oOh!media Limited (oOh!) has announced its financial results for the half year ended 30 June 2023 (“1H23”), reporting an adjusted net profit of $20.5 million and double-digit revenue growth of Out-of-Home during the period.
Read more: oOh! reports adjusted net profit of $20.5 million in 1H23 results
Chief executive officer, Cathy O’Connor, spoke to Mediaweek to further elaborate on key themes and findings from oOh!’s financial results.
Market dominance and growth
The Out of Home (OOH) segment captured 14% of agency media spend in 1H23. Commenting on what factors are underpinning the market share growth of OOH, O’Connor said to Mediaweek: “It’s becoming a safe bet in audience terms, with increasing digitisation, and new ways for advertisers to experiment, and get ROI.
“We’re seeing a media market that’s increasingly fragmenting and, against that backdrop, OOH provides a mass reach alternative that is not subject to fragmentation.”
She expressed that against such a market which “has generally been a little tougher this year” OOH’s consideration in channel selection is in part rising because of natural attributes, stating, “it’s very cost-efficient, and an effective way to reach a mass audience quickly.”
O’Connor also highlighted other considerable growth factors: “New digital assets are bringing new growth. And things like programmatic and the ability to now target more specifically in OOH are all things that are recommending it to a new part of the market. It does no less of its traditional strengths in big impact branding, as well.”
New revenue opportunities and strategic partnerships
O’Connor confirmed to Mediaweek, “We announced three recent contract wins, which will all be bringing fully digital, new assets to the marketplace.”
The new contracts which include Sydney Metro, Sydney Metro Martin Place Station and Woollahra Council, represent approximately $30 million in annualised revenue, as mentioned in oOh!’s 1H23 results.
Referring to the alignment of the contracts with oOh!’s strategy for diversification and network expansion, O’Connor explained that “any CBD is incredibly important in our network,” and that the Woollahra contract is especially significant considering “there are very few opportunities to expand your network in the Eastern Suburbs of Sydney.”
O’Connor also stated that the contracts represent “some really appealing retail environments, as well.
“The new assets will bring a significant uptick in our digital capacity and our ability to deliver both commuter audiences and premium customers. Historically, digital assets provide higher profitability and revenue for our prime operators.”
Digital transformation and data capabilities
Outlined in the financial results, oOh! has refreshed its data feed by partnering with Unpacked by Flybuys and DataX from Westpac.
When asked to expand on how these investments are enhancing the effectiveness of oOh!’s ad solutions, O’Connor responded: “We’re doing these data partnerships to show the effect of OOH campaigns, not just in terms of brand uplift, but to prove results at the cash register.”
Pointing out how this is a strategy that oOh! has been building upon since 2018, O’Connor added: “There are very few [segments] that we won’t be able to get this level of granular data to, and effectively prove ROI.”
Competitive landscape and adaptation
oOh!’s Street Furniture and Rail segment experienced a revenue decline due to a major competitor’s expanded offering. Touching on how oOh! is addressing such challenges, O’Connor commented, “When that product was relaunched under a new operator, there was a significant increase in the number of digital assets that were offered.
“That has the impact of growing the market, and as an established player on the pitch, you will lose share to that. [But] it’s nothing more than what happens when assets are relaunched and digital capacity is increased.
“Ultimately: strong network, your benefit. Which is really where oOh! has now started to see that dynamic normalise and we feel we’ve got as many opportunities to be at the positive end of that shift with the new contracts coming through next year.”
Final thoughts
As a closing insight, O’Connor shared that “We are seeing an increasing breadth and depth in the categories that have recovered.
“Throughout the pandemic, it was very much read out food, grocery and alcohol; it drove the recovery in 2022. We’re now seeing all the staples of OOH: travel, automotive, domestic banks, all these things that have been traditionally our strongest categories are now recovering very strongly.
“It’s a broad-based movement towards OOH, and that’s a very positive sign for continued growth.”