Features

Ooh Media’s Cathy O’Connor reveals why advertisers are approaching lockdowns differently in 2021

Amid the ongoing recovery of the outdoor industry, in spite of more lockdowns, Zanda Wilson speaks with Ooh Media CEO Cathy O'Connor about the company's financial results, and why ad spend is being deferred rather than cancelled.

Ooh Media posted impressive revenue numbers this week, with half-year results showing the out-of-home provider had a 23% year-on-year increase to $251.6 million.

Though profits were down $3.9 million, revenue growth and a 209% increase in EBITDA to $33.3 million, as well as reduced debt, has CEO Cathy O’Connor in good spirits despite the current COVID lockdowns in several states.

O’Connor points to an improving outdoor sector off-the-back of more positivity from advertisers throughout the first half. “Our performance is largely in line with the sector,” she tells Mumbrella.

“The sector grew about 22% to June. And so our revenue uplift of 23% is pretty much par for the course. So we’ve held our share of the market, which has recovered nicely.”

Ooh Media’s recovery was in line with the outdoor industry

In 2020 the outdoor sector suffered badly, but O’Connor reveals that during the lockdowns in 2021 so far, advertisers are showing more of a penchant to delay or defer spend, as opposed to the big cancellations seen last year.

“I think we’re generally dealing with more positive energy and outlook from advertisers in 2021, unlike 2020 when there were so many questions. There’s more clarity around the impact of lockdowns, the effectiveness of vaccinations and all of those things, just playing to increasing confidence that there’ll be a point in time where a new sense of normality ensues.

“We are still dealing with external factors that we don’t have control over, so our role is to ensure that we are working with customers to encourage them to follow the audiences where they are.

“That’s a very important point about Ooh Media because we’ve got so many diverse formats. If there are fewer people in airports and office towers, we can follow them to suburban areas with roads and street furniture.

“So it’s about continual education and stimulating the conversations. One of the great things about the current conversations we’re having with advertisers is they all seem to be about deferring spend. We’re not seeing that wholesale negative cancellation that we saw in 2020.”

Advertiser confidence remains high despite there still not being anything resembling a hard re-open date for the likes of NSW and Victoria, but O’Connor says brands are looking at overseas markets to see what’s possible once enough of the population is vaccinated.

“There is now a global precedent about a way out. So there are a lot of common sense factors at play where people can see that the vaccines are being effective and that gives people hope.

‘I also think advertisers understand that they are operating in competitive sectors, and 15 months of standing still they can bring risk to their own business, in the long term.

“There is a continual need to think about the other side of COVID, the recovery for their brand, their visibility, their share of voice. So I think people are very keen to come out of the starting blocks in the best possible position to be able to reap the rewards of recovery, and that’s what Ooh Media is doing by focussing on rate management and yield.”

Outdoor media saw a quick recovery following lockdowns being lifted, and O’Connor sees no reason why the same thing won’t happen after the current round of lockdowns come to an end.

“Out business is competitive, out-of-home offers a long dwell, 100% share of voice, in classic environment or the more adaptive digital environment. It offers mass reach and high effectiveness at a reasonably cheap cost.

“So I think [we are] well-positioned for the recovery phase after the removal of short-term lockdowns. We’ve seen that revenue lines respond almost instantly to an easing of restrictions, which is great for us.”

Road has been Ooh Media’s best-performing segment

The ‘road’ segment was one of Ooh Media’s strongest performing sectors in the half, with a 44% lift in revenue to $78.6 million. It was even up 16% on H1 of 2019.

However, the impact of the current lockdowns in NSW and Victoria weren’t felt in the half-year report, and O’Connor admits that there’ll be “marginal downward pressure on road audiences” but says that she expects the segment to remain resilient despite lockdowns.

“If you look back over the sort of 15 months of the pandemic, the road audiences have been remarkably resilient. So I think you’ll find they’ll continue to be the largest audiences. That goes to street furniture and retail as well. That’s why they are really leading the revenue recovery in our business.”

Ooh Media’s half-year report suggested that ongoing investment in digital assets will be a big priority for the rest of the year and as lockdowns come to an end. O’Connor reveals that this investment is not contingent on the lockdowns ending at any specific time.

“We are very committed to a pipeline of building new digital assets. The priorities are across those high-performing formats, so large format digital road in metro centres, and increasingly the most populated regional centres, are very much a part of our pipeline.

“We know that commute and street furniture assets have a lot of upside for digitisation. So we’re looking forward to doing that over the next year and a bit. The digitisation of our retail assets as well.

“Those things are not contingent on recovery [lockdowns ending]. Of course, 57-58% of our revenue is digital. So it’s really feeding the demand with great new assets and new environments for advertisers.”

O’Connor also committed to retaining the company’s current headcount throughout the year. JobSeeker is “fully washed-out of our future position,” she reveals.

“We are very committed to holding our headcount moving into the future. So the upside to the business won’t require new investment in people.

“Even though short-term lockdowns put downward pressure on some aspects of our customer base, we do need to make sure the business is well-positioned to capitalise on the return to growth as well.”

ADVERTISEMENT
Advertisement

Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.

 

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing.