By: M4G Bureau
Last updated : December 05, 2017 6:53 pm
The report predicts the outdoor revenue to touch $7.9bn
In 2018, the return of even-year cyclical advertising drivers (mid-tem elections, Winter Olympics, Soccer World Cup) will help accelerate ad growth to +4.8% (unchanged from previous forecast) despite a slowdown in underlying spending (+3.1% excl. P&O). Ad sales grew by +4.2% in the second quarter of 2017 (excl. P&O), accelerating from a modest first quarter (+3.2%) and MAGNA expects 3Q and 4Q to grow by approx. +3.5% yoy.
OOH ad sales were nearly flat in the first half (+1% including cinema, compared to an average +4% in the last five years). This sudden slowdown was caused by spending cuts in two key verticals, automotive and movie studios, as they are both affected by slow sales (car sales and box office declining by 2% each year-to-date). Looking at market segments, the first half showed static OOH ad sales being flat while digital OOH sales are still growing thanks to organic inventory expansion.
In terms of environment, Street Furniture and Transit generated revenue growth in the first half while Billboard and Shopping Malls stagnated. Meanwhile in-theater ad sales shrank by 12% due to poor cinema attendance. MAGNA expects the second half to get slightly stronger, resulting in full year OOH ad revenues to grow by +1.7% to $7.9bn.