We're none of us too happy about the state of the economy as we enter 2009, but it makes a lot more sense to concentrate on the deeper underlying trends. And fortunately for those of us in out-of-home, those underlying trends - both in terms of changing consumer behaviour and rapidly advancing technology - are very much in our favour.
One of the most important shifts in consumer behaviour over the past few years has been that people spend more time out of home than they used to. Despite all the entertainment options now available in the home, people are still choosing to go out more and more of the time. We're expecting this trend to continue throughout 2009 and perhaps even accelerate.
Certainly, people aren't going to alter their habitual behaviour much; and with shopping firmly established in the national psyche as a leisure activity, rather than a functional activity, people will continue to visit malls and high streets, even if they can't spend as much when they get there. The launch of Westfield clearly illustrated that shopping is an experience these days.
People may cut back on big-ticket items such as expensive foreign holidays during 2009; they are likely to compensate for this by treating themselves to more affordable luxuries on a regular basis. There is obvious scope for OOH to bring in revenue from the purveyors of life's more affordable indulgences; and continued shopping trips and days out will keep people out of their homes.
The arrival of digital media has made some traditional media less attractive to advertisers. Conversely, it has made OOH more attractive.
Up to now, digital technology in OOH has largely meant screens: new technology has been employed to make OOH formats that are more flexible than before, allowing better targeting - by daypart, for example - and giving greater scope for creative work: campaigns that have allowed McDonald's to advertise a different sandwich every day or McCain to advertise its potato wedges only when temperature levels reach "let's-have-a-barbecue-this-weekend" levels.
The digital side of OOH has outpaced the growth of the rest of the sector and will continue to do so in 2009, fuelled by its ability to offer advertisers greater precision in their communications. But digital technology should also impact on OOH in 2009 in two other ways.
First, we are already encouraging advertisers to use OOH to drive online search, but 2009 will see the functionality of mobile phones grow even faster, thanks to new more sophisticated handsets such as the iPhone. This will dramatically change the nature of search, with far more people searching while on the move (the incidence of search from iPhones is several thousand per cent higher than on previous models). Throw in the Google phone and we're looking at a radical change in behaviour - and one that will really benefit OOH. Posters are set to become not just a great point-of-sale medium, but also a significantly better point-of-search medium.
Second, digital technology will help to make OOH more accountable. Postar - the standard industry research for OOH - has led the way in establishing standards of media accountability, and this has helped fuel the growth of OOH over the past decade. As of next year, Postar will be enhanced, thanks to the decision to switch from paper diaries to GPS meters to track people's journeys through the day. This will provide more accurate data, giving advertisers greater confidence in the accountability of the medium.
We also expect to see greater numbers of planners adopting TouchPoints 2 during 2009, and this should also benefit OOH, as it reinforces just how much time people spend out of home, gives us greater detail on where exactly they are at any given time and potentially reveals how consumers' OOH journeys mesh in with their purchasing habits. When we tie it in with our OCS research, we can also find out an extra level of detail on their moods and how they interact with the OOH formats around them.
So these are some of the positives that OOH can benefit from in 2009, but that's not to pretend that it's going to be an easy year - only that we're well prepared for it.
The challenges 2009 will bring include dealing with a very different media market. In OOH, what we've been experiencing - and what will no doubt continue in 2009 - is a short-lead-time market. This is crucially different from a short-term market, where advertisers hold back money looking for cheap deals, and move it into whatever looks like a bargain. In the short-lead-time market we're currently experiencing, advertisers know what they want to buy and are sticking to the communication routes that make most strategic sense for them - they're simply committing the money later.
We know most advertisers are aware of the benefits of continuing to spend through a recession and of the pitfalls facing those who cut back. Study after study of performance coming out of previous economic downturns reveals that it's vital to maintain share of voice and OOH offers a cost-effective way of doing this. Also, the new flexibility of the medium makes it more appropriate for advertising the kind of short-term price offers and promotions that are likely to be an increasing feature of many companies' strategies.
As a result of all this, we're not expecting growth during 2009, but neither are we expecting any significant drop in revenue. At the moment, we're predicting the market will be down by around 4 per cent year on year. It's not what we want, but it's not a disaster.
The underlying strength of OOH is visually symbolised by the impressive landmark sites that have become a feature of the medium in recent years. We know from the experience of the offices around our global network that an Olympics always acts as a catalyst for such sites, so we expect OOH to confidently stamp its identity even more firmly on the nation's landscape in 2009 and beyond, as we gear up for the biggest OOH event in the world.
- Steve Bond is the group managing director of Posterscope UK.