 |
                   |
Low Cost of Outdoor Advertising
Outdoor advertising offers repetitive impact at a low cost. In comparison to other advertising media, outdoor advertising delivers a lower cost per thousand of viewers reached. Not only is outdoor advertising a cost effective medium, but as a result of consolidation, it has become a much more efficient medium for advertisers to buy--i.e., an advertiser can reach a large audience with one buy.
Outdoor advertising offers repetitive impact at a low cost. In comparison to other advertising media, outdoor advertising delivers a lower cost per thousand of viewers reached. Not only is outdoor advertising a cost effective medium, but as a result of consolidation, it has become a much more efficient medium for advertisers to buy--i.e., an advertiser can reach a large audience with one buy.
Industry Growth
Outdoor advertising today is a dynamic growth industry, as more and more advertisers turn to outdoor as a significant part of their media strategies. Billed as an "eye-popping revival" by Fortune magazine, the renaissance in the outdoor industry has seen revenue increase at an average rate of 7.9 percent per year since 1992. Total revenue, which was at $2 billion as recently as 1987, reached $5.2 billion in 2000, an increase of 8.3 percent over 1999.
Source: OAAA & Salomon Smith Barney
Favorable Trends
The increasing appreciation among advertisers of outdoor's effectiveness can be attributed to several factors, but three important media and advertising trends have played a key role. First, many analysts have pointed to the fragmentation of the television medium and a complementary erosion of TV advertising value. Second, advertisers have begun to place increasing emphasis on the importance of media-mixing in brand development, and outdoor provides an ideal format for complementing messages placed through other media. Most importantly, current advertising practices emphasize continuous presence and "recency" over mere frequency of impressions, and outdoor is unsurpassed in its ability to supply both. As consultant Erwin Ephron notes, "Recency suggests much of advertising works by just 'being there' for people who are in the market, and that is embarrassingly close to being a commercial for outdoor. When the campaign is running the brand name is there all the time."
Increased Automobile Usage
Changes in the way Americans live have also contributed to the rise of outdoor advertising. Today's Americans split their media time between TV, print, the VCR and the Internet. They stay home less and are on the road more. Since 1970, the demographics of the automobile have changed radically:
Diversity of Advertisers
Top 10 Outdoor Advertising Categories
(% of 2000 revenues)
Outdoor advertising today is a dynamic growth industry, as more and more advertisers turn to outdoor as a significant part of their media strategies. Billed as an "eye-popping revival" by Fortune magazine, the renaissance in the outdoor industry has seen revenue increase at an average rate of 7.9 percent per year since 1992. Total revenue, which was at $2 billion as recently as 1987, reached $5.2 billion in 2000, an increase of 8.3 percent over 1999.
Source: OAAA & Salomon Smith Barney
Favorable Trends
The increasing appreciation among advertisers of outdoor's effectiveness can be attributed to several factors, but three important media and advertising trends have played a key role. First, many analysts have pointed to the fragmentation of the television medium and a complementary erosion of TV advertising value. Second, advertisers have begun to place increasing emphasis on the importance of media-mixing in brand development, and outdoor provides an ideal format for complementing messages placed through other media. Most importantly, current advertising practices emphasize continuous presence and "recency" over mere frequency of impressions, and outdoor is unsurpassed in its ability to supply both. As consultant Erwin Ephron notes, "Recency suggests much of advertising works by just 'being there' for people who are in the market, and that is embarrassingly close to being a commercial for outdoor. When the campaign is running the brand name is there all the time."
Increased Automobile Usage
Changes in the way Americans live have also contributed to the rise of outdoor advertising. Today's Americans split their media time between TV, print, the VCR and the Internet. They stay home less and are on the road more. Since 1970, the demographics of the automobile have changed radically:
- The number of vehicles on the road have increased 147%.
- The number of automobiles per household has increased by 53%.
- The number of daily vehicle trips has increased by 102%.
- The amount daily miles traveled has increased by 110%.
Diversity of Advertisers
Top 10 Outdoor Advertising Categories
(% of 2000 revenues)
| Local Services & Amusements | 13.2 |
| Retail | 10.6 |
| Public Transportation, Hotels, & Resorts | 9.4 |
| Media Advertising | 8.5 |
| Restaurants | 7.1 |
| Automotive Dealers & Services | 6.1 |
| Automotive, Auto Accessories & Equipment | 5.0 |
| Insurance & Real Estate | 4.8 |
| Telecommunications | 4.7 |
| Financial | 4.6 |
Source: OAAA |