Bauer Media acquired Clear Channel Northern Europe with 16,000 displays and Ströer is testing the sale of its (D)ooH core business to financial investors. DooH has become extremely attractive for investors. What are the reasons behind this? An invidis commentary.
The advertising market is in a crisis: print has been losing massive reach for years, TV is weakening particularly among young target groups, and the hype around online, video, and social media is ebbing away – many media channels have simply become too expensive and ineffective. The glimmer of hope for the mass media has become DooH. But what makes DooH so attractive?
- Digital out-of-home screens – displays, projection and also LED – are trending. DooH screens are impossible to miss in public spaces and they enable advertisers to make a big impression with moving images in high-frequency environments.
- Hardly any channel is growing as quickly as DooH – more than 20% sales growth last year alone in Germany. After years of investment in network development, DooH screens now provide national coverage in major cities, offering a large amount of available advertising inventory. Not only can they be booked directly with higher margins, but also programmatically – enabling advertisers to develop campaigns that can be managed near real time. Delivered to individual screens at a defined time slot.
- Third-party data enables precise campaign planning, and the success factors of online and social media are now also taking effect in DooH. Additionally, DooH has moved past the initial “Wild West period” of programmatic advertising. Value creation, roles, providers, and business models are now becoming well-established.
- Last but not least, DooH is benefiting from the hype surrounding retail media – Amazon and Walmart generate tens of billions of USD in retail media sales annually and are causing fear in the market of being late to the game. (FOMO – Fear Of Missing Out). Even though more than 90% of retail media sales are currently generated online and not in-store, the margins on retail media are significantly higher for retail companies compared to their core business. Media owners and agencies also want a piece of the pie.
The outlook for DooH has probably never been better and strategic and financial investors now see a good time to get involved. The early days of the new year are likely just the beginning of an active M&A phase.