The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

Kinetic Worldwide November 2012

Contents

1 2 4 7 11 19 21 23

Introduction Changing issues affecting Out of Home Digital OOH developments Market projections and revenue Innovation, technology and the consumer Commercial challenges Conclusions About Kinetic Worldwide

Introduction

Out of Home in the UK continues to ride effectively with the changing time affecting the global media landscape, having adapted to and assimilated characteristics that now define consumer interactions with communication channels, including quality, technology, creativity and social media demands. Significant media owner investment and genuine attempts to be more accountable, measureable and flexible must continue to meet advertiser challenges. At the same time, the industry must assess and deliver its digital, interactive and activation credentials in a way that not only drives relevance to consumer behaviour, but real impact on the changing consumer buying process. Kinetics Future of Out of Home project focuses on how change can be clearly and successfully implemented by the industry, but also outlines how client, consumer and commercial needs will test the resolve and the creativity of the industry as it adapts to change. We also seek to give real insight into the numbers and applications that will shape the industry to 2020. Our research began in January 2011 by conducting several interviews across the industry with investors, consultants, media owners, media agencies, creative agencies, manufacturers and our own experts, concerning what faces the industry over the next ten years. Alongside this, we also conducted consumer research into expectation, technology take-up and the perception of an industry in the process of change. The findings delivered a number of themes, spanning the commercial, developmental and technological aspects of Out of Home. These were consolidated into a report and an event. There was some real consistency of perspective from across the industry; but there was also much debate and some conflicting expectation. In 2012, we have updated our expectation, insight and forecasts. We have conducted further consumer research into expectation of change and monitored the last years industry developments to reshape our expectation of the future. The road to 2020 will be one that seizes on the considerable change and initiatives already underway. Our view is that we are now beyond the threshold of change and embracing technology change that will both augment the Out of Home industry as we know it and take us into the realms of technology and consumer change that will redefine all traditional media in the coming years. Kinetic Worldwide, November 2012
The Future of Out of Home Media in the UK
November 2012 update

Changing issues affecting Out of Home

Kinetic has road-mapped the landscape of Out of Home until 2020. This reflects a growing appetite for digital roadside emerging through a combination of declining capex costs and the variety of media owners offering spectacular and landmark digital sites in new locations, as well as some latent potential for digital 6 sheets with interactive potential, whether touch or smartphone-based. Allied to this is the longer term potential for UK regional growth, which were now realising, and the potential for growth into environments where consumers are not only spending more of their time, but also looking to interact with their technologies and manage their lives working, social, leisure and retail accordingly. The changing consumer landscape of Out of Home has never been more impactful on the world of Out of Home communication as technology plays a greater role in how we behave when shopping, travelling and in our leisure and urban activities. The launch of Postar will further inform how peoples movements impact upon panel visibility, but crucially from an audience perspective, thereby identifying for the first time for the Out of Home industry, how different audience groups are available to consume media across different environments and locations. Whilst the London Olympics gave Out of Home an important shot in the arm in 2012, it also came at a time when significant change is affecting the UK industry, through digital OOH investment and a greater use of interactivity to amplify campaigns. Media owners showed they were prepared to go the extra mile, and many did, whilst local authorities recognised that sponsor funding is crucial in delivering large scale events and showed flexibility in planning regulation and access. The number of dominations and spectacular use of roadside, rail and other environments showed that Out of Home can be used as an effective brand communicator. The industry is currently characterised in clear terms around the connected, mobile and urban audience. This places Out of Home genuinely at the heart of change in terms of consumer behaviour in respect of purchasing, activation of content and the use of technology.

