Shopping malls, as well as transportation (roadside, airports and train stations) are the Digital Out-of-Home verticals that have achieved major scale in Europe, Dirk Huelsermann, president of OVAB Europe, and manager of VUKUNET NEC Display Solutions, Europe, told attendees at the Digital Signage Investment Conference in New York last week.
Huelsermann followed up his talk at the 2011 conference with an update during which he mentioned that the moniker Digital Place-based media means nothing in Europe.
He also stressed that the lack of one name for the DOOH sector is “still confusing the world, including agencies. Don’t mess around. Establish DOOH as a global category.”
DOOH is complementary to TV in Europe, he said. Originally European companies positioned DOOH against TV. TV was a highly discounted media and consequently, DOOH lost market share.
“Doctors’ offices have a very captive audience but don’t reach scale,” said Huelsermann. “Neither do food retailers – a sector that needs massive investment to reach scale. It’s a sector that’s cannibalizing other media and traditional media budgets. Other verticals may have high dwell time and a valuable target audience but also don’t reach scale.”
And, showing a photo of one of the newer screen placements, he said “As for screens at urinals, brands are not interested in seeing themselves in front of the loo, despite the spatter-proof screens.”
As the audience expected to hear, the European market was hit hard by the Euro crisis. Only Germany had solid growth. The U.K. is in a deep recession. But advertising spending has been rather stable. That of Germany was up 2.7%; the U.K. 3.4%; France 0.9% – but Spain was down -12%.
Huelsermann said that five big media owners in Germany dominate the market. The growth of smaller media owners is slower, offering a good opportunity for venture capitalists.
“Significan mergers have given this market enormous drive,” he said. “Solid double digit growth is forecast.”
He said that there wasn’t an Olympic effect in the U.K. because of over-supply. There’s a lesson here: don’t increase prices before a major event.
“And while the big outdoor companies dominate, there are other smaller companies doing incredible stuff in their niche.”
An interesting fact, with the highly fragmented Spanish market hit by the Euro crisis, is that some Spanish companies are moving out of the home market to South America – which is also the place in students’ plans. However, Huelsermann said, clever companies are investing to be ready for better times.
He also said that, to gain momentum, innovation in terms of such things as facial recognition, open standards, etc., must be adopted more quickly in the European market.
“You people are on the cusp of something big,” Huelsermann said. “Europe is a great place. Invest now.”