Two years ago, when the outdoor-advertising industry finally introduced its long-delayed plan to allow advertisers to measure the demographics of outdoor advertising, executives were bullish on its effect.
"This is a perfect time for our medium to invest in infrastructure. We have an opportunity to grow faster than any other medium," Joe Philport, president-CEO of the Traffic Audit Bureau, said at a 2008 Ad Club event. The TAB, which measures out-of-home advertising, launched the "Eyes On" metric in 2009 in an effort to make outdoor measurement more comparable to other media.
Today out-of-home spending is up -- 4.1% in 2010, according to the Outdoor Advertising Association of America. But don't thank new metrics for that.
The economy is more likely to credit for the rebound in ad revenue, up to $6.1 billion in 2010, as long-time out-of-home ad categories such as financial and government upped spending. When it comes to the new metrics, the switch hasn't flipped yet among most advertisers.
A huge learning curve remains among ad buyers, planners and sellers, who have yet to fully integrate the new metrics into their planning tools. Additionally, there's a lack of urgency among many large outdoor advertisers -- legacy clients say they don't need the more granular measurement to know which billboards work best.
So as the outdoor-ad industry descends upon Miami this week for the OAAA's annual confab, the industry's top buyers and sellers will debate the progress and next steps for advancing outdoor's role in advertisers' media mixes.
More than a decade in the making, Eyes On is a buying-and-planning tool that allows advertisers to measure the likelihood their ads will be seen by specific demographics. The previous tool was the old Daily Effective Circulation metric, which measured the total audience that had the opportunity to see an ad. In effect, Eyes On allows billboards, street furniture and other out-of-home platforms to be measured on a comparable basis to media including TV, digital, radio and print, which is crucial to attract major spending from consumer-packaged goods brands, one of the sector's most untapped marketing categories.
Rocky Sisson, exec VP-sales and marketing for Clear Channel Outdoor, said clients and sellers alike are still being educated on the opportunities and predicts that the industry will fully convert by 2012. Plus, Eyes On was just recently integrated into Nielsen's IMS planning tool, which will bring more business-development opportunities to the industry.
"We've always known how many people go by our boards, but we haven't known who they are," he said. "There are clients who just haven't used the industry because of that. Every board has a story. We're finding out new things about our inventory with ethnic targeting, psychographics and ethnographics. A lot of these boards might not have a huge, mass audience but the index they're targeting is really strong."
For some advertisers, measurement has been more intuitive than precise. "There are some clients who need Eyes On because it integrates seamlessly to a broadcast plan. But for others, they'll say, 'I've been buying the same 10 boards for years and those 10 boards work for me. Eyes On doesn't mean anything,'" said Howard Grenier, president of Nashville's Buntin Out-of-Home Media.
Restaurant chain Cracker Barrel Old Country Store has long subscribed to a more-contextual approach to outdoor, and is being awarded the OAAA's National Obie Hall of Fame Award this week for making outdoor the key driver of its advertising strategy for over 30 years. When the restaurant started working with Buntin Out-of-Home as its agency of record in 1979, roadside billboards advertising the nearest Cracker Barrel from the interstate helped drive traffic to the chain.
"It was one of the first times we were able to see how outdoor contributes to sales," Mr. Grenier said. "I think the goal for Eyes On is to help other clients figure out how to cancel out all the other noise in a market. As soon as that's done, you can go right back to how it moves the needle."
If that's the industry's common goal for Eyes On, the execution among agencies and sellers still varies, said Connie Garrido, CEO of Aegis Media's Posterscope. "I don't think we're singing from the same song sheet. A lot of that is a factor of self-application, where everyone's asking, 'How does it affect me?' And depending on who you are, it affects you differently. And when we were talking about it [with the OAAA and the TAB], we found that there wasn't anything we could refer to that was kind of concise and explained the process."
