The global revolution in consumer behaviour and media consumption is challenging many of the accepted fundamentals of media strategy. The singularity of the couch-bound primetime TV audience, or the car-bound drive-time radio listener, has been replaced by multi-platform access to the ‘always on’ media consumer.
In such an environment, out of home (OOH) media continue to play a vital public role, informing, entertaining, and of course, communicating and selling. It’s true to say that from the moment consumers leave their home they enter the OOH zone.
Although OOH has maintained a relatively stable share of ad spend (about 4 to 5%) through the recession and beyond the high point of the 2010 Fifa World Cup, one needs to question why this changing advertising reality has not manifested itself in even stronger support for OOH media.
Some media pundits have recently expounded the view that the outdoor versus OOH advertising classification debate is purely a matter of self-indulgent semantics, rather than an attempt to highlight this fundamental shift in the dynamic of commercial communication.
Are they pragmatists or Luddites? After all, what’s in a name?
The use of the classification OOH, rather than the obsolete term ‘outdoor’, implies a far more inclusive range of media formats that go beyond static display to offer advertisers both thematic and decision-interval opportunities to interact with consumers on the move.
Nielsen Media Research reports that outdoor media in South Africa currently attracts a gross advertising investment (excluding media self promotion) of some R1.6 billion annually, or 4.7% of measured advertising spend.
Unfortunately, reported advertising investment in South Africa is restricted to a limited cross-section of the formats from the commercially available OOH media mix. In addition to this, unlike other reported media formats, outdoor advertising investment has historically been reported net of agency commission. This fact alone implies a 16.5% under-read in reporting OOH activity.
Due to the multi-faceted structure of the OOH industry and the ubiquitous nature of OOH advertising, it is widely accepted that this figure significantly under-represents actual investment in OOH. Indeed, the existing classification for reported ad spend tends to group many OOH media in terms of their financial stakeholder interests, rather than their strategic functionality, and this classification needs to be interrogated if the resulting data is to remain relevant to marketers and media decision makers.
More inclusive industry measures – incorporating OOH platforms such as large format building wraps and stadium perimeter boards, advertising in shopping malls, washrooms, fitting rooms and in-store, some forms of transit media and activations etc – indicate a much higher level of investment in OOH. A significant cross section of OOH companies, currently not reporting advertising revenue figures to Nielsen, submitted annual gross revenue figures for independent scrutiny.
These combined ad spend figures (inclusive of 16.5% agency commission) reflect at least an additional R2.4 billion in advertising investment, which in turn significantly boosts total gross OOH ad spend to some R4.3 billion or about 11.8% of advertising investment.
What does this mean for advertisers? In a market that seems obsessed with the concept of a fair share of advertising revenue, many marketers might come to the conclusion that they have been under-investing in the OOH sector, despite assurances from planners that their media plan conforms to industry norms.
This estimated figure exceeds the reported global average (according to the Group M Worldwide Media & Marketing Forecast 2012) of 6.6% but it is worth noting that other emerging markets such as Russia (16%), China (11%) and Mexico (9.5%) tend to corroborate this perspective. This is particularly noteworthy for developing markets in Africa where access to print and commercially viable TV is relatively restricted. OOH investment in Nigeria reaches 30.6% of reported spend. So an 11.8% share of ad spend for OOH in Mzansi should really come as no surprise. In fact, the only real surprise is just why the OOH industry has been so silent on the issue for the past decade. Maybe it’s time for all interested parties to start playing the long game rather than just trying to score points off each other?
Outdoor or out of home … what’s in a name? An additional R2.4 billion in advertising investment and an 11.8% market share it seems!