Digital OOH has continued to grow strongly throughout 2012, continuing its impressive performance within Out of Home as it embraces both technology and the consumer propensity for interaction and activation. Our growth rate estimates for the digital OOH sector remain bullish and we have increased our projections for the proportion of all Out of Home spend to 28% in 2020 up 5% on our consideration last year, which demonstrates the significant growth we are seeing in the sector. Consumers are highly disposed to activate campaigns that combine direct target audience relevance, dynamic content and a strong call to action. Our research demonstrates there is a high propensity for both touch and smartphone interaction and the number of brands activating consumers engagement in an Out of Home context is improving each year and includes the likes of Nike, Microsoft and Lloyds in 2012. Despite this, we await educational and penetration advancements in technologies like NFC, but there is considerable potential for activation campaigns to impact the industry to 2020. Postar, further technology developments, sustained and continued media owner investment and a more flexible use of digital OOH will all play their part in a healthy future for the industry, driving client engagement and campaign effectiveness.

The Future of Out of Home Media in the UK

November 2012 update

Digital OOH developments

Kinetic estimates that digital OOH revenue will hit 183m in 2012, representing 19% of all Out of Home and an annual growth rate of 32%, impressive for any media format in 2012. The demand for digital locations is not abating and we are seeing development across all Out of Home environments. In London, the market is close to maturity, though an area seeing considerable expansion is roadside opportunities in the key regional cities. Kinetic expects this area to grow rapidly within the next year and this is where, in our opinion, the market has room for expansion, plus the chance to increase digital share. Mall and rail have been key areas of investment in recent years. New installations at the recently modernised Kings Cross station in London, the digitisation of the Eurostar terminals at St. Pancras, and the forthcoming digital opportunity at Waterloo have been welcome developments, as is the continued expansion of the D6s format across stations nationwide.

Low level growth of large format, iconic sites is also expected, with media owners such as Ocean, Outdoor Plus and JCDecaux already widening their distribution across London, and others (including Ocean, MediaCo and Signature) hoping to fill gaps in major regional cities across the country. Another interesting development is Primesights introduction of a national network of digital screens in cinemas, all with interactive technologies, including mobile, touch and gesture-based technologies permanently installed. We also expect JCDecaux, Clear Channel, CBS and others to substantially increase the interactive functionality of their small format, mall and transport networks. Consumer perspective As consumers, we see digital OOH screens as enhancements to our surroundings; they are likely to both catch our attention and stimulate us. Two thirds say motion in digital screens is more likely to catch my attention, half that brighten up otherwise dull environments. 60% agree digital OOH screens could be beneficial anywhere where people have to wait for a service. This presents a continued positive impact of digital OOH screens on their environments. They make public transport environments and shopping malls more interesting and attractive places to spend time. We also have high expectation about a digital future in the Out of Home environment. Two thirds expect to see digital screens in most city centres in the future and 40% believe interacting with digital OOH is a great way to pass the time whilst travelling and a similar number think it would be great to access the Internet via digital screens out of the home. Location should continue to play an import role in digital OOH; over half would be more likely to react to digital ads communicating a special offer that is immediately available in a retailer close by.

60%

agree digital OOH screens could be beneficial anywhere where people have to wait for a service

40%

believe interacting with digital OOH a great way to pass the time whilst travelling

The Future of Out of Home Media in the UK

November 2012 update

The positive impact on brands is likely to come through proximity purchasing, as well as a halo effect. 44% think more favourably about brands that offer something relevant to their location. As consumers we are quickly embracing a more technology-led version of our future and expectations continue to change as we anticipate a much more exciting and different future. A third expect, in the future, that digital screens will show them ads directly targeting them relevant to that individual and what theyre doing. A quarter expect to be able to interact with most advertising wherever they see it and even buy a product or service via a digital OOH screen. As for Minority Report expectations, a third believe that, in the future, some digital screens will recognise who they are almost doubling expectations since February 2011. Already, gender recognition technology is being trialled and used by Ocean, Clear Channel and others and the opportunity for greater data-led insight initiatives around real delivery in Out of Home is very much on the rise.

