Technology to revalue and reshape Out of Home media by 2020

6 July, 2011

Kinetic Worldwide report: On the Threshold of Change –The Future of Out of Home Media (UK)

An exhaustive study of the future of poster advertising in the UK by lifestyles and environments agency Kinetic Worldwide, reveals Out of Home media will not only increase its market share as a result of digital technology, over the next ten years, but its structure will change significantly too.

The transformation of Out of Home as an advertising medium will be matched by the changes digital posters bring to urban environments and interactive communications with consumers out of the home.

Kinetic has analysed industry data, consulted almost twenty media and advertising experts and carried out new research to draw a series of conclusions including:

• Digital technology will grow Out of Home’s (OOH) total share of media:
Total OOH media spend to see continued growth from £880m (2010) to £1.15bn by 2020. Digital revenues will reach almost £260m accounting for approximately 23% of total OOH spend.

• The total OOH site universe will grow with digital adding additional sectors:
Kinetic’s analysis reveals that digital sites will not simply replace static posters, but will create additional levels of consumer reach. Digital poster networks will be visible across 30 cities nationally with almost 110,000 screens in use. Aggressive digital expansion expected for 6 sheets and bus shelters after 2015. Only a limited rationalisation of static posters is expected.

• The medium’s operational structure to evolve:
Two broad OOH sectors will emerge: Broadcast and Targeted. Broadcast will include large numbers of well-positioned static sites and premium digital sites. Targeted will include national networks of digital sites capable of time-flexible distribution and real-time reactive campaigns.

• Dynamic use of digital sites to create a powerful high-street direct response medium:
The deployment of national digital poster networks in proximity to retail locations and the integration of day-part flexibility; real-time planning and new audience-based trading systems will unlock the potential to drive “smart” retail promotional marketing.

• NFC and social media likely to transform relationship between posters and consumers:
Some urban areas will deliver a multi-media experience. Instantaneous download capability within a growing number of smartphones, matched by NFC or RFID interactive technology in posters, could transform promotional marketing and the distribution of social media and entertainment content even in low-dwell time urban environments. In addition a significant number of sites are expected to be capable of recognising consumer types and moods.
• Research indicates consumers already want to interact with posters:
New research by Kinetic reveals that half of consumers already see the value of interacting with posters and 20% even expect to be recognised by posters in the future; 75% expect to carry a smartphone or tablet computer; 66% expect to see digital screens in most city centres; 70% think digital posters beneficial in high-dwell time locations.

• Technology will not only re-value OOH but will forge a far closer relationship with other media and with technology sectors:
Kinetic’s analysis suggests OOH will develop a symbiotic relationship with mobile marketing and internet based campaigns, opening up new revenue streams. Content will play an increasing role in OOH media and billboards are likely to become a distribution point for digitised news and entertainment content.

James Copley, COO UK at Kinetic Worldwide comments: “Rather than being a disruptive force, digital technology will create enormous opportunities for Out of Home media. Our analysis, consultations and research suggest the poster industry is entering a transformative period; one in which it will gain market share by integrating technology and delivering a wider range of effective and engaging propositions.

“What is clear is that rather than just replacing static sites, digital posters will enable Out of Home media to offer advertisers both reach and more direct engagement. The potential to fuse digital posters with mobile interaction also has great potential. It’s up to our industry to grasp these challenges and opportunities.”

For more information, please read the attached report. Please note the report is divided into three sections covering: 1. Future opportunities and challenges (investment, site deployment, planning); 2. Consumer interaction, technology and content; 3. Targeting measurement and trading. As well as an overall executive summary, each section provides a series of specific conclusions.

For more information on any aspect of the report contact:
Patrick Barrett, Simpatico PR +44 (0)20 8678 8606  
Nick Mawditt +44 (0)20 7544 4635  

Methodology for Kinetic Worldwide’s report: On the Threshold of Change – The Future of Out of Home Media in the UK
Over a six month period, Kinetic conducted interviews with key stakeholders including investors, consultants, media owners, media and creative agencies, as well as adding our own specialists analysis of the key issues faced by the industry. Consumer research was conducted on key areas including consumers’ attitudes and awareness of digital posters and their up-take and attitudes to mobile technologies, using Kinetic’s regular quarterly consumer panel including more than 500 adults UK-wide and a separate London only panel. In addition Kinetic embarked on a comprehensive analysis of market data, drawing together site location data, investment plans, tender schedules and advertising spend forecasts to create a realistic assessment of revenue growth potential and site deployment.

About Kinetic
Kinetic Worldwide is the global leader in understanding how brands can connect with people’s lifestyles and the environments they engage with. Fully owned by WPP and part of the tenth avenue performance marketing division, Kinetic’s expertise and insight helps deliver solutions for clients that achieve ambitious brand and marketing goals.

Kinetic is traditionally an Out of Home media agency and in addition today delivers wide-ranging specialist expertise through its complementary service divisions including Joule, Aviator, Target Health, Destination Media Group, Kinetic People, Meta, ALCANCE, Zone and Hi Rezz.
Kinetic employs over 800 professionals across 38 offices. 

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