The bottom fell out of the outdoor market in December, and first quarter doesn’t look much better, according to Lamar Advertising, which reported its fourth-quarter and full-year results Thursday (Feb. 26).
The Baton-Rouge, La. outdoor company, the third largest in the nation, reported a pro forma fourth-quarter revenue decline of 11.7 percent to $279.3 million, driven by a 16 percent decline in December. For first quarter, Lamar expects revenue to be down 15 percent to $246 million.
Across Lamar’s portfolio, both rate and occupancy are suffering and most advertisers are opting for shorter-term campaigns. Even digital boards, a growth area for Lamar and the outdoor industry, were down 24 percent.
“The world stood still in December,” said Kevin Reilly, Jr., president and CEO for Lamar. “We’ve seen more volatility in our bookings than usual. We had national advertisers just take a pause and didn’t want to talk about [outdoor advertising] until February.”
For the year, Lamar revenue was down 0.9 percent to $1.2 billion.
While most reports single out the weak local ad market, for outdoor, local is holding up better than national. Lamar’s revenue from national advertising was down 17 percent and is tracking down 17 percent to 20 percent for first quarter. Executives attribute outdoor’s advantage in local markets to the medium’s lower cost per thousand.
“We continue to get a larger share of local ad spend, and we’ll garner that at the expense of newspapers, radio and TV,” Kevin Reilly said.
Still, the company admitted it was hard to maintain rate integrity, although most of the rate discounting is confined to the largest markets.
“We’ve traditionally tried to hold the line on rate. There has been some pricing pressure with larger markets and national customers. We’re hanging in there with local,” said Sean Reilly, COO for Lamar.
As the economy began to take its toll last year, Lamar put its digital roll out on hold and cut 10 percent of its workforce, about 350 positions. Lamar is also in the process of aggressively managing its lease portfolio, renegotiating leases or taking down billboards that are unproductive.