The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

Market projections and revenue

The global economy and other macro-related factors have certainly inhibited the growth of Out of Home in recent years. However, technology, digital and the 2012 Olympics have given their own revenue boosts to the medium of late and it is some of these factors that will provide the foundation for Out of Home growth towards 2020. We predict continuous growth in digital revenues through the short to medium term and an acceleration in revenues towards the end of the decade with Digital OOH becoming a 200m medium in 2014. We expect total Out of Home media spend to break the 1 billion mark in 2015, with digital OOHs share of income rising rapidly in the latter half of the decade to reach 28% by 2020, conceivably before. This particularly reflects a likely proliferation of digital roadside 6 sheets and bus shelter sites. Our analysis also reflects the inevitable time-lag between planning, actual deployment of technology and the growth of complementary technologies that could enhance revenue-generation. Certainly, the activities of media owners and their investment and technology-based initiatives are a key driver for such growth. We expect digital technology to have a significant positive impact on the status of Out of Home media in the years to 2020 and for technology and media interactivity (of many types) to significantly reshape the nature of Out of Home in that time.

All Out of Home revenue 2004-2020

1200 1100 1000 900 800 700 2004 2008 2012 2016 2020

Digital OOH as % of all Out of Home 2004-2020

30 24 18 12 6 0 2004 2008 2012 2016 2020

Digital OOH revenue 2004-2020

350 280 210 140 70 0 2004 2008 2012 2016 2020

The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

Multiple formats

Number of standard sites Format Roadside 96s Roadside 48s Premium/Iconic Roadside/bus shelter 6s Retail mall Retail other (inc POS) Airport London Underground Rail Other transport Taxis Bus TOTAL

2012 2,715 20,771 1,598 71,411 4,079 1,273,588 2,673 118,546 10,035 2,400 6,500 18,810 1,533,126

2015 2,200 21,500 1,650 71,900 3,800 1,300,000 2,500 118,000 10,220 2,400 6,750 19,100 1,560,020

% change vs 2012 -19.0 3.5 3.3 0.7 -6.8 2.1 -6.5 -0.5 1.8 0.0 3.8 1.5 1.8

2020 2,000 21,800 1,800 65,000 3,200 1,330,000 2,350 117,700 10,630 2,400 7,500 19,500 1,583,880

% change vs 2012 -26.3 5.0 12.6 -9.0 -21.5 4.4 -12.1 -0.7 5.9 0.0 15.4 3.7 3.3

Number of digital sites Format Roadside 96s Roadside 48s Premium/Iconic Roadside/bus shelter 6s Retail mall Retail other (inc POS) Airport London Underground Rail Other transport Taxis Bus Other environments TOTAL

2012 10 33 57 100 1,782 14,866 1,068 1,408 240 30 3,000 0 54,714 77,308

2015 80 60 100 500 2,000 16,000 1,150 1,407 350 60 5,000 20 56,000 82,727

% change vs 2012 700.0 81.8 75.4 4,00.0 12.2 7.6 7.7 -0.1 45.8 100.0 66.7 2.4 7.0

2020 150 250 150 7,000 2,500 18,000 1,300 1,600 380 60 6,000 500 56,000 93,890

% change vs 2012 1,400.0 657.6 163.2 6,900.0 40.3 21.1 21.7 13.6 58.3 100.0 100.0 2.4 21.4

The Future of Out of Home Media in the UK

November 2012 update

Estimated revenue split by category 000s

All Out of Home Year Transport 2004 295 2005 292 2006 315 2007 330 2008 320 2009 256 2010 279 2011 274 2012 283 2013 276 2014 287 2015 293 2016 299 2017 305 2018 310 2019 315 2020 327 2012 30% 2015 29% 2020 27%

Roadside Retail & Leisure 454 98 473 106 486 103 507 94 472 80 378 75 421 78 408 76 414 77 403 76 418 77 425 78 430 80 438 82 445 82 452 83 459 85 43% 8% 41% 8% 38% 7%

