Out of Home Recovery Continues, Driven By Restaurants, Real Estate, Insurance

After suffering double-digit declines amid last year’s empty cityscapes and highways, out of home advertising’s 2021 comeback appears to be gaining, according to reports from industry groups. Even with the surge of the Delta variant, OOH’s second quarter performance remained strong, rising 38%, according to the Out of Home Advertising Association of America. The trade group said it was “very encouraged” by the initial data it’s seen for July. In the second quarter, among the top 100 OOH advertisers, 80% increased their outdoor media spend from Q2 2020, with 45% more than doubling expenditures. Delta’s impact Through the first half of the year, the OOH billboard category, which represented 84% of total OOH spend YTD 2021, is 96% recovered compared to the first half of 2019, the OAAA said. “The [Covid-19] delta variant has created a less linear economic recovery,” Steve Nicklin, SVP, marketing and analytics, OAAA, told Adweek. “However, the latest Harris Poll Covid-19 tracker indicates consumer concern about the variant isn’t causing sharp shifts in optimism, and that heightened concern about the variant has already started to trend downward from early August.” OOH’s comeback reflects two things: the strength of specific advertising categories and the increased integration with digital channels. Back in May, the OAAA updated its guidelines to recommend against the age-old method of relying on ad exposure. The goal was to make media buys for OOH more like online. For the first half of 2021, the strongest categories among the top 10 categories were restaurants, insurance and real estate, automotive dealers and services, retail, local miscellaneous services and amusements, followed by government, politics and organizations. As we reported this summer, direct-to-consumer and back-to-school ads were propelling the comeback, supported by digital’s increased role in OOH media buys. That said, it should be noted that digital’s specific role in revitalizing outdoor ads remains nebulous. Out of Home’s Moment of ‘Resilience, Reinvention and Revitalization’ Digital gets credit—but how much? OAAA uses Kantar for product category and advertiser level data. However, Kantar doesn’t segment OOH media ad spend by OOH format, other than cinema, so the trade organization doesn’t break out reported data for DOOH. “However, the DOOH format is used by a wide variety of advertisers who are looking to maximize immediacy and flexibility with ad message placement and rotation,” Nicklin said. “The industry experienced heavier reliance on the flexibility of DOOH during the pandemic as brands looked to respond to varied public health conditions in specific markets across the U.S.” To get a sense of digital’s impact on outdoor ads, initial results from the DPAA’s Digital Out of Home Thought Leadership Study found that 81% of advertisers say they’ll recommend DOOH as part of their media plans within the next 12 months. The study was conducted by ad tech industry researcher Advertiser Perceptions and sponsored by WPP GroupM’s omnichannel unit, Xaxis. “We believe there is a direct link between the enthusiasm for DOOH and the fact that it has become an increasingly addressable and flexible medium that drives measurable outcomes for marketers,” said Roey Franco, VP of product and innovation at Xaxis. “As it makes its way into new places and spaces, programmatic DOOH connects the consumer’s entire digital and physical journey.” Outdoor holiday forecast The OOH industry, like most parts of the advertising sector, remains optimistic about the upcoming holiday season. Nicklin outlined a few key reasons for the industry’s sanguine mood. He pointed to three Harris Poll research studies OAAA has conducted over the past year, which have consistently shown consumers are noticing OOH ads now more than ever before. The latest Spring 2021 study found 41% of adult consumers 18+ reported noticing OOH ads more than pre-pandemic, and the increased notice rate jumped to 59% in urban cities with populations of one million or more. The vast majority of retail sales continue to be made in brick and mortar locations, but OOH also occupies a unique and enviable position as an accelerant for digital commerce.Steve Nicklin, SVP, marketing and analytics, OAAA “The pandemic drove additional retail business online and recent McKinsey research shows credit and debit card retail-oriented transactions grew from about 19% of total in the year before the pandemic to an average of 26% of total for the first six months of 2021,” Nicklin said. “The vast majority of retail sales continue to be made in brick and mortar locations, but OOH also occupies a unique and enviable position as an accelerant for digital commerce.” According to Nielsen, OOH drives online activation more efficiently than TV, radio, print or even banners ads, based on ad dollar investment, he said. Conversely, consumers are “definitely experiencing” digital device fatigue, Nicklin noted. The latest OAAA/Harris Poll research revealed 65% of adult consumers over 18-years-old are often tuning out digital device ads, and 45% report actively trying to reduce time spend with digital devices. OOH Publishers Are Embracing Content Strategies That Get People to Look Up Interpublic Group media investment unit Magna has forecast that OOH will be the second fastest growing ad channel in 2021, with a projected annual increase of 10.4%. “We haven’t seen any data that makes us question their projection, so we’re optimistic for the holiday shopping season,” Nicklin said. “The second quarter of the year is traditionally the strongest for OOH, followed by Q4. However, with the increasing trajectory of OOH spend we’ve seen this year fueled by the economic recovery, it’s reasonable to consider that Q4 could be the strongest quarter for the industry in 2021.”