After slump this ASX share may be an opportunity

Structural Growth in Outdoor Advertising

Investing in the media sector has always required a strong stomach for cyclicality. However, the outdoor advertising industry—prominently represented on the ASX by oOh! Media—offers a unique structural story that differs significantly from traditional television or print media.

As Adelaide continues to grow and living density increases, the "visibility" of outdoor assets remains high. Whether it is a digital billboard on West Terrace or panels in our major shopping precincts, outdoor advertising is one of the few mediums that cannot be "skipped" or "ad-blocked."

The Digital Transformation

The real growth story here is the "digital conversion." Traditionally, billboards were static sheets that were expensive and time-consuming to change. Today, digital technology allows for creative flexibility, immediacy, and premium presentation. Marketers can now change ads based on the time of day, weather, or specific local events, which significantly increases the return on investment for advertisers.

Understanding the Risks

While the long-term structural outlook is positive, outdoor advertising is a high-fixed-cost business. This means that small dips in revenue can have a magnified impact on earnings. For investors, the risk often lies in "concession renewals"—the contracts companies hold with landlords or government transport authorities.

For our clients, we view this sector as an opportunity for those with a long-term horizon. While market sentiment can be volatile when economic conditions soften, the underlying tailwinds of population growth and better audience measurement (through technologies like MOVE) suggest that outdoor advertising will continue to take a larger share of the total Australian advertising pie.

Source: https://www.morningstar.com.au/stocks/after-shares-slump-this-asx-share-may-be-an-opportunity

If you are interested in learning more, give us a call on 08 7477 8252. Our Adelaide based advice team can help you create a long-term portfolio, to generate both growth and income for your future.

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