Minimal investment, cashflow management (liquidity) and maximum returns on investment.
The fundamentals for sustainable business is universal and applies to all industry sectors with the Out of Home Media inclusive. These are market (sales/service generation), cashflow management (liquidity) and profitability (maximum return on investment). We can argue that profitability is allowed to come with time over a period of consistent sales generation ensuring business survival but while at it, should not be compromised, which centres on cashflow management otherwise known as liquidity.
Interestingly US$42 billion is forecasted as the Global expenditure on OOH Media by the close of 2025, with destination, malls, parks, transport hubs, roadside, street furniture, gyms & mixed-use developments seeing some of the highest growth rates. However, only the concept of less is more that can guarantee this figure by year end. Apart from location being at the centre in OOH media, the deliberate control of supply within every market would not only ensure consistent sales generation based on fundamental economic principle (supply & demand) but equally commands premium.
The bargaining power in a “less is more” market cannot be over emphasised as it simply places the power in the hand of Out of Home Media Owner (OMO). Such dynamic changes the order of things within such market beyond guaranteed occupancy based on “till countermanded orders” and restores prepayment or payment on order.
It however, must not be loss on OMO that the OOH media sector is in itself a fragmented sector and the uncontrolled appetite for increasing inventory can only add to the fragmentation. The fact remains that landlords and regulators are the unavoidable competitors that are encouraging fragmentation using various approaches.
For the landlords and asset managers who oversee large portfolios, their income typically comes from tenant rent, service charges and asset appreciation. Operational efficiency and income diversification are constantly scrutinised. An overlooked revenue leakage by OMO, hence integration and sustainability becomes way too complex. In reality, with the right expertise and strategy, minimal investment is needed while unlocking sustainable value.
Landlords and asset managers, overseeing diverse portfolios, control the very environments media owners and advertisers are keen to access: high-footfall, highly visible, and scalable locations.
a) Retail Parks are booming: As consumer habits shift post-pandemic, retail parks have become high traffic, high frequency, high dwell-time environments.
b) Contextual placements: Brands prioritise real-world touchpoints that align with consumer behaviours and movement.
c) Tech-Driven Efficiencies: Programmatic OOH is driving demand for scalable, data-driven locations
The right OOH Media commercialisation experience will consider the complexities from conception & valuation through to installations,
1) Feasibility & site analysis
2) Audience density & flow
3) Valuations/return
4) Regulatory compliance
5) CAPEX options
6) Business models, (fixed rent vs. revenue share vs, hybrid, depending on risk appetite/portfolio goals)
7) ESG considerations
As for the regulators and their focus on optimising revenue with increasing and increasing inventory…
To be continued, watch out for my yet to be published book with the above title (this being excerpts from a chapter in the book).
