitise may end up cannibalising existing revenue. The example of the national newspaper market comes to mind, where more and more sections and supplements were chasing the same money and audience.
The focus in 2013 still needs to be on what OOH does best while facilitating its evolution into a multifaceted channel. However, digital screens with instant copy delivery will allow the medium to chase "tactical" money that would otherwise have gone to national newspapers. The immediate effect of this digital opportunity will be to increase the pressure on the traditional 14-day purchase cycle. At present, it feels like the outdoor medium is developing a 21st-century product but is still broadly selling its inventory as if it were in the 80s.
The growth of digital sites, alongside the new Postar 2 research, which is released in February, should accelerate the change away from the historically rigid selling periods. Extra sales flexibility should drive extra revenue.
Advertisers that have avoided the medium will be able to test it at relatively low cost.
The third and final strand that will define OOH in the next two to three years is the further development of "destination" sites such as the IMAX at Waterloo station. Here, advertisers are focused less on absolute audience delivery and more on the general statement that these sites make about them. Sites such as the IMAX are increasingly seen as defining OOH overall and they have been very successful at siphoning money away from the other more traditional elements within outdoor.
The effect of this collective dynamism is a medium that is capable of rapidly increasing its market share in 2013. The nexus of mobile, digital and ubiquitous presence will attract new advertisers. A potential culling of poorer sites will improve overall quality without tangible revenue loss.
Postar 2 will turbocharge agency planners to focus on smarter planning while changing the mechanics of buying. "Destination" sites will continue to be built in the key conurbations. This mix of the old and the new, the static and the moving and the small and the large will ensure that OOH grows from its current position. The future is here. The future may not be evenly distributed, but the future is clearly OOH.
Roy Jeans is the chief executive at Rapport