GLOBAL DIGITAL OUT-OF-HOME MEDIA FORECAST: STATE OF THE INDUSTRY Leo Kivijarv, Ph.D. Vice President/Research February 2, 2010 Amsterdam, NL
Global Economy Worsened in 09, Particularly Advanced Countries Worst global economy since 1940, projected decline of 1.1% in 09 Advanced countries, where majority of DOOH spending occurs, exhibited steeper declines Global Real GDP Growth Rates: 1969 to 2009 8% 4% 0% 1969 1979 1989 1999 2009 -4% Worldwide Advanced Countries Sources: PQ Media, International Monetary Fund, Haver Analytics www.pqmedia.com 2
DOOH Shake Out – 75+ Cos. Acquired or Closed in 08 & 09 Acquired / Merged / Investment Closed 19 th Hole TV Accent Health Librium TV LocalVision Alloy Fitness Network LiteLogic 42 Media MenuLogic Avanti Screen Media (ASG) Magic Media/Fairway Outdoor AdMax Digital Advertising OOH Vision Network Barfly Interactive Networks Music Concierge AdWalker POP Media Bhootan/Outcast (FuelCast) Neo Advertising/Mediamarket Astralis Media Push Pop Media Boondoggle Sports Network Never.no/1-2-1 VIEW BevVision Reactrix Brand Connections Nordic Digital Alliance/IntelliNet Carleton Cinema Advertising Seattle Digital Signage Canadian Health Net (PHSN/Cruise/Medik) OnSite Media Network Circuit City Ad Network SparrowCast Cineboteco Pathware/SVI CompUSA Ad Network StreetBroadcast ClubCom Pixman Nomadic Media Digital Ad Network Tesco TV Community Communication Network PlayNetwork Digital Poster AS Transit TV Network Corporate Image Network Q-vision DrinksTV Vertical Brands Digital Life (ASG/StreetBroadcast) Ripple TV Emba Virgin Megastore Ad Net Digital Media Group Sidetrack Tech In-Store Media Networks Vision Media Group Ek3 Simply Media/Toni&Guy.tv i-vu Limited VJIVE Networks Estates Media Partners Sub.tv/Gym Screen Media Jiffy Lube Network Watchit Media EZ Show Network Subway Link/TV Mulher e Mae Kaleidovision Network The Golf Network Titan Outdoor Advertising Gym Screen Media Vertigo Group Haizou Media Corporation (HMedia) Viewento ICTV (Ivanhoe/Pattison/OneStop) Wall AG IdeaCast Wellness Health Education Net LevelVision/College Bookstore Network Zilo College TV Network Sources: PQ Media, Multiple Sources www.pqmedia.com 3
Today’s Objectives About PQ Media 1. Global Digital OOH Media in Perspective Relative to Media, Ad & Economic Trends 2. State of Global Digital OOH Media in 2009 3. U.S. Digital OOH Media Drivers as a Reflection of Global DOOH Trends 4. Global Digital OOH Media Forecast 5. www.pqmedia.com 4
About PQ Media PQ Media is the leading provider of global media econometrics and pioneer of 21 st century alternative media research Our experienced management team and analysts are mapping the new frontier of media comprised of 20 media & communications segments and more than 100 sub-segments PQ Media advises top executives at leading media companies, financial institutions, agencies, brands and management consulting firms on real growth opportunities in the fragmented media landscape, based on our accurate media spending and usage forecasts Through our custom research, syndicated reports and proprietary PQ Medianomics™ methodology, clients receive unbiased insights and actionable strategic intelligence they can’t find anywhere else www.pqmedia.com 5
PQ Medianomics™ PQ Media’s system utilizes proprietary data collection techniques, algorithmic models and analytical approaches to develop market maps, competitive landscapes, and to forecast outcomes The process also layers the impact of key data and variables, such as economic, demographic, behavioral, technological and regulatory, among others SpendTrack Database™ Margin of Error = +/- 2% Global Opinion UsageTrack Leader Panel™ Database™ www.pqmedia.com 6
PQ Media Global DOOH Media Forecast 2009-2014 PQM published the 3 rd edition of Global Digital OOH Media Forecast in 2009 • Digital Billboards Video Ad Networks Alternative Ambient At-Entertainment In-Entertainment Ambient Foot Traffic At-Retail In-Office Ambient Specialty At-Road In-Retail Ambient Transit At-Transit In-Theater In-Transit “Simply the best piece of research published in the last few years” DailyDOOH.com www.pqmedia.com 7
Global Digital OOH in Perspective Relative to Media, Advertising & Economic Trends
