• by Erik Sass  @eriksass1, March 28, 2006

In keeping with established seasonal fluctuation, outdoor advertising revenue growth slowed in January 2006 compared to the previous quarter, according to a report released by the Outdoor Advertising Association of America (OAAA) on Monday. But early calculations from industry analyst Miller, Kaplan, Arase & Co., LLP suggest a 6.5 percent growth rate for February, according to Stephen Freitas, chief marketing officer for the OAAA--meaning that outdoor could likely rebound.

The OAAA's first monthly revenue report states that outdoor advertising revenue grew 4.2 percent in January 2006 over the same time period in 2005. This represents a decrease from a quarterly growth rate of 8.2 percent in fourth-quarter 2005--but compares favorably with first-quarter 2005, when revenue grew only 2.9 percent compared with first-quarter 2004.

Freitas explained that outdoor advertising is subject to strong seasonal variations because winter weather keeps a large part of its audience indoors: "That's typically the case with out-of-home advertising. January tends to be the slowest time, and summer tends to be the real boom period." Freitas pointed to Miller-Kaplan's preliminary calculation of 6.5 percent growth in February 2006 over February 2005, as evidence of continuing shifts in keeping with the seasonal pattern.

Overall outdoor ad revenue grew at a brisk pace in 2005, accelerating as the year went on--in part because of entertainment advertising, including movie and TV promotions, and heavy competition between telecommunications providers. After a slow start, with revenue for first-quarter 2005 increasing only 2.9 percent over first-quarter 2004, the industry surged to 7.9 percent total growth in the first three quarters--including a remarkable 10 percent growth rate in the third quarter alone.

If the outdoor industry matches 2005's 8 percent overall annual growth rate, 2006 revenue could top $6.8 billion by year's end.