OOH Industry Overview for 2020

2019 was, in short, another successful year for the Out-of-Home industry. We saw a continuous growth of the industry for many consecutive quarters. We anticipated its growth to continue throughout 2020. 

In June 2020, it is strange to look back at not even six months earlier. The predictions for 2020 are a peculiar topic as everyone in the industry, including us, has been making them based on linear data. Then 2020 happened and as events unfolded, we found most of those predictions dead in the water.

Many of said predictions might yet become a reality. But the horizon to reach them suddenly became much farther in the distance. With this in mind, let’s look into how 2020 has treated OOH advertising so far, and also what else it may hold in store! 

UK’s Outsmart reports Q1 revenue of £276 million

The trade body for UK’s Out of Home industry, Outsmart, recently showed a year-on-year decline in revenue of 3.1%. This result is a clear consequence of the lockdown which started in March 2020. According to figures collected prior to this drop, the OOH industry was on track for growth, as was the case for the rest of the world. 

For the UK, if the factor of COVID-19 had been taken out of the equation, the OOH industry expected a year-on-year growth in 2020 of 1.8% for January and 3.8% for February.

Furthermore, Outsmart showed individual data for DOOH and OOH. Digital Out of Home showed a growth of 5.2% in Q1 2020, compared to its growth of 10.9% in Q1 2019. Classic Out of Home showed a decline of 11.1% in Q1 2020, compared to the 3.1% growth in Q1 2019.

JCDecaux: Q1 2020 revenue down by 13.9% 

Studying the current data of ad spend and revenue of an industry can be done best by observing its leading companies. JCDecaux is the top OOH ad company worldwide and as such it is a good compass to roughly gauge its status.

For the first quarter of 2020, the company faced a drop in revenue of 13.9% (€723.6 million). This percentage comes from data on street furniture, transport, and billboards. The first quarter adjusted revenue for street furniture dropped by 5.5% to €325.5 million. For transportation, it decreased by 23.4% to €281.7 million, and for billboards by 9.0% to €116.3 million.

 

Jean-François Decaux, Chairman of the Executive Board and Co-CEO of JCDecaux, commented on the data regarding Q1 revenue, saying: "We now expect the negative impact of Covid-19 on our business to significantly increase in the short term but it is not possible to quantify its depth or duration of the impact. As a result, we are not able to provide any guidance for Q2 2020 as well as for Q3 and Q4.”

Having said that, he added that the company expects (D)OOH media to benefit from eventual reopening of countries and cities, but primarily street furniture and billboard advertising. Transport will likely take longer given the social distancing measures.

When will events return for OOH?

Although the drop in revenue is the greatest wound caused by the global pandemic, the impact on OOH’s events of similar nature is not to be ignored.

Even before the lockdown began in early 2020, events got either cancelled or postponed. In no time, we reached a point where all OOH events faced this issue—alongside pretty much every other larger event or gathering in any other industry. Some events faced a delay of a few months. Some were cancelled and delayed to 2021. And lastly, those that could do so, took place online.  

Keeping this in mind, take a quick look at the computing trade show Computex. First postponed to fall 2020, it recently announced the cancellation of its 2020 show in Taiwan. This wouldn't be extraordinary if Taiwan hadn't also fully contained COVID-19 like few other places. Following this cancellation, InnoVEX 2020 Special Edition, an event promoting Taiwan’s startups, was also cancelled for fear of reimporting and spreading the virus. The corresponding caution and cancellations are entirely justified, yet they demonstrate how the pandemic can still have a strong influence even once locally contained. Keep in mind that Taiwan never even had a serious outbreak to begin with. The total reported number of infected at this time is far below the 1,000 mark. It remains to be seen how quickly other more seriously-struck countries will recover in regard of events. 

We await Q2 2020 with patience

Q1 2020 was hit the most by the COVID-19 pandemic. Just as we reached May, things started looking a little bit better and outdoor traffic started recovering from the lockdown. We don’t anticipate any major breakthroughs or an excess in good news in the coming months. Though it’s likely that Q2 will report some improvement over Q1. Of course, this is based on the presumption that the spread of the pandemic will continue its descent. We still have to remain vigilant as we step into uncharted territory. We must also be aware that predictions for the months ahead can change at any given moment!