Digital Screens energize Outdoor Media.

Reaching consumers on the go

Outdoor advertising, like most other media, is feeling the sting of the economic downturn. According to the Outdoor Advertising Association of America, US outdoor advertising spending declined 4% in 2008 after years of steady growth.

In its “Communications Industry Forecast 2003–2013,” Veronis Suhler Stevenson and PQ Media projected that out-of-home media spending will reach $7.7 billion this year, down 4.9% from 2008.

Traditional elements, such as billboards and static transit ads, still account for the majority of outdoor advertising revenues, but a smaller subsegment—digital out-of-home—is on the rise. Over the next few years digital out-of-home advertising spending is projected to grow faster than its traditional counterparts and will be the driving force behind any gains made in the outdoor sector this year.

PQ Media expects alternative out-of-home, which includes digital video screens and digital billboards, to grow 9.1% to $2.65 billion this year. Alternative out-of-home will account for 27% of total outdoor revenues in 2009.

A key benefit of digital out-of-home is its ability to reach on-the-go consumers. According to January–February 2009 data from Arbitron, the most common locations where consumers see digital display screens are shopping malls, grocery stores and large retail locations. Other places include restaurants, movie theaters, health clubs and gas stations.

When incorporated into existing campaigns, digital elements give advertisers an opportunity to reach consumers closer to the point of sale. The right message displayed at just the right time has the potential to influence a consumer’s purchases while in the store.

Other benefits of digital billboards are quick updates, accommodation of multiple advertisers and greater profitability than static ones. In its “Global Entertainment and Media Outlook 2009–2013,” PricewaterhouseCoopers noted, “A digital billboard that shows sequential ads that change every 8 to 10 seconds can generate 10 times the revenue of a poster that displays a single ad.”

Out-of-home ad networks are working on new tactics to keep their business growing during today’s challenging economic times. Some are adding mobile platforms to extend their reach and build their consumer databases. In July 2009, Adweek reported that digital out-of-home ad network Outcast delivered more than 30 million SMS coupons for its clients since March 2008. According to Outcast, the redemption rate has been more than 25%.

While growth for the total outdoor advertising sector is not expected this year, the digital components are expected to drive the sector back into revenue gains as early as 2010, according to PwC. As networks launch new ways to combine media and incorporate digital screens into marketer’s campaigns, outdoor advertising will once again thrive.

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