Alternative Out-of-home ad spending continues to grow

That's not news in and of itself, since OOH has been on a tear the past few years. But taking a look at this chart from eMarketer really gives an idea about the amount of money we're talking about now. Alternative OOH, which includes mostly digital media like in-venue digital signage and advertising networks, has seen better than 20% growth for the past four years, and better than 25% growth for the past two, and was worth almost $1.7 Billion in 2006. Granted that's still a teeny tiny piece of the overall advertising pie (worth over $150B), and sure it's only about 10% of total online ad spending from last year, but for a relatively new industry we're seeing the kind of growth needed to sustain early networks and encourage further experimentation in the space.

The funny thing about all this interest in digital advertising networks is that so far there are relatively few big success stories. Sure, companies like PRN, SignStorey and others have made lots of noise about getting their networks up and running, and it certainly took a lot of time, money and expertise to do so, but even counting these networks as 100% successful, that still leaves us with a grand total of two players. I know there are quite a few smaller networks around, say on the order of 10 - 50 screens, and I do think that local advertisers are still the ideal target for most OOH networks, but that's definitely one part of our industry that continues to seem unduly hyped.

So what's going to fuel digital signage growth over the next few years? What's going to keep us in the high-twentysomethings for CAGR? Ad networks continue to attract venture capital dollars, and one of these days, somebody is going to find that magic formula for building a really successful, homogeneous, non venue-specific OOH signage network, so there's certainly the possibility that enough of these guys will continue to coast on equity dollars until they figure it out. But until then, it seems like new projects in chain store retail, transit, health care and hospitality spaces will continue to lead the way with more understandable and vetted business models.

Tags: OOH advertising, digital signage, retail media