Outdoor Ad Demand Continues To Build

by Erik Sass, Jun 20, 2006, 8:00 AM

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Outdoor ad spending posted another month of strong year-over-year growth in April, with total revenue 12.7 percent higher than 2005, according to estimates released Monday by the Outdoor Advertising Association of America (OAAA). The OAAA only recently began releasing monthly data, compiled by Miller, Kaplan, Arase & Co., to tout industry growth. As in a previous report for March posting 11.4 percent growth, some of the upswing is cyclical, according to Freitas--who earlier said that "summer tends to be the real boom period."

Even so, outdoor is posting remarkable long-term gains too: "Every month it's gone up and up and up, and I think you'll tend to see that trend continue... the rate of growth is accelerating faster than we predicted." Forecasting again, Freitas said: "I wouldn't be surprised if by third quarter we're seeing a 10 percent cumulative growth for the year... second quarter we're hoping for around 11 percent total growth over 2005."

In part that's because of increasing interest from national advertisers, Freitas said, who are now willing to consider outdoor "not as a support medium but as a primary vehicle." The surge in outdoor is related to structural issues that dominate discussion in the ad world today, including ad clutter, increasing consumer mobility, and the desirability of the workday day-part, all of which outdoor claims to address. "It's a way of reaching people who are very active, very mobile, and hard to reach with the traditional media," Freitas asserted. "Advertisers are realizing out-of-home does intersect with people through the whole day."

Among new national advertisers, "an interesting case study currently on the street is 1-800-Flowers," Freitas said. "They were really doing nothing with out-of-home or other traditional media until three years ago--all their spending was on the Internet. But since then they've moved 70 percent from the Internet pretty much exclusively to the outdoor medium."

The growing ability of consumers to respond to effective messaging from public spaces using mobile devices may be another reason driving Outdoor's success: "I think there's more and more interest in the medium to engage people during key activities... With mobile devices you can close the loop much faster."

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