Driving assessment

Behind oOh!media’s good half-year results

Cathy O’Connor

oOh!media announced a 10% revenue increase in its half-year results, with key performance indicators and statutory indicators all increasing.

AdNews spoke with Cathy O’Connor, CEO and Managing Director of oOh!media, about the drivers of these strong results, the role digital plays in the success of the outdoor advertising industry and the future of the media specialist exteriors.

O’Connor said strong performances in road, retail and street furniture, which are now ahead of 2019 pre-COVID figures, were the main drivers of results.

“We’ve really seen a very strong end to 2021 and what’s happened is that the momentum in these broadcast formats has just carried over into the first half of the year. So that’s, to first and foremost, what determines the results.

“The other key factor is the operating leverage of the business, and we’ve had very good results in terms of converting that revenue growth into earnings growth.

“We had underlying EBITDA growth of 62% year-over-year to $51.5m and adjusted NPAT of $20.4m, and that’s actually a fold increase. eight over the prior year, so you’re really starting to see the structure and the fixed cost base of the business starting to do its thing with revenue growth.”

O’Connor said oOh!media is part of a very dynamic industry that is increasingly interacting with customers, both in a traditional and digital sense.

“Outdoor signage has really put a lot of innovation into its measurement. It’s doing some really good things in standardizing formats, and it’s becoming more and more available through programming, and we’re just seeing that translate into an increased share of total media compared to other media.

“For the first half of 2022, in SMI data, what we know is that out-of-home advertising accounted for 14% of total advertising growth, but the share is currently for half of 11.6% whole cake. You see, because we’re taking a high percentage of the growth, it bodes very well for out-of-home to continue to grow its media share relative to other media.”

O’Connor said the dividend announcement, combined with a share buyback of up to 10% of issued capital, demonstrates the board’s belief that the industry and oOh!media’s place in within it are well positioned for future growth.

O’Connor said that unlike some of the stories about the current macro environment, oOh!media finds a much more engaged, proactive and forward-looking customer base than advertised.

“Certainly, in the case of the exterior, the information activities are strong. For the third trimester, oOh! media was up 37% year-on-year, which is obviously outside of a third quarter that was somewhat affected by lockdowns last year, but even so the sector was up 19.8% in June .

“We won’t know the extent of this until the end of the quarter when the RMA releases industry data, but it certainly looks like the momentum has continued into the second half.”

O’Connor said digital is key to success, with 62% of industry revenue coming from digital and oOh! Media near this average in their own portfolio.

“MOVE 1.5 really allows us to give advertisers more work around measuring and evaluating digital, how it works and where it’s most effective.

“What we know about MOVE 1.5 is that it’s a combination of both classic and digital that delivers the best return on investment and superior range and frequency. In the case of oOh!media, we’ll always argue that it’s the mix of static and digital that gets a great return on investment.

“What we’re also seeing from a category perspective is that most of our top 10 categories are up year over year, and several of them are back ahead of the 2019 levels, which bodes well for the sector as it continues to go back to its top mark.”

O’Connor said as the biggest player in the industry, there is a lot of growth for oOh!media ensuring they continue to drive the industry ahead of other media.

“We have made a strong statement that we are first and foremost an out-of-home business and I believe the breadth of our assets and our mass reach proposition is very unique in the industry, and we believe this will continue to bring us growth in the future.

“We’re doing a lot of interesting partnerships, especially in the content space. We announced a major partnership with News Corp, which effectively brings a higher level of content to all of our various content environments, whether it’s offices, airports or parts of retail and suburban street furniture. .

“Further digitization of our assets is an obvious thing that we will continue to do and we continue to innovate around things like anamorphic 3D technology which is seeing a lot of interest from advertisers – just revolutionary new thinking to spur levels of creativity in the sector.

“We’ve also launched our new creative services unit, Polly, and that’s our strategy in the post-Junkee era. We’ve had a huge response from top brands and agencies wanting to partner with us to really seek to inspire customers in this fascinating new world of digital out of home, and to use the medium in a more adaptive and tactical way.

“There are plenty of reasons to be optimistic. This is why we believe that all of our growth will come from within the industry and we will be a very proud, successful and leading out-of-home business if our strategies succeed, which they will.

Do you have anything to say about this? Share your opinions in the comments section below. Or if you have any news or a tip, email us at [email protected]

Sign up for the AdNews newsletter, like us on Facebook or follow us on Twitter to break stories and campaigns throughout the day.