OOH: Poised for another strong year

Sixth straight year of growth thanks to unique way it reaches people

Of all traditional media, out of home is best positioned to thrive over the long term.

It held up well through the recession. But even more critically, it’s posted gains amidst the rise of digital advertising that’s become a real threat to other traditional media, including print, radio and, most recently, television.

That’s because there’s no other media option that can take the place of out of home.

People can read newspaper articles on their iPads, listen to music on Spotify, and watch TV shows through their Rokus.

But there’s no substitute for an ad on the side of a bus or a billboard alongside a highway. These formats may be digitized, but they’re still at their core OOH, and their unique ability to reach people on the go will continue to drive ad spending in 2016.

Media Life expects a 4 to 6 percent gain in advertising dollars this year, based on conversations with and input from media buyers and media analysts. This will mark the sixth straight year of gains for OOH, something no other traditional media can claim.

Over the next few years, OOH’s share of total ad spending will also likely rise, as shares for other traditional media, such as print and television, shrink

This is thanks in large part to strong growth in digital out of home advertising, which has been tracking in the double digits.

For example, the number of digital billboards and screens at malls and doctor’s offices have exploded. The ability to swap advertisers in and out with the push of the button has increased the availability of inventory, and these channels can also be sold programmatically, another important factor in future growth.

Meanwhile, advertisers clamoring for better-targeted ads based on big data will also turn to OOH as measurement improves.

TAB recently introduced a new measurement program that will incorporate more of that big data. Measurement has long been seen as a weakness for OOH, and it has a ways to go in this area. But buyers are encouraged by the progress they’ve seen in recent years.

Finally, out of home has won over the very top advertisers.

McDonald’s, Geico and Verizon, all among the top 100 overall advertisers, led spending on OOH in 2014, and they continued to invest heavily in 2015, despite pulling back on other media.

Advertising Expenditures

Out Of Home

2010-2016 ($ Millions)

          Year           Billboards          Other OOH         Total OOH

   2010         $2,644                    $4,259               $6,902

  2011          $2,733                    $4,557                $7,279

   2012          $2,805                   $4,784                $7,279

   2013          $2,903                   $5,024                $7,926

   2014          $2,990                   $5,275                 $8,265

   2015          $3,109                    $5,485                 $8,595

  2016           $3,234                   $5,705                  $8,939

Source: Media Life