Advertising Represented 20% of $2.2 Trillion Global Media Spending Advertising has been the slowest growing media sector in the last five years and losing share Share of Global Media Spending by Sector Global Media CAGRs: 2004-2009 Institutional 5.9% 20% Advertising 26% Consumer 5.3% Marketing Services Total 4.1% Consumer End-User Marketing 3.5% 24% Institutional End-User Advertising 1.3% 30% 0% 2% 4% 6% Total = $2.24 Trillion (2009 Estimate) Source: PQ Media www.pqmedia.com 9
Advertising Is a Leading Indicator of Economic Cycles Because of secular changes, ad declines have become more severe during recent recessions Meanwhile, ad rebounds have struggled to keep pace with the economy Global Advertising vs. GDP Growth Rates: 1994 to 2009 15% 10% 5% 0% 1994 1999 2004 2009 -5% -10% -15% Recession Global GDP Global Advertising Sources: PQ Media, Zenith Optimedia, International Monetary Fund www.pqmedia.com 10
Secular Trends Driving Changes in Advertising Spend – Traditional media losing viewers, listeners and readers Netherlands - Annual Media Usage Per Year (Hours) Year Total TV RAD NSP MAG BKS FLM MUS VGM INT MBL 1995 2,409 1,095 689 236 116 69 15 155 12 22 0 2000 2,615 1,137 695 225 114 65 18 171 43 147 1 2005 2,665 1,139 708 194 105 61 26 101 45 258 28 2010 2,700 1,145 717 167 100 59 24 59 60 304 65 Source: PQ Media – Youth market media usage habits differ from older demographics – Individuals spend more time outside the home – Technology enables consumers to access media all day in all locations – Consumer media multi-tasking means less engagement with content – Ad-skipping technology negatively impacts ad engagement – It’s the economy – brands seek lower CPMs than traditional media – Advertisers have many more advertising and marketing choices – Alternative media becoming easier to buy and offering scale – Providers giving brands/agencies better metrics www.pqmedia.com 11
Global OOH Media within the Advertising Market Out of home media is estimated to be the 3 rd smallest of nine ad media Conversely, OOH is projected to be ranked 3 rd highest in growth rate 2009E Share 2009E Growth Rates 10% TV 29.3% NSP 21.9% 4.0% -8.0% Digital* 13.7% -9.9% -5.1% -9.6% -11.3% -15.2% -17.3% -16.5% 0% Mags 6.6% YPG 6.6% Radio 6.5% -10% OOH 6.4% Cable 5.3% $454 Billion -20% B2B 4.0% (2009E) Digital* Cable OOH YPG TV Radio B2B Mags NSP 0% 5% 10% 15% 20% 25% 30% *Internet, mobile, videogames, home video, and online ads at entertainment company websites Source: PQ Media www.pqmedia.com 12
Impact of Recession on Top Ad Markets & OOH in 2009 Only three countries registered positive ad growth in 2009 – China, India, & Brazil Out-of-Home growth declined in all but two countries – China & India 2009E Growth Rates 10% Americas EMEA A/PAC 0% -10% -20% GDP Advertising OOH -30% US Brazil Mexico UK Germany Italy Spain Netherlands Russia Japan China Korea Australia India Global Canada France Sources: PQ Media, Zenith Optimedia, Magna Global, WARC. PricewaterhouseCoopers, International Monetary Fund www.pqmedia.com 13
Digital Out-of-Home Transforming Global OOH Industry While OOH slightly outperformed the global economy in the 1990s, digital OOH has driven the out-of-home media market during this decade Global DOOH vs. GDP Growth Rates: 1997 to 2009 15% 10% 5% 0% 1997 1999 2001 2003 2005 2007 2009 -5% -10% Recession Global GDP Global OOH Sources: PQ Media, Zenith Optimedia, International Monetary Fund www.pqmedia.com 14
Global Digital Out-of-Home Media in 2009
DOOH Shake Out – Days of Double-Digit Growth End Global DOOH continued to outperform overall ad industry in 2009, rising 4.7% in 2009 Global DOOH reached $6.69 billion, which represents only 1.5% of the overall ad market 2009 Growth Rates 2004-2009 Spending ($ Billions) $8 Digital OOH 4.7% $6.69 $6 Nominal GDP -1.1% $4 $3.16 -10.4% Advertising $2 -11.2% Traditional OOH $0 2004 2005 2006 2007 2008 2009 -15% -10% -5% 0% 5% Sources: PQ Media Global Digital Out of Home Forecast 2009-2014, Zenith Optimedia, MagnaGlobal, WARC, PricewaterhouseCoopers www.pqmedia.com 16
Despite Deceleration Global DOOH Share Rose 10 Pts in 5 Years % Share % Share Digital OOH Digital OOH 13% 23% Traditional OOH Traditional OOH 77% 87% $24.64 Billion $28.88 Billion (2004) (2009) Sources: PQ Media Global Digital Out of Home Forecast 2009-2014 , ZenithOptimedia, MagnaGlobal, WARC, PricewaterhouseCoopers www.pqmedia.com 17
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