Special Report: Outdoor

NEW YORK All the way around, the outlook for out-of-home is as bright as Times Square. Trends driving the sector in the way of technology, consumer habits and measurement show no sign of slowing down, analysts say. More than ever, consumers are spending more time away from home. Technological advancements, particularly in the way of digital billboards, are opening more revenue streams. And finally, more reliable measurement techniques are providing marketers with much-wanted data on demos and engagement.Next year, total spending on out-of-home will skyrocket 12.8 percent to $8.94 billion versus this year, per Veronis Suhler Stevenson. PricewaterhouseCoopers predicts more conservative but still outstanding growth of 9 percent to $8.12 billion in 2008, on top of this year's 8.9 percent surge. Out-of-home is the second-fastest growing ad medium behind Internet, with projected 8.2 percent compound annual growth in the 2007-2011 period, according to PwC.Certainly, no other old-line medium can match such expansion. As technological gains—the march of the Internet, digital video recorders—contribute to the erosion of TV, radio and newspapers, tech advancement has only fueled out-of-home's growth."Out-of-home is as the forefront of using technology. Unlike TV and the other traditional media that are playing catch-up, new technology is driving the growth in out-of-home rather than taking away eyeballs," said Patrick Quinn, CEO of PQ Media, which partnered with VSS on its industry forecast. VSS and PwC report out-of-home data differently, providing unique perspectives on the fast-growing market. PwC divides the market between billboards and non-billboards, while VSS categorizes traditional versus alternative (video screens, digital boards, alternative ambient ads).Billboards, both digital and static, constitute 65 percent of the out-of-home market, per PwC. The double-digit gains billboard have enjoyed since 2005 are projected to continue into 2008, mostly due to the growth in digital boards, which can generate 10 times the revenue of a static board, said Stefani Kane, partner in PricewaterhouseCoopers' Media and Entertainment Practice.While digital billboard inventory has exploded, demand has stayed high, and so have rates. The targetability and changeability of digital boards and better measurement have kept prices aloft, experts say. "All this gives added value, so we're not seeing a high slippage in dollars," Kane explained.As VSS reports, old-fashioned, static billboards are growing as well, as consumers spend twice as much time away from home than they did 30 years ago and the average daily commute has doubled to about an hour. Those trends continue to energize out-of-home companies like Captivate Network and Transit TV, which, in recent years, have found a captive audience in elevators, supermarkets and transportation hubs. Consumer lifestyles aside, the impact of more sophisticated metrics cannot be underestimated. "Measurement is a big issue. In the past you had traffic counts, but we'll soon have actual eyes-on measurement. Now we're talking about engagement," Quinn said.By the end of next year, the Traffic Audit Bureau (TAB) should have its new comprehensive measurement system in place in more than 200 markets. This system not only tracks traffic patterns but consumers' eye movements, detecting whether passersby even look at an ad.Nielsen Outdoor's Npod system, from which data was first generated in 2005, uses GPS to track consumer exposure to out-of-home ads. (Nielsen Outdoor, like Adweek- Media, is part of The Nielsen Co.) As the Npod rolls out in more markets and TAB's data begins crossing the desks of media execs, out-of-home—still an overwhelmingly local ad medium—could attract more national advertising, experts say.With "that level of detail, down to eyes-on data, the industry hopes it will give out-of-home an edge," Quinn said.

Brand Marketing

Special Report: Outdoor

Laureen Miles

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Laureen Miles