20 Mar Latest Financial Results provide insights to the future of DOOH
Recently the Worlds No 1 Outdoor Advertising Agency posted revenues in excess of $A3 billion while two of the worlds largest DOOH Ad sales agencies, both China based, showed losses in excess of $A10 milion despite greatly increasing revenue.
French company JC Decaux which leads the world in the outdoor ad field saw its revenues grow 4.8% with one of the main drivers being the growth in Digital revenues. Altthough at the moment Digital still only represents 5% of total revenues.
As the graph below shows while the growth of Digital within J C Decaux is significant the numbers are relatively low – 9,800 screens – worldwide with forecasts to grow to 12,300 in 2012.
This contrasts greatly with the leading DOOH bus station ad sales agency in China – Vision Media, who increased turn over by 31.2% to $A181.2 million in 2011 but lost $10.4 million following losses of $A12.5 million in 2010.
The loss coming from a 53% increase in costs primarily from increasing overheads and marketing costs.
Vision Media managed a total of 137,423 screen in 2011
Air Media the number one agency in China’s airports also posted losses in 2010 and 2011. While revenues grew 17.5% to $A277.8 million the loss of $A15.7 million in 2011 followed the loss of $A11.2 mill.
Losses resulting from growing royalyfees paid to airport operators and fees paid to agencies.
In 2012 they plan to grown their indoor LED network having ordered $A33.3 mill worth of new screens.
Focus media China’s and the worlds largest DOOH agency has recently published their 2011 results. In summary they show great increases in revenue and profits form the previous year …in excess of 50%.
This shows the great growth opportunity in China and also the great benefit of a focus on DOOH in a broad sense. While figures presented by JC Decaux sow the enornmous growth potential given that only 5% of the income comes from DOOH…the remainder from traditional billboard advertising.
Given China now represents JC Decaux’s second biggest market in terms of growth and turnover most experts expect much more attention to this market in 2012. Also they are tipping JC Decaux will grown soon by acquisition with Clear Channel Outdoor, CBS Outdoor and Ocean Outdoor rumoured to be on their shopping list.