COVID-19 has reduced OOH audiences by 50%: Ooh Media
Out-of home giant Ooh Media has revealed COVID-19 restrictions have reduced the daily audience of OOH advertisements by over 50% locally and across the globe.
It signalled, however, that it believes the bounce back will be swift, once government policies change.
Ooh Media’s calendar year has been challenged
The outdoor company noted bookings for this quarter (April to June) have largely been moved to later in the calendar year, and there were limited new advertiser actions in April, with the exception of government campaigns.
The government is still relying on outdoor to spread its COVID-19 message
In more optimistic news, however, Ooh Media said advertisers were beginning to evolve from their “stop approach” which tarnished the early stages of the local COVID-19 outbreak, and are now moving towards planning for future activity in May and June.
In its presentation at the Macquarie Australia Conference yesterday, Ooh Media noted it was now expecting in excess of $20m in savings from its fixed rent expenses, up from the $10m to $15m outlined in late March.
In addition, it’s on track to deliver at the upper-end of the spectrum on its anticipated $10m to $15m in operating expenditure savings. It noted discretionary spending has been suspended, and staff have agreed to a 20% reduction in hours and pay for the quarter.
“Job Keeper will deliver a further circa $7m per quarter for which the business qualifies, which is over and above the savings range outlined at 26 March,” the company’s presentation said, noting 800 of its Australian staff are eligible for the government payment.
Despite the difficulties, Ooh Media also cited the PwC Australian Entertainment and Media Outlook report from June 2019, which predicted the out-of-home advertising market would grow from $1.357bn in 2019, to $1.475bn in 2020, and $1.598bn in 2022.
The outdoor media industry’s advocacy body, the OMA, recently noted the sector’s struggles, but stressed there is hope if businesses look further into the future.
“In the short-term, we are feeling the impact of marketing budgets put on hold, and we know that short-term performance goals will not be reached,” CEO Charmaine Moldrich said. “But there is hope. By now you would have read the articles proclaiming that China’s ad market is rebounding, and no doubt you are looking for tips on how to get there faster – as in, right now.”
She said even in the changed and locked-down world, out-of-home is part of everyday life.
“Maintaining a sense of normalcy for people when they are out and about is as important now as ever before. Outdoor advertising is part of our cityscapes, and our lives. While travel has changed, people are still out and about, including those people working on the frontlines of fighting COVID.”
She encouraged advertisers to step up.
“Now is not the time to look for superficial wins and bargain basement media. Now is the time to build demands and brands. Now is the time for leaders to step up. It is in this moment of crisis that we need to act in all our best interest so that we can get through this in one piece together.”
Is that right? Only 50%?
I don’t think it’s true that 50% of Aussies are still moving about and seeing billboards as before. Much fewer.
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When you consider that oOh! has assets in retail centres as well as live roadside panels, 50% actually seems conservative. People are making on average +20% more trips in their local area and spend in retail is still up, versus what is was pre-COVID. People are leaving the house to shop for essential items twice a week, with 10% leaving the house once a day – it’s pretty much the best reason people have to be out of home at the moment. They are also leaving to go for walks/runs/bike rides at which time they would see both live roadside panels and billboards.
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I know this could be a wild guess, but I suspect that Ooh media have data sources which led to their “over 50%” number.
I also suspect that your response is based on opinion. Everyone can have an opinion. Not everyone has the data access to have an informed opinion. (And no, I also have no data to help with an informed opinion.)
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