With median CPMs in the two-dollar range, digital display and out-of-home transit shelter ads), are the most cost-efficient of any major advertising media, according to a new analysis being released by the Out-of-Home Advertising Association of America (OAAA).
The analysis, which was conducted by financial advisory firm Solomon Partners, is derived from publicly traded media company Securities and Exchange Commission filings, news reports, “research and other industry sources” as of January of this year. It reveals a remarkable range of advertising costs, within mediums, as well as across the overall major media landscape (see chart above or click here to access the PDF).
With a median CPM of $46.82, print newspaper ads are the most expensive medium overall, according to the analysis, followed by prime-time broadcast TV’s median CPM of $36.00.
Interestingly, the data dispels the notion that OTT (over-the-top television) currently has the most expensive CPMs, although with a median CPM of $30, it isn’t far off. The analysis did not explicitly cover breakouts for CTV (connected TV), streaming services, etc., which are purported to also be on the high-end of ad costs, but it also dispels that other forms of digital video (desktop video at $10.64 and mobile video at $10.47) currently are among the most expensive media buys.
The report did not cover social media advertising costs.
While the release clearly establishes that out-of-home media is undervalued by Madison Avenue, it does not explicitly explain why, although industry experts have historically indicated it’s because of legacy media pricing models.
The report shows out-of-home media ranging from transit shelters on the low-end to digital place-based media buys on the high end ($7.50 median CPM).
“This research affirms out-of-home’s critical role in the media mix,” OAAA President and CEO Anna Bager said in a statement, adding: “It verifies the value that out of home brings to marketers at a time when people are not only emerging from the pandemic’s restrictions to venture out, but also noticing OOH ads more than before the crisis. Couple that with the other benefits spotlighted by Solomon Partners, and I expect to see OOH taking a bigger bite out of brands’ ad budgets.”
The Solomon report also draws on a previous analysis indicating that out-of-home media delivers “the greatest ad recall” among the major ad media.
“These benchmarking numbers clearly show that OOH provides significant return-on-investment and marketers should consider that reach-per-dollar in their media plans,” Solomon Partners Managing Director and Head of Marketing and Media/Tech Services Group Mark Boidman stated, adding: “Moreover, OOH has greatly improved its reporting and attribution accountability and, at the same time, programmatic digital out of home is skyrocketing – all appealing to today’s brands.”
Joe, as I'm sure you know, advertisers do not base their media mix decisions on CPM comparisons of this nature---using highly questionable and inflated ad "audience" stats. Outdoor has always had a seemiingly huge "cost efficiency" edge over other media but aside from questioning how many of the ad "expsures" are actually ad exposures---let alone what value such exposures may have--- the OOA folks must eventually realize that many other factors enter into the equation. The same point applies for all media---not just outdoor.
If the OOA ad sellers really want to get some consideration from the many national advertisers they are seeking support from they can start by reversing their recent decision to drop ad attentiveness measures and revert to old fashioned "boxcar" traffic counts. Next, they should provide some objective research on the actual impact that OOA has in terms of developing---or reinforcing---ad awareness and sales. The same old CPM pitch is a non-starter---we've heard it over and over again and it just doesn't fly.
It's good to see that (e) Mobile & Desktop Video has not increased in cost from 2018. Now where did I put that salt shaker.
Joe: Ed makes sound points on the use (or not?) of CPM's for buyer or sellers, especially when derived from very different basis definitions medium by medium. I have also commented on this specious chart in past years. So you really should know better than reporting on these flawed findings. At Mediacom, we always insisted our planners/buyers ask, "CPM on what basis?" The CPM's provided medium by medium were always significantly different due to different audiences, actual level of exposure measured, ad sizes, etc., etc.) and our job was to equivalize them at the highest value and most relevant level for our clients. Highest not lowest level! OOH CPM's based on "Eyes-On" (not box car traffic numbers which always were and will be heavily discounted!) were always relatively high. Bad for OOH? Absoutely not! When other media were adjusted for an Eyes-On or Ears-On equivalent for the brand's target audience, OOH CPM's would generally be very competitive and in addition OOH delivers comparatively very high Eyes-On weekly reach.
I would suggest that Mark Broidman's comments on "reach-per-dollar" when referencing a CPM chart is also flawed. Using CPMs is about driving frequency not reach, whether for OOH or any medium.
The bottom line for OOH? The creative innovations (3D!) and impact generated when using OOH formats provides brands incredible messaging opportunities. As the last truly mass medium, OOH can deliver very high weekly reach versus other media plus there is no remote to avoid OOH Ad exposure. Using GeoPath's OOH Eyes-On for a brand's target group as a basis for CPM's demands the same basis by other media platforms whose CPM's will typically rocket when "converted". As a result OOH becomes relativley cost effective. OOH unquestionably has a critical role in a brands media mix but surely not based on this research. As has been noted by many media planners. CPMs? Completley Positively Mad!
BTW: We need to be very very careful with attribution models. Their plethora of issues are well documented and may disadvantage OOH.
Ed, John: Did I get this about right?
Yes, Tony. Your point about CPMs is especially important. Even with adjusted data to reflect attentivenss, CPMs go mostly to freqency as opposed to reach. Yet almost everybody agrees that reach---real reach where the consumer actually is attentive to the ad-----is more important than frequency---at least at the outset of a branding effort.