Digital 0 25 28 44 66 73 101 128 183 183 203 230 245 265 285 310 329 19% 22% 27%

% Digital 0 2.8 3.0 4.5 7.0 9.3 11.5 14.4 19.1 19.5 20.6 22.4 23.2 24.3 25.4 26.7 27.4

Total 847 896 932 975 938 782 879 886 957 938 985 1026 1054 1090 1122 1160 1200

Digital Out of Home Digital Year Transport 2004 0 2005 25 2006 26 2007 32 2008 48 2009 50 2010 51 2011 62 2012 87 2013 82 2014 90 2015 103 2016 106 2017 116 2018 124 2019 127 2020 130 2012 48% 2020 45% 2020 40%
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Digital Digital Roadside Retail & Leisure 0 0 0 0 1 1 4 8 7 11 10 13 28 22 37 29 56 40 59 42 65 48 74 53 81 58 87 62 95 66 107 76 116 83 31% 22% 32% 23% 35% 25%

Total Digital 0 25 28 44 66 73 101 128 183 183 203 230 245 265 285 310 329

The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

Innovation, technology and the consumer

Technology change Kinetics latest consumer research reveals that 64% of Twitter users, and over half of Facebook users, are very active on the move. This has seen a fairly consistent upwards trajectory over the past year as smartphone penetration and functionality continues to evolve. Usage of location-based services is the highest of the emerging smartphone technologies mentioned with usage up around ten percentage points in 2012 so far. Understanding and recognition of other activation technologies like AR, NFC and QR code use also continues to rise and the combined needs of education of capitalising on use and full incorporation into smartphone releases will present a real consumer communication opportunity across the next few years. Consumer certainty of a digital OOH future has increased in the past 18 months. Those convinced that we will all be carrying internet-enabled devices wherever we are out of the home is now 83% (up around 10% in that time) and two-thirds believe in our ability to access the internet in any Out of Home location. A third more of us believe our mobile phones will be the most important piece of technology that we own compared to February 2011. The proliferation of smartphones and accompanying app technology, facilitating simple transferral of information or transactions, is translating into growing confidence amongst consumers. For example, we discovered that people are twice as likely to use mobile banking compared to one year ago. Whilst those using a mobile app to access their bank information has also jumped drastically from 1% to 11% since September 2011. Londoners in particular are much more likely to use a wider variety of payment methods including new technologies.

A quarter of Londoners have paid by tapping their phone against a machine, in comparison to 5% in the rest of the UK, but this will expand with bank and retailer-driven usage. Meanwhile a third of Londoners were using the same technology by tapping a debit/ credit card compared to 9% in the rest of the UK. Our various campaign research has demonstrated high levels of activations of interactive advertising. We are also seeing more virtual shopping examples, with advertisers like Argos, Tesco and Ocado all adopting the creation of virtual shopping experiences to drive brand activation and purchase. Eye Corp and others have pioneered a more permanent use of this and it remains a realisable purchase outlet for advertisers targeting relevant consumer locations. When it comes to virtual shopping, over half of respondents believe direct interaction with Out of Home screens has a huge potential for shopping. Furthermore, 70% appreciate the usefulness and convenience of such virtual stores. Airports (70%), shopping malls (63%) and rail stations (59%) are seen to be the most beneficial environment to have virtual stores. Consumers appear aware of the importance of dwell time and how they would be happy to make good use of time waiting for a flight, train or even whilst already out shopping.! When it comes to the products that people felt that they could see themselves buying in virtual stores, the top three were gifts at 68%, groceries at 53% and electronics at 52%.

83%

want internet access are convinced that we will all be carrying in any Out of Home location internet-enabled devices wherever we are out of the home in the future

64%

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The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

Innovation and future changes Out of Home advertising is currently going through a rapid growth in innovation that, whilst not on the scale of traditional campaigns, is beginning to gain momentum. Campaigns are becoming more interactive through the employment of gender, facial and gesture recognition, touch screen technology and the integration of mobile, social and interactive applications. This will ultimately make campaigns more memorable and personal by connecting the consumer to the brand. The combination of media owner investment, technology advancement and consumer accessibility will certainly influence the changing shape of the medium in the coming years. We expect to see the following innovation trends come to the fore within Out of Home in 2013, capitalising on the technology, digital and social media revolution we have seen impact the medium in 2011 and 2012.

