DOOH among the fastest growing media in the world in 2009, amid sharp ad spend downturn and decline in traditional OOH, although sector experiences "shakeout" previously predicted in the US

Amid a sharp downturn in global advertising spending and a decline in traditional out-of-home advertising in 2009, digital out-of-home (DOOH) is among the fastest growing media in the world and will continue on an upward track in 2010, according to a new forecast from PQ Media.

Spending in the emerging media segment of DOOH is on pace to increase 2.0% to $2.47 billion (£1.5 billion) in the US in 2009, while DOOH expenditures worldwide will grow 4.7% to $6.69 billion (£4.1 billion), according to the third annual PQ Media Global Digital Out-of-Home Media Forecast 2009-2014. While the rate of growth in the US and globally decelerated for the second consecutive year, PQ Media forecasts that digital OOH will grow at a compound annual rate of 9.4% in the US through 2014 and 10.1% worldwide over the next five years.

In-depth global analysis

The PQ Media Global Digital Out-of-Home Media Forecast 2009-2014 provides exclusive, in-depth research by global regions, DOOH media platforms and venue categories, ad categories, share of national versus local ad spend, profiles of more than 650 digital OOH operators, and more.

The media intelligence firm said DOOH media, which includes video advertising networks (VANs), digital billboards and alternative ambient ads, is being adopted by brand marketers because they engage target consumers in captive locations for extended periods of time. Spending in each of these media platforms increased in 2009, while spending in all but one venue category grew as well - led by VANs in-theatre and roadside digital boards. Strong secular trends impacting the broader media economy have had a positive impact on the DOOH industry, as consumers spend more time outside their homes, commute longer to work, use ad-skipping technology and multitask with various media on the go throughout the day.

As the industry continues to emerge and become a larger part of advertising budgets, the report forecast it will struggle with a number of other trends that operators wrestled with throughout 2009. Among these are the lack of scale many operators are able to provide brands, increased competition from other new media; development of engaging, relevant content; measurement and a common currency, and several others. These challenges have led to a consolidation or "shakeout" phase, which the industry - particularly VANs - is going through in 2009 and will continue to endure in 2010, it said.

DOOH, "the next frontier"

"Our research indicates three distinct phases in the emergence of successful new media - gold rush, shakeout and breakout - and the digital out-of-home business, especially video networks, are in the second phase and will likely be well into 2010," said Patrick Quinn, president and chief executive of PQ Media. "This is actually a good thing as it will defragment the industry and create a landscape of strong operators offering better scale, more relevant content and cohesive metrics. This is, of course, if the industry can weather strong economic headwinds, technological shifts and changing consumer behaviours. But our research suggests that brands and investors see digital out-of-home as the next frontier in media, similar to the early days of radio, cable and the internet."

US spending on video ad networks, the largest segment, is on track to expand by 1.2% in 2009. Following a 17.2% compound annual growth rate from 2004-2009, PQ Media is forecasting a 5.7% growth rate in 2010. Digital billboards will remain the fastest-growing segment, posting growth of 9.1% for 2009 and a compound annual growth rate 31.4% during the 2004-2009 timeframe. Digital billboards are expected to grow by 13.2% in 2010.

India, China, Brazil and Canada lead the international growth markets. Eastern European and Middle Eastern countries were hurt by the credit crunch and falling oil prices and this will continue to affect them into 2009. Asia/Pacific will be the fastest growing region of global digital OOH, rising 10.7% in 2009 to $2.18 billion, an acceleration of the 8.8% gain in 2008, when that region already was stuck in a recession before most of the rest of the world.

A free executive summary, including table-of-contents, of the Global Digital Out-of-Home Media Forecast 2009-2014 is available for download at PQ Media Global Digital Out-of-Home Media Forecast 2009-2014.