[April 23, 2012]

PQ Media Forecast: Global Digital Out-of-Home Ad Revenue Grew 15% to $7 Billion in 2011 & On Pace to Accelerate 19% in 2012, Driven by Economic Recovery, Brands Using Newer Video Formats & Faster Growth in Major Markets

Global digital out-of-home media (DOOH) revenues generated by digital place-based networks, billboards and signage operators, grew 15.3% to $6.97 billion in 2011 and are projected to expand 19.2% in 2012, according to new data released today by PQ Media (www.pqmedia.com), the leading provider of econometric research and consulting to the media, entertainment and communications industries. US DOOH operator revenue increased 11.2% in 2011, driven primarily by double-digit growth among digital billboard operators, while digital place-based networks grew at a high single-digit rate for the year. Overall, the global DOOH industry expanded at a compound annual growth rate (CAGR) of 13.7% in the 2006-11 period, according to the PQ Media Global Digital Out-of-Home Media Forecast 2012-16.

Today's release of the 5th edition in PQ Media's Global Digital Out-of-Home Media Forecast series - the industry's worldwide benchmark for revenue, growth, trends, analysis and insights - provides the most in-depth data, perspective and forecasts covering all four major global regions and 28 leading markets for the 2006-16 period. PQ Media defines the global DOOH industry by two major platforms - digital place-based networks (DPNs) and digital billboards & signage (DBBs) - and six venue and location categories, including cinema, retail, office, entertainment, transit and roadside. PQ Media's Forecast includes over 250 pages of data and analysis, as well as more than 100 charts and tables, which include input from several hundred members of the company's exclusive Global Opinion Leader Panel™ of network operators, agencies, trade associations, advertisers and financiers.

As part of its research methodology, PQ Media in 2012 forged a number of relationships with key industry stakeholders globally to share data in order to ensure the most credible DOOH information available. For example, PQ Media developed a data-sharing relationship with the Digital Place-based Advertising Association (DPAA), the leading trade organization representing DPNs in the US, which not only strengthens the industry's revenue and growth data, but also provides a consistent data source for strategic planning.

Global DPN revenues grew 11.8% to $5.09 billion in 2011, driven by double-digit growth in the Asia-Pacific region - the largest and fastest growing region - fueled by the Chinese market, which isthe region's biggest and strongest growing market, PQ Media estimates. Global DBB revenues increased 26% to $1.88 billion, fueled by positive measurement, regulation and agency perception trends in most of the leading markets in the four major regions. China's overall DOOH revenues surged 39.2% in 2011 to $1.44 billion.

The US is the largest overall DOOH market worldwide among the 28 leading countries tracked by PQ Media, generating $2.05 billion in 2011, followed by China and Japan. The UK DOOH market, the largest in Europe, generated $549 million in 2011, up 11.3% due to the activation of new ad locations and digitization of older sites in preparation for the London Summer Olympics. Brazil's DOOH market grew 38% to $155 million in 2011, the fifth consecutive year of double-digit growth for this market, PQ Media estimates.

In the US, DPNs remained one of the fastest-growing ad-based media in 2011, although growth decelerated sharply from 2010 due to cyclical events that negatively impacted the media business in the second half. After a 15.3% expansion in 2010, revenue growth decelerated to 7.5% in 2011, due to a substantial slowdown in the cinema category. Total US DPN revenues increased at a CAGR of 10.7% from 2006 to 2011, reaching $1.41 billion, fueled by double-digit gains in the corporate & healthcare, entertainment & education, and transit venues, according to the PQ Media Global Digital Out-of-Home Media Forecast 2012-16.

While 2011 began strong for DPNs in the US, a record broadcast and cable TV upfront and the sudden change in sentiment regarding an economic recovery triggered a decline in national scatter ad spend in the second half, as ad budgets tightened in the fourth quarter. Excluding cinema, however, the deceleration in overall DPN growth was much less severe in 2011, as combined operator revenue in the other four venue categories increased 13.2% to $736 million. US DBB revenues, meanwhile, increased 20.3% to $638 million in 2011 and posted a 24.1% CAGR in the 2006-11 period, fueled by accelerated rollouts of roadside DBBs which produce higher and higher-margin revenue than static billboards, according to PQ Media.

"While TV remains the 800-pound gorilla of ad-based media due to its reach, scarcity and measurement, DPNs offer brands opportunities to extend their reach by engaging target consumers with contextually relevant content in venues outside the home," said Patrick Quinn, CEO of PQ Media. "Despite the growth deceleration in 2011, we believe 2012 has the potential to be a watershed year for DPNs, particularly in the second half, as there appears to be a good chance for network operators to differentiate from other emerging media and prove their value as part of integrated media solutions."

Quinn added that economic and advertising indicators in the first quarter of 2012 are comparatively encouraging and that PQ Media is forecasting a relatively slow, but stable economic recovery becoming more noticeable in the second half. Concurrently, TV's inventory scarcity will become more apparent, as a record increase in political and Olympics ad spend in the second half may squeeze some brands out of the medium, which could force them to consider investing in other high-quality video platforms, such as DPNs.

Global DOOH revenues are expected to increase 19.2% in 2012 to $8.3 billion, as operators expand into new venues and markets, install DBBs in more locations, and incorporate enhanced and interactive features. Global DOOH revenues will expand at a 21.3% CAGR in the 2011-16 period. US DOOH revenues are expected to grow 12.5% to $2.3 billion in 2012, and post a 12.5% CAGR in the forecast period, according to the PQ Media Global Digital Out-of-Home Media Forecast 2012-16. US DPN revenues are projected to increase at an accelerated 10.5% in 2012 to $1.55 billion, driven by stronger audience metrics, more industry consolidation, greater network scale, and leading operators promoting the medium as a valuable component of multimedia ad solutions.

About PQ Media

PQ Media (www.pqmedia.com) is the leading provider of econometric research and consulting services to the media, entertainment and communications industries. PQ Media's proprietary research methodology delivers actionable strategic intelligence to media companies, financiers, agencies, brands and consultants. PQ Media partners with private equity firm Veronis Suhler Stevenson on the VSS Communications Industry Forecast, the US industry's benchmark for spending, usage and growth data for 25 years. For more information, contact Gabriella Kallay at gkallay@pqmedia.com or 203-921-0368.

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