1. More consolidation in the market. With the Kurnia acquisition, Media Prima's Big Tree and Kurnia will have a 42 per cent share of the billboard market. We are already hearing rumours about other players entering the market. These could be international players and other local conglomerates. Four to five major players could account for an 80 per cent to 90 per cent share of the billboard market in a few years time, as opposed to a fairly fragmented market now.
2. Other local media owners could choose to sell. The recent regulatory measures proposed by the local councils worried many vendors. This is evident from the difficulties they are experiencing in obtaining new site licenses. Sites are also being taken down by the local councils for various reasons ranging from the legality of the site to the sites being in unsuitable locations. The complexity in which the market is evolving may cause some owners to sell out to interested parties.
3. More integrated offerings in the market. Integration could occur within OOH or between OOH and other media. For example, Media Prima could bundle OOH together with TV and radio for a more holistic package. Redberry could offer sites at airports, hypermarkets, buses, billboards and digital signage, as well as print opportunities as a package to the bigger advertisers. If investments are sufficient from the advertiser, I predict media owners will see good ROI.
4. Emergence of non-billboard opportunities. The downturn has resulted in huge opportunities for hypermarkets, buses, trucks and digital opportunities across the board, to reach consumers with various touchpoints that complement billboards. The current spend in OOH is not more than five per cent of total advertising spend. Given the efficiency of OOH formats in terms of cost and their proprietary tools, OOH specialists are in a very good position to push the overall OOH offering for a bigger share of pie. Buying patterns are also moving toward the short term of one- to three-month buys, rather than buys for one year.
5. More regulated pricing. Formation of bigger companies will result in more regulated pricing as most companies would more or less work within similar financial constraints. The new levy imposed by some of the local councils will automatically result in higher prices. And with fewer smaller players, price undercutting could be drastically reduced. An increase in value to the media owner will ultimately result in more accountability, and owners may offer complimentary research.
2. Other local media owners could choose to sell. The recent regulatory measures proposed by the local councils worried many vendors. This is evident from the difficulties they are experiencing in obtaining new site licenses. Sites are also being taken down by the local councils for various reasons ranging from the legality of the site to the sites being in unsuitable locations. The complexity in which the market is evolving may cause some owners to sell out to interested parties.
3. More integrated offerings in the market. Integration could occur within OOH or between OOH and other media. For example, Media Prima could bundle OOH together with TV and radio for a more holistic package. Redberry could offer sites at airports, hypermarkets, buses, billboards and digital signage, as well as print opportunities as a package to the bigger advertisers. If investments are sufficient from the advertiser, I predict media owners will see good ROI.
4. Emergence of non-billboard opportunities. The downturn has resulted in huge opportunities for hypermarkets, buses, trucks and digital opportunities across the board, to reach consumers with various touchpoints that complement billboards. The current spend in OOH is not more than five per cent of total advertising spend. Given the efficiency of OOH formats in terms of cost and their proprietary tools, OOH specialists are in a very good position to push the overall OOH offering for a bigger share of pie. Buying patterns are also moving toward the short term of one- to three-month buys, rather than buys for one year.
5. More regulated pricing. Formation of bigger companies will result in more regulated pricing as most companies would more or less work within similar financial constraints. The new levy imposed by some of the local councils will automatically result in higher prices. And with fewer smaller players, price undercutting could be drastically reduced. An increase in value to the media owner will ultimately result in more accountability, and owners may offer complimentary research.
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