Interactive 6 sheets We expect to see a growth in the use of interactive 6 sheets in a greater number of environments. A number of brands, including Fosters, Volvo and Microsoft have embraced interactive campaigns creating real engagement, social media tie-ins, data capture and promoting brand advocacy. We expect touch to prevail as the key interaction technique, but camera-based technology is also possible. NFC or QR integration will facilitate content download and brand activation. People-powered campaigns A key trend for 2013 will be user-generated content (UGC), making consumer engagement with Out of Home authentic and real through live brand experiences and smartphone interaction. Content generated through live brand experiences can be leveraged to connect through to other media platforms including other Out of Home formats, social media and digital. UGC streamed to digital OOH puts consumers at the heart of any campaign. This creates a platform for sharing experiences and social media commentary on a broadcast scale with brands facilitating the experience. Grand Visuals OpenLoop technology allows brands to directly update live content to multiple digital formats at the touch of a button, as used by Nike throughout its #makeitcount campaign in 2012. Mobile interactivity Mobile and the smartphone will infiltrate all aspects of Out of Home interactivity and activation. We expect to see growth in mobile interactive campaigns via QR and then NFC as NFC-enabled phone penetration and contactless payments and m-commerce grows. New technology provides potential for all smartphone users to actively engage with campaigns in Out of Home environments. The increased availability and demand for campaign activation is becoming an increasing feature of the UK market. Alongside partners JCDecaux and Clear Channel, Kinetic has conducted two major insight projects, to understand how interaction and activation works (from Touchscreen to NFC) and has a fuller understanding of how campaigns can activate consumers in the right way. Use of mobile Augmented Reality techniques such as BlippAR and Aurasma are also expected to expand in 2013.

The Future of Out of Home Media in the UK

November 2012 update

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Multi-sensory experiences Multi-sensory creations are gaining popularity as Out of Home engagements are being made more immersive through the addition of touch, sound and other stimuli. Technology advancements offer strong connections to social media as consumers are keen to share their experiences. 4D projections with sound or smell, lift wraps with smell, sound showers and touchscreens all provide opportunities to enhance the human brand experience. Urban installations The emergence of smarter cities to galvanise our immediate surroundings has created the landscape and opportunity to communicate directly to the urban, mobile, connected consumer. Urban dwellers spend more; they also expect more from their surroundings and actively adopt brands that enrich their environment. And there is no better way to do this than through Out of Home. The insights gained from the sophisticated data trails left by urbanites enable more detailed and targetedOut of Home planning. Despite having global connections, peoples identity is still heavily anchored to the city they live in. ThroughOut of Home, brands have the opportunity to start conversations amongst these urban communities and become part of the cultural and social landscape. From living art to graffiti walls expect to see an increase in examples of brands creating artistic installations in unexpected places.

Future technologies Beyond these key changes, the following technologies are impacting on parallel areas of industry and leisure and could help advertisers expand the relationship with people on the move. Gesture Recognition achieved via depth imaging camera technology, Gesture Recognition is the ability to track user movement and navigate and control screen content accordingly. This is used for grabbing the users attention and encouraging them to interact with your campaign by using their own body as the trigger device. Character Skeleton Generation extracted via depth imaging camera technology and render engines, Character Skeleton Generation provides us with a fully animated, fully dynamic skeleton framework. This can be used for engaging users with real-time character and avatar animation, allowing them to populate screen content and bring your campaign to life. By live mapping a hidden actor and extracting their real-time animated skeleton, we can combine that skeleton output with computer rendered virtual assets for augmented reality. This can bring an AR brand ambassador to life for example and engage with your audience personally, contextually and in absolute real-time.

