While worldwide digital out-of-home (DOOH) advertising revenue increased by 11.4 per cent last year, reaching $7.88 billion, the rate of growth decelerated sharply in the second half of 2012, according to a report from PQ Media.

The media research firm cites significant downturns in world economies and advertising markets as reasons for the slowdown. Its studies show global DOOH revenues experienced a compound annual growth rate (CAGR) of 12.1 per cent from 2007 to 2012, with the digital signage industry’s expansion tempered by decelerating growth in both 2011 and 2012.

For 2013, worldwide economies stabilize later in the year and DOOH operators move forward with projects that have been delayed from late 2012.

“While DOOH operators’ revenues are pacing for expansion in 2013, challenges continue to test this industry as it develops amid a slow economic recovery and intense competition for advertising budgets,” says Patrick Quinn, PQ Media’s president and publisher. “For DOOH to succeed, emerging leaders must drive consolidation, scale, research and more efficient processes, while better-positioning the medium based on its consumer targeting, flexibility and audience engagement.”

PQ Media’s global forecasts define the DOOH advertising medium across two platforms: digital place-based networks (DPNs) and digital billboards and signage (DBBs). The company reports DPN operators generated 70 per cent of global DOOH revenues in 2012 and saw their slowest growth—8.6 per cent—since 2009, reaching $5.57 billion. Strong gains in transit and health-care categories were offset by slowdowns in retail venues and cinemas.

Global DBB revenues, meanwhile, increased at a stronger rate of 18.7 per cent to $2.31 billion, due to the expansion of digital signage at roadside locations and transit facilities.

PQ Media says the U.S. remained the world’s largest DOOH market in 2012, with $2.1 billion in operator revenues, followed by China with $1.72 billion and Japan with $789 million. Russia was the fastest-growing market, rising 26.9 per cent, followed by the U.K. with 25.7 per cent—thanks in part to advertising related to the Queen’s Jubilee and the Summer Olympic Games—and India with 20.1 per cent.