With new technologies and ad mediums competing for marketing dollars, why does out-of-home (OOH) advertising continue to succeed as a way to reach consumers? Nancy Fletcher, president and CEO of the Outdoor Advertising Association of America (OAAA), has a simple answer.
“Out-of-home surrounds and immerses consumers where they spend 70 percent of their waking hours—away from their homes,” she says. “It is the ultimate advertising vehicle for disrupting and engaging.”
OAAA certainly knows the market. Since 1891, it’s been the lead trade association representing the OOH advertising industry. Today it has nearly 800 members, accounting for about 90 percent of industry revenues. It breaks the market down into four categories: billboards (65 percent of industry revenue), transit (17 percent), street furniture (6 percent) and “alternative” OOH media such as place-based digital (12 percent).
Over the last decade, notes Fletcher, OOH has grown faster than the overall advertising market, and performed better than all other media segments except cable TV and Internet. Its share of overall ad spend has grown steadily from around 3 percent in 2000 to almost 5 percent today. What’s particularly impressive about that figure, notes Fletcher, is the timing. “The industry has doubled share in the last 15 years at the time of the Internet and cable TV growth,” she says.
But that’s just a start. OAAA has plans to increase OOH’s share of ad spend further via a new industry positioning that will be introduced at its annual conference on May 1.
This upward trend is backed up by 2011 OOH revenue figures that OAAA released earlier this year. Based on its analysis of estimates from Miller Kaplan and Kantar Media, as well as member company affidavits, OAAA found that OOH ad revenue rose 4 percent to $6.4 billion in 2011. Moreover, says Fletcher, the industry has grown steadily over the past seven quarters, “and that trend is expected to remain strong.”
The growth has been fueled across industry categories. For instance, four of the top five advertisers increasing OOH media spend last year were financial brands, including Chase, Prudential, JP Morgan and Citi. One of the highest performing segments was schools, camps and seminars, which was up 22 percent for the year. That category includes university hospitals, which have been doing OOH outreach to help build their credentials.
One of the most important initiatives OAAA is supporting is the 2011 launch of Out-of-Home Ratings. The Traffic Audit Bureau (TAB) came up with a metric—previously called Eyes On—that can be integrated into syndicated planning systems so that media buyers and planners better understand the impact of OOH on a full-bore media plan.
Previously, TAB had estimated how many people, on a daily basis, passed a particular out-of-home unit, standardized for such factors as seasonality, illumination and persons per vehicle, a measurement called Daily Effective Circulation (DEC). While DECs measure people, TAB’s Out-of-Home Ratings measure impressions—the number of people that actually look at an OOH ad. Most importantly, OOH Ratings give the industry an audience measurement system that is comparable to metrics used by other media, including unit-by-unit demographics.
“There’s increasing pressure to measure,” says Fletcher. “This gives advertisers what they’d been asking for. Now they can have granular demographics of who is passing by their displays.”
This kind of measurement is critical to OOH’s long-term growth and success, she adds. “If we’re going to grow,” Fletcher says, “we’re going to need better accountability.”