Content generated through live brand experiences can be leveraged to connect through to other media platforms including other Out of Home formats, social media and digital.

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The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

Body Mapping and Environment Isolation is realisable by mapping a user through a depth imaging camera and applying parameters which can effectively remove that user from their physical space and isolate them as a digital asset. This can then remove the on-screen background of a DOOH location and taking the user on a virtual journey by relocating them into other virtual or live environments. Facial and Emotion Recognition using sets of image points known as facial landmarks, facial recognition camera and software capture the textures and contours of faces to deliver age, gender and mood (happy, sad, impassive and alert) data. Advertisers can exploit this for delivering mood and demographic-specific content, products or services, as well as enabling very accurate real-time audience measurement for your campaign. Emotive Manipulation through utilisation of specifically tailored scents and sounds, it becomes possible to evoke strong emotional reactions which dramatically affect users mood, judgment and sense of well-being. This can subtly increase emotional engagement with a campaign by directly communicating with those parts of the brain most associated with emotion and memory. Remotely Connected Mechanical Interaction using a combination of computer, electrical and mechanical engineering, it is possible to build a machine or mechanical device that can be controlled from a internet connected device. This can give consumers the opportunity to take control of a device from their computers or smartphones, regardless of location, and allowing them to engage with your brand. Mind Controlled Interaction a brainwave sensing bio-sensor headset acquires, measures and optimises the user brainwave impulses with research grade precision directly from the forehead. This can engage audiences by giving them a fun, intriguing, intelligent and interesting activity or gaming channel with which to interact with your brand.

Gaze Interaction this uses an eye tracker to estimate the point of sight with extreme accuracy using image sensor technology. This tracks the users eyes and calculates the point of gaze via mathematical algorithms. This can measure touch-free interaction with screen content whilst simultaneously capturing accurate real-time audience measurement from the campaign. Haptic Technology haptics simulate real physical properties such as weight, momentum, friction, texture or resistance - by communicating those properties through interfaces that let users feel what is happening on the screen. This allows users to physically engage with a virtual product on-screen through force feedback. NFC activation It is likely that this technology will play a significant role within the future activation of Out of Home. There has been some valuable research into this area delivered by the industry, including Kinetic. The key insights particularly taken from our joint project with JCDecaux around interaction with 13 advertisers in Reading in 2012 are that whilst NFC delivers strong interaction preferences, results and a valued experience, we still need to see advancements in consumer education and NFC-enabled smartphone penetration before this type of activation enjoys critical engagement. Encouraging findings from research conducted around NFC and QR-activated campaigns in 2012 reveal that the brands that elicited the most positive interactions did so through a combination of relevance, dynamic content and a strong call to action. People displayed a real willingness to interact with brand campaigns, including content download, mobile vouchering and information. QR Codes are a rational interim method of accessing content, but NFC is strongly likely to prevail in the long term and should not be discounted. There is immediate demand for mobile coupons.

The Future of Out of Home Media in the UK

November 2012 update

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High dwell time locations (including city centres and malls), a prominent call to action, and relevant content are the drivers for campaign activation. There is overwhelming consumer positivity about the experience, but education is still an important factor. This reinforces research from CBS Outdoor in Europe which found that people are positive about a technology-driven future, positive about brands that encourage interaction and that there is real opportunity for the activation of content, information and offers. Media owners are starting to roll out partnerships and interactive options around NFC and this will certainly give some stimulus to advertiser engagement across different roadside, leisure and travel environments. Measuring activation choices Our research with Clear Channel into interactive choices helps us understand how people naturally engage with Out of Home content. The study found high levels of engagement, long dwell times and an appetite for further interaction. The research featured a range of innovative technologies including touchscreen, gesture control, gender recognition, facial recognition and smartphone interaction.

