OOH the ‘standout’ in traditional media formats: oOh!media earnings favoured by investors
Cathy O’Connor, CEO of Australia’s biggest out-of-home player, is brimming with confidence. Following oOh!media’s well-received half-year results yesterday, O’Connor wants to talk about the digitisation of road-based formats.
Road-based formats are “fast becoming the most cost-efficient message alternative to free-to-air television”, O’Connor tells Mumbrella, and there are digitisation opportunities in retail and street furniture in places like the City of Adelaide and the City of Ryde.
Cathy O’Connor, CEO of oOh!media
“It’s obviously about all the new creative usage cases for out-of-home. And of course, we have a very strong sales team in market with a strong net promoter score, the highest in the industry.
“All those things mean oOh! is very well placed – to its scale, its reputation and its creativity – to take its share of a growing market.”
It’s a tough market, oOh!media posted a 40% market share for the second half of 2022 – flat at best. The group was still feeling the heat from competitor QMS and its City of Sydney offering launched in August last year, which O’Connor says accounted for 5% of the overall 11.9% sector growth that the Outdoor Media Association (OMA) posted.
But O’Connor is confident there’s plenty of growth to go around.
“The increasing appeal of out-of-home in a fragmenting marketplace is going to provide growth opportunities for all operators,” O’Connor says. “As the largest player in out-of-home, as the sector grows, we grow. And the reason for that growth is about digitisation.”
Industry analysts have responded positively to the earnings. Senior investment analyst at Wilson Asset Management, Shaun Weick, says the acceleration of oOh!media’s growth in the second quarter corrected some temporary share losses in the first.
At the same time, he says there’s also the persistent message that speaks to the health of the out-of-home medium.
“It’s demonstrated that ongoing structural shift, with TV really being the key format that continues to lose market share,” Weick says. “It’s [out-of-home] a standout across the traditional media formats really. You’re seeing spend on out-of-home to expand from 11.7% in 2022 to 14% in the first half of 2023.”
The company has done a good job around controlling costs, which will hold it steady in the second half, Weick adds. However, the biggest challenge will lie in how the economy and ad spend broadly evolve.
oOh!media’s share closed up 5% to $1.37 on Monday.
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Darcy Song was a reporter at Mumbrella, covering media owners, adtech and social platforms. She left in October 2023.
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