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Amy Schein

What’s Fueling Outdoor Ad Industry Growth?

by Amy Schein | Dun & Bradstreet Editor

April 27, 2016 | No Comments »

A few key factors are contributing to the resilience of out-of-home (OOH) advertising, an industry that includes ads placed on billboards; transit space such as airport terminals, buses, subway trains, and taxis; and street furniture such as bus shelters and benches. Consumers are encountering more billboards and OOH video, while online ads and TV commercials get easier to avoid. Advances in technology are also driving market growth.

Compared with other media categories, OOH advertising fared extremely well in 2015, especially against other traditional media ad sales. In fact, OOH was the only traditional category that grew. All total, traditional ad sales were down 2.2% for the year across the globe, according to Magna Global. Television and radio were flat, while print newspaper ads fell 8.6% and print magazines fell 10.1%. OOH, meanwhile, grew by 2.6% for the year.

As we can see from the Magna Global figures, outdoor advertising competes with other forms of print and digital media for ad dollars. Ad spending on digital media (social media, websites, mobile) has surged over the last decade, but advertising avoidance is a key concern. With ad avoidance, consumers have a growing number of ways to avoid viewing ads — including muting, fast forwarding, or employing ad-blocking software, to name a few.

Meanwhile, increased spending on transportation infrastructure coincides with the increased presence of OOH displays such as billboards and bus shelters and benches. Transportation spending is projected to grow at an average annual rate of about 6% worldwide over the coming decade, with more spending expected in emerging economies than developed ones, according to PricewaterhouseCoopers. As the middle class continues to grow in emerging Latin America, Asia/Pacific, and Middle East markets, car ownership will increase in these regions, signaling opportunity for more highway construction, which in turn will provide more locations for billboards.

Against this backdrop, the OOH industry is busy converting its traditional displays to digital. Through digital display, companies can rotate ads among multiple advertisers, allowing them to sell more ad space to advertisers. Digital ad copy can also be changed by time of day and messages can be altered based on advertisers’ needs.

To make billboards even more appealing, marketers are producing OOH ads that bridge the digital and real worlds. Digital displays can use geofencing technology, which gives advertisers the ability to send mobile ads to consumers with a smartphone who are in proximity to a billboard, event venue, or retail location. Advertisers can also push out real-time messages tied to inputs such as weather or news.

The industry is not without its challenges, including a high amount of regulation. Permits and codes can dictate a sign’s size, location, and illumination, among other attributes. In some locations, billboards are outright banned. However, in an increasingly crowded advertising landscape where technology is advancing rapidly, OOH may be an attractive option.

Amy Schein is an Industry Specialist at First Research, where she covers various aspects of the media industry. She earned her BS and MA in media studies at the University of Texas at Austin. Follow Amy on Twitter.


Photo by Jonny Hughes, used here under a Creative Commons license.

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