The industry’s growth and its promising future are supported by these fundamentals:
- Mobility of consumers, who are outside the home most of the day
- Efficiency of OOH advertising, which delivers impressions at much lower cost per thousand compared to other media
- Innovation boosting the value of OOH advertising
- Fragmentation of other media has made OOH advertising even more reliant
- Modern OOH business practices include a new ratings system that makes buying easy
The OOH major categories are billboards, transit, alternative, and street furniture
Billboards are the biggest category, accounting for 65 percent of industry revenue. Three out of four billboard ads promote local businesses. Standard sizes are known as bulletins (14 x 48 ft) and posters (12 x 24 ft). Transit advertising is displays affixed to moving vehicles or positioned in the common areas of transit stations, terminals, and airports (16% of OOH revenue). It produces significant non-fare revenue for mass transit and airports. The alternative category (13% of OOH revenue) includes ads in movie theatres, arenas, stadiums, malls, and other indoor venues. This category also includes indoor video screens (known as placed-based digital) in offices, elevators, health clubs, retail outlets, airports, and many other venues. Street furniture is typically built and maintained by OOH companies. This category includes bus shelters, bicycle racks, newsstands, kiosks, and shopping mall ads (6% of OOH based digital) in offices, elevators, health clubs, retail outlets, airports and many other venues. Street furniture displays are positioned within close proximity to pedestrians and shoppers for eye-level view or curb-side to influence vehicular traffic.
Size and Scope
In 2012, the OOH advertising industry produced $6.7 billion in revenue. Companies range in size from publicly traded multinational media firms to small family-owned businesses. Well known companies operate OOH advertising businesses, such as iHeartMedia, Clear Channel, Lamar Advertising Company, Fairway Outdoor, Van Wagner, JCDecaux, and CEMUSA.
OOH advertising’s market share of total ad spending has grown from 3 to 5.2 percent over the past decade.
Mainly, OOH is a local business. Top national brands in telecommunications, finance, retail, real estate, and food services also rely on the medium.
Mobility, Effectiveness, Measurement, and Creativity
Consumers spend more than 70 percent of their waking hours outside of the home, and on average, more than 18 hours per week in a vehicle. Nine out of 10 of those trips are in personal vehicles. Sixty percent of vehicle travel is dedicated to regular consumer tasks – common routines – such as shopping, commuting to work, socializing, and eating outside the home.
OOH advertising’s ability to engage on-the-go consumers makes it a powerful stand-alone medium and a strategic complement to other media. When OOH is combined with other advertising, it extends reach, amplifies a campaign, and drives consumers to engage with brands online and in-store.
Over the course of a month, seven out of 10 people say they have seen an OOH ad, and 70 percent say OOH is likely to influence a purchase. Like other media audiences, the OOH audience is measured by independent auditors.
The OOH audience is measured by the Traffic Audit Bureau (TAB). TAB calculates weekly circulation using official (government) traffic counts factors in visibility, and assigns demographic profiles to panel locations. This produces OOH ratings. Learn more about TAB ratings at www.tabonline.com
The OOH medium is a showcase of creativity, featuring humor, drama, simplicity, and surprise. The industry celebrates creativity via the annual OBIE Awards, the oldest advertising design competition. Learn more about the OBIE Awards at www.obieawards.org
OOH advertising makes cash registers ring. The majority of OOH ads promote local enterprises – the jobs-engine of the economy. A diverse range of businesses within local economies depend on OOH, including insurance agents, real estate agents, restaurants, banks, lodging accommodations, automotive dealers, and retail stores. One-third of OOH ads promote the travel/tourism industry, a top employer in most states.
The industry supports jobs and spurs innovation. Billboard advertisers employ more than 9 million people, according to an analysis by iMapData. The production of digital billboards is a bright spot in US manufacturing, with expansion to meet demand. OOH operators buy a wide range of services and supplies, including printing, computers and machinery, landscaping, technology, and equipment. OOH advertising provides community amenities such as bus shelters, bicycle sharing programs, and phone kiosks. Contract fees paid to cities and counties for these advertising franchises produce revenue sharing while also providing local citizens with a welcome public service. Thousands of landowners benefit from lease payments for billboards located on their property, helping pay property taxes, mortgages, and living expenses. A comprehensive analysis of land parcels in Tampa, FL, showed billboards enhance property values. Three out of four businesses using billboards say they would lose sales if they lost the ability to advertise on billboards, according to a comprehensive survey of advertisers conducted by Villanova Marketing Professor Charles R. Taylor, Ph.D. The average expected lost was 18 percent.
OOH’s Digital Revolution
Nationwide, 6,100 billboards have been converted to digital (LED) displays, or 1 percent of the total number of billboards. Advertising messages are changed by computer, and static display times typically are six or eight seconds. Research – based on driver behaviour and accident records – shows that digital billboards are not linked to accidents. The structures are equipped with lighting sensors, and brightness is adjusted to surrounding light conditions to avoid glare. Advertisers like the speed and flexibility of digital billboards: quick postings, easy change of messages, and no production costs. Likewise, a broad range of government agencies rely on digital billboards to deliver emergency messages and empower the public to help law enforcement. Other OOH formats are being converted to digital displays, including bus shelters, transit posters, phone and information kiosks, airport dioramas, and more. These digital ad platforms provide flexible advertising options, while also offering passers-by valuable information such as current time, weather, or community messages. Indoor video networks provide entertainment, news, weather, sports, and targeted advertising content to consumers in coffee shops, building lobbies, convenience stores, supermarkets, gas stations, health club, medical offices, and more. Many of these digital OOH formats are interactive and can display real-time web, social media, and mobile messaging. Some feature touch screens to allow consumers to directly interact with an advertisement. These displays can also display Facebook and Twitter messages, providing consumers with an interactive brand experience.
Public Service: OOH Helps Communities
For more than a century, the OOH advertising industry has donated space to promote worthy causes, from local charities to national security. The OOH advertising industry donates more than $450 million in ad space annually. Pro bono billboards are a leading communications tool for The Advertising Council, the Boys & Girls Clubs of America, the American Red Cross, The FBI, local law enforcement and federal, state, and local emergency management officials. In 2012, FBI Director Robert S. Mueller recognized the OOH industry with a Director’s Community Leadership Award for helping law enforcement. The FBI says digital billboard publicity has led to the apprehension of 53 fugitives. The Secretary of Homeland Security also thanked the industry for helping the Federal Emergency Management Agency (FEMA) before and after Hurricane Sandy.
Since 2008, the OOH advertising industry has partnered with the National Center for Missing & Exploited Children (NCMEC) to display more than 1,200 AMBER Alerts.
The OOH advertising industry continues to take steps to reduce the industry’s carbon footprint. New lighting technology is helping cut power consumption. Paper posters with glue have been re-placed by recyclable materials. Since 2009, more than 11.6 million pounds of billboard substrates have been recycled into new and useful products, including landscaping mesh, which is pictured below. Digital billboards are also recycled, and consistent gains in energy efficiency have reduced power requirements significantly.