People found interacting with an Out of Home ad positive and fun with 92% of participants agreeing interaction makes an advert stand out more. 82% also say interactivity makes an ad more engaging. The touchscreen mechanism was the most appealing method to initially interact with 78% more likely to choose touchscreen over, in this example, body motion. Over half of consumers prefer to use their mobile phone to leave details or as an option to continue the conversation with brands. 3 in 4 say they are likely to interact again. This research has helped cement our knowledge of the whole interactive experience and, added to our other insights in this area, helps us truly understand the roles touch, motion capture and mobile activation play in the communication process.

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The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

A changing media landscape Weve already identified that technology will pay an ever-increasing role not just in Out of Home, but in the way advertisers advance their communication options and structure their messages around content. The dual emergence of social media and the smartphone continues to shape our lives and the way we consume media. The synergy with Out of Home media has enriched the Outdoor experience but in certain cases such as with TV, current thinking points to a migration of our habits from traditional media. In the case of TV viewing, there has been an emerging migration to mobile video with online TV viewing substantially. Gamification, social media and location-based marketing will all therefore play a more significant role in the opportunities brands have to engage people and activate decision-making. Brands have also tapped into technology to enrich offline as well as online retail shopping experiences. The boom in social commerce is now transitioning in-store. We are increasingly processing payments through our mobile devices.

Recent examples include greater use of Wi-Fi to drive transactions, pop-up stores at iconic Outdoor locations, and the creation of location-based experiences that incorporate technology to drive real and tangible engagement that operate as part of our daily routines. Virgin Media has adapted Wi-Fi to 72 London Underground stations in 2012, with plans to expand coverage to 120 stations across the network. The service remains free (2012) and regularly serves more than 1 million internet interactions, from emailing to checking Facebook, web browsing and tweeting. From 2013, the portal will remain free for Virgin Media broadband and mobile subscribers, whilst a pay-as-you-go service will ensure everyone can access the service. As smartphones become the norm, the demand for data continues to grow and consumers have adopted the service rapidly. During the two weeks of the Olympic Games there were over 8 million Tweets, Facebook posts, emails and web pages delivered via the Underground Wi-Fi and in early August, 69% of people surveyed by CBS Outdoors work.shop.play panel said they would use Wi-Fi on the Underground. To use the new free Wi-Fi service, London Underground passengers simply connect and register their email address. Other media owners, including Primesight, have also explored the use of Wi-Fi connectivity in interactive Out of Home campaigns. As the perfect storm of technology advancements and increased consumer sophistication build to a crescendo, communication opportunities give brands the opportunity to push content and purchase drivers to people in all kinds of location or environment.

Gamification, social media and location-based marketing will all play a more significant role in the opportunities brands have to engage people and activate decision-making.

The Future of Out of Home Media in the UK

November 2012 update

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The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

Commercial challenges

Audience measurement, location, size, quality and availability are the key ingredients that have determined how static Out of Home media is traded. The arrival of digital screens and interactive opportunity redefines how we can use the medium. The unveiling of new audience measurement data has the potential to unleash stronger audience-based planning scenarios that can ensure we are reaching people in more receptive and impactful time and locations As weve highlighted before, the next ten years is likely to see parallel trading models emerge catering for static and digital networks coupled with a significant shift in the way screen time can be bought. Currently the vast majority of Out of Home campaigns are bought in two week packages; a model that is derived from the logistics of paper and paste. Digital, of course, immediately removes the logistical hurdle of installing a campaign across multiple sites. Instantaneous transmission of a campaign to sites via the internet or via mobile signals potentially enables digital OOH to be packaged and sold on a spot basis similar to TV or to adopt an ad serving system. A shift towards a fully flexible model would represent a huge change, but the industry will recognise the need to repay significant and well-formed media owner investments into the medium and ensure digital OOH grows into the creative and flexible offering it should and needs to be. Our consultation with media owners reveals a growing understanding and desire to at least evolve the way the medium is traded and packaged to help encourage more original thinking in the way static sites can be used. Clients will demand a more flexible approach reflected across other media and this is something the Out of Home industry will likely not only deliver but more actively promote in the longer term.

