The advertising market has seen a number of dramatic changes in a relatively short period of time. In addition to society's shift towards digitization, consumer behavior and trends have also radically changed, catapulting the out-of-home (OOH) advertising market forward with powerful technology, valuable analytics and real-time updates.
According to a recent global survey commissioned by ALFI (an AI enterprise SaaS advertising platform), digital out-of-home (DOOH) ad spend is projected to account for more than a third of the total OOH ad market by 2025.
The research shows that the global DOOH market, which was estimated to be USD 18.8 billion in 2020, is expected to reach a revised size of USD 35.1 billion by 2027, growing at a CAGR of 9.3% during the analysis period 2020-2027.
Why are advertisers investing so heavily in digital out-of-home solutions? Because DOOH offers scalable options for delivering the right content to the right audience at the right time.
Before we dive into the research results, let's discuss why DOOH advertising is so popular.
Digital OOH advertising: fast, effective and affordable
As third-party cookies are on the decline and major tech companies radically modify the way they track consumer activity, companies that rely heavily on programmatic marketing tactics are looking for alternatives to target audiences and track behavior.
Digital OOH combines the best parts of traditional out-of-home advertising with cutting-edge technology that enables better real-time targeting with more accurate reporting and analytics.
While both channels are effective marketing tools, digital out-of-home advertising has an advantage over traditional out-of-home advertising in its flexibility, affordability, and insight into valuable consumer behaviors. With the scalable components of each, OOH and DOOH can be combined for even more powerful solutions for brands.
How successful are OOH and DOOH advertising?
According to the OAAA, OOH advertising revenue increased 38% year-over-year to $2 billion in the second quarter of 2021. Digital OOH is leading the overall OOH recovery and the segment jumped nearly 80% compared to Q2 2020.
The main advantages of DOOH advertising are cited as "greater variety" and "greater opportunity for campaign relevance".
DOOH ad spend is projected to account for more than one-third of the OOH ad market by 2025
Whatever the future of advertising holds, it is clear that it will be digital. A recent global research study from ALFI revealed that 50% of global senior advertising executives believe ad spend will increase by 28.3% to 33% by 2025. 30% think ad spend will account for 33% to 35% of the overall market share, while 18% believe it will exceed those numbers by 2025.
According to ALFI CEO P. Pereira, DOOH advertising is one of the fastest growing and most dynamic trends in the advertising sector and will only intensify in the coming months and years. Its ability to deliver high-impact and tailored campaigns with comprehensive and detailed reporting means that more and more advertising executives are looking to use it in their strategies and programmes.
As more and more advertisers look for ways to find the right person at the right time with the right message, OOH technologies and solutions for enhanced tracking, retargeting, personalization and campaign measurement are heralded as priority solutions.
In fact, interest in the DOOH ad market has already surpassed previously forecasted growth, with 81% of ad executives surveyed predicting it will increase to $50 billion to $60 billion instead of the reported $41.06 billion in 2020.
Why such a sudden growth beyond previous data?
DOOH offers advertisers a number of valuable benefits that are likely to grow in importance. When surveyed about the key benefits of DOOH, the majority of advertising executives surveyed cited greater variety (56%), greater campaign relevance options (53%), and providing fewer restrictions (51%).
This survey was conducted in June 2021, when ALFI commissioned global market research company PureProfile to conduct 100 interviews among senior advertising professionals working in the digital advertising industry. These interviews were divided into five markets: the United States, the United Kingdom, France, Germany and Asia.
The combination of DOOH and powerful technology creates limitless possibilities for advertisers and brands. As people travel the world again in large numbers, more and more interactions are taking place outside the home on a daily basis and brands have more opportunities to connect with their target audiences.
What do these results mean for advertisers?
In the wake of the demise of cookies and the questionable use of third-party data, enhanced web privacy features, and ad blindness, brands need better ways to connect with target audiences.
Advertisers are demanding more and more from advertising technologies, which are using higher performance and better options. With powerful visual and technical capabilities, DOOH is changing the way advertising is done: beyond simply skipping, blocking or clicking a mouse, DOOH invites viewers to participate, offers them more personalized, updated and relevant content, and delivers valuable insights into consumer behavior.
Plus, adding DOOH to your online and mobile campaigns gives you the opportunity to engage consumers throughout the day and create a long-lasting brand experience. The data-rich reporting feature informs advertisers when someone viewed their ad, how many times it was viewed, and how viewers reacted to the content.
Good to remember /summary:
Spending to DOOH by advertisers will rise. As early as 2025, DOOH is expected to account for more than 30% of the OOH advertising market. The primary benefits of DOOH, according to global marketers, are greater variety and more opportunity for campaign relevance. With its powerful visual and technical capabilities, DOOH is changing the way advertising is done: DOOH invites viewers to participate, offers them more personalized, updated and relevant content, and delivers valuable insights into consumer behavior that can be highly actionable in conceptual marketing going forward.
Source: https://www.getalfi.com/advertising/dooh-advertising-spend-growth-increase-2025/Back to blog