COMMENTARY: I was consulting for an OOH advertising network startup before the The Digital Place-based Advertising Association (DPAA) adopted OOH advertising Audience Measurement Guideliens. Even today, OOH advertising networks use some of their own measurement standards. To say the least, it was quite challenging to develop a quantitative model for estimating advertising revenues based on impressions, as is customary in cable and network television. Traffic patterns vary widely throughout the day, between locations and there is no reliable reliable way of counting eyeballs fixed on a OOH display.
I can't say that I feel comfortable with the Traffic Advertising Bureau's "Eyes On" measurement metrics which treats digital OOH advertising on an equal footing with television and radio. I know of technology that apparently knows when your eyes are focused on a digital display, but I don't think that it has been universally adopted by the digital OOH networks.
According to a preliminary outlook by PQ Media CEO Patrick Quinn at the Customer Engagement Technology World show, digital out-of-home (OOH) advertising spending, including digital place-based networks, billboards and signage, grew 14.9% in the first half of 2010 and is on pace to grow 14.8% for the full year to $2.07 billion,
PQ Media breaks down the digital OOH industry by two major platform segments and six venue/location categories:
- Digital place-based networks integrating entertainment and/or informational programming in venues such as cinema, retail, office, entertainment and transit.
- Digital billboards and signage communicating primarily advertising messages through LED or LCD screens, to showcase multiple brands at locations including roadside, transit, entertainment and retail.
Spending on U.S. digital place-based networks, the larger of the two platforms, grew 13.7% in the first half of 2010 and is accelerating in the second half, fueled by double-digit growth in four of the five venue categories, including the largest, cinema, and the fastest-growing, office, as well as entertainment and transit, according to the study.
Retail is pacing for high single-digit growth for the full year after posting the only decline among the five major categories in 2009. Total digital place-based network spending is expected to increase 14.0% to $1.53 billion for full-year 2010, following a 0.9% decline last year.
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Digital Out-of-Home Ad Spending (USD, 2010) |
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|
|
% Change |
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|
|
First Half 2010 Spend |
Full Year 2010 Est. Spend |
Full Year 2010 Est. $ |
|
Digital Place-based Networks |
13.7% |
14.0% |
$1.53 billion |
|
Digital Billboard and Signage |
18.2% |
17.2% |
$541 million |
|
Total Digital Out-of-Home |
14.9% |
14.8% |
$2.07 billion |
|
Source: PQ Media, December 2008 |
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Digital billboard and signage spending jumped 18.2% in the first half of this year and is trending for full-year 2010 growth of 17.2% driven by double-digit growth in three of the four location categories:
- The largest and fastest-growing, roadside
- Then transit and entertainment
- Retail is pacing for mid-single-digit growth for the full year
Quinn concludes that "U.S. digital out-of-home media resumed its strong growth track in the first half of 2010 due to several key trends, including:
- Shifts in consumer behaviors
- Improved audience metrics
- More effective sales and marketing strategies
- Growth in key brand categories
- Consolidation and better scale
- New technology
He continues "... research indicates the place-based network segment, in particular, will remain in the shakeout, or consolidation, phase... through at least 2011 and likely into 2012... "
And, according to figures released by the Outdoor Advertising Association of America (OAAA) the out of home advertising industry revenue rose 7% in the third quarter of 2010 when compared with the same period in 2009, accounting for $1.44 billion, the second straight quarter of growth. Year to date, out of home advertising revenues are up 3.3% over 2009.
OAAA President and CEO Nancy Fletcher, says "... the medium is better measured... marketers are spending money again... looking for cost effective ways to reach mass audiences."
The media and financial segments helped drive the increase, says the OAAA report. The financial category spending on out of home grew by a third compared to the same period a year ago.
Revenue estimates for the third quarter include billboard, street furniture, transit, alternative, and cinema advertising spending. In the second quarter of 2010, outdoor advertising revenue grew 3.6%, per the OAAA.
For more information about digital OOH growth, please visit here, and to learn more about theOAAA forecasts, please visit here.
Courtesy of an article dated April 11, 2011 apearing in Ad Age Mediaworks and an article dated December 16, 2010 appearing in MediaPost Publications Research Briefs Blog
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