Deployment of new Postar data is likely to further stimulate serious appraisal of a shift to greater use of audience-based planning, if not a fully-fledged cost per thousand (CPM) trading model, seen by many as an outdated approach and unsuitable to the complexities of Out of Home. For example, some iconic roadside sites command a premium because they capture peoples attention through prominence and scale. Similarly, location-specific site networks in shopping, travel or point of purchase environments are naturally orientated to specific categories of advertiser or types of campaign. Physical location is a critical link to effectiveness. A shift to a pure CPM model whereby an advertiser simply bought a pre-set level of exposure without considering the context remains unworkable. A more refined model based on distinct networks of site categorised by likely consumer type or response is more likely. How we interpret the new Postar data becomes a crucial component of how the industry develops and evolves to 2020.

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The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

Conclusions

Technology to reshape Out of Home by 2020 The next few years promise to be exciting times for Out of Home. The core premise of its appeal to a connected, mobile, urban audience prevalent in the active consumer space, ensure the mediums relevance at the heart of consumer and technology change, whilst not diminishing its ability to generate impressions that last with iconic and impactful advertising. Crucially, the industry is ready to adapt to the changes both technological and consumer-led that society dictates, whether thats through interactivity, activation, engagement with social media, content or purchase deals. Consumers already want to interact with posters. Technology will not only re-value Out of Home but will forge a far closer relationship with other media. In the medium term, technology enablers like NFC and social media will transform the relationship between posters and consumers. Social media is already impacting this change. Content will play an increasing role in Out of Home media and in digital in particular; the medium is likely to become a more significant distribution point for digitised news and entertainment.

The degree to which Out of Home helps adopt a more flexible approach to the way advertisers use the medium is crucial in determining the future success of the medium. Also, further insight and application of new Postar data will help ensure the benefits to consumers of strong coverage and high frequency planning of messaging in environments where decisions are made and consumers are disposed to act and engage with advertising will ensure healthy growth amidst whatever media and consumer changes are around the corner. Globally, the industry is in good shape. Global growth and greater consolidation across the industry will assist the introduction of technology, whilst assuring greater consistency in the quality of assets. This ensures that, whilst leading in many areas of the industry, the UK will continue to benefit from new techniques and marketing initiatives from other markets, which will ensure the key elements of technology and flexibility are fully incorporated into all developments.

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The Future of Out of Home Media in the UK

The industry, consumers and technology to 2020 An update from Kinetic Worldwide

About Kinetic worldwide

Kinetic Worldwide is the worlds largest planner and buyer of Out of Home media and the global leader in understanding how brands can connect with peoples lifestyles and the environments they engage with. At Kinetic we pride ourselves on our objectivity and thought leadership. We have informed and up-to-date views on industry developments, consumer trends and the changing nature of media and we seek to stay constantly at the forefront of the fast-changing world of global communications. We manage our clients investment to ensure best advertiser value from communications. To achieve this, we integrate our core planning and buying services with distinct and specialist business units to deliver effective communication. Kinetic is a truly global network and part of the WPP Group with 38 offices in 36 cities in 21 markets. We manage our clients investment to ensure best advertiser value from communications.

Fully owned by WPP and part of the tenthavenue performance marketing division, Kinetics expertise and insight helps deliver solutions for clients that achieve ambitious brand and marketing goals. Kinetic has developed centres of excellence in digital and aviation media, research, insight and data, mobile marketing and Out of Home printing and production. We seek to maximize the impact of our clients investments through strategic thinking, proprietary tools, and the intelligent application of scale. For more information about Kinetic, please go to www.kineticww.com or follow us on twitter (@kineticww) and other social media platforms.

The Future of Out of Home Media in the UK

November 2012 update

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