Out-​of-​Home Ad Growth Continues

Several major research shops have pointed to a slowing revenue picture for the ad industry in 2012. However, the out-​of-​home channel is continuing to grow. To explain the growth, industry experts point to the effectiveness of the channel as well as heavily-​contested political elections.

In the 1st half of 2012, marketers paid $3.486 billion for out-​of-​home messaging, a 4.4% increase over the same period a year earlier. Top categories for outdoor advertising expenditures, and the change from the previous year, include:

  • Miscellaneous services and amusements: $644 (million) (+9%)
  • Media & advertising: $338 (+3.5%)
  • Retail: $302 (+16.1%)
  • Transportation, hotel, restaurants: $283 (+5.9%)
  • Financial: $250 (-6.1%)

Not surprisingly, spending by political organizations has increased 10% during the first half of this year and stands at $166 million.  And, in the 2nd quarter of this year, auto dealers and services returned as one of the top 10 advertisers in the out-​of-​home market with a quarterly spending level of $81.7 million which is an 11.3% increase over the same period last year.

Billboards continue to dominate the industry, accounting for 65% of revenue. Transit (17%), street furniture (6%), and place-​based digital (12%) comprise the rest of marketer placements. Over the past decade, the out-​of-​home channel has increased its take of the marketing pie from 3% to 5%. Nancy Fletcher, president and CEO of the Outdoor Advertising Association of America (OAAA) believes this is because out-​of-​home is the "ultimate advertising vehicle for disrupting and engaging."

If spending continues at this level, the industry will surpass last year’s growth rate which came in at 4.0%.

[Sources: Out of Home Advertising. Oaaa​.org. 22 Aug. 2012. Web. 12 Sept. 2012; Immersing Consumers in OOH. adweek​.com. 30 Apr. 2012. Web. 12 Sept. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.