• by Erik Sass , December 12, 2006

It's been a great year for out-of-home advertising. Revenue rose 8.6% in the first nine months of 2006 compared to the same period last year, and it now tops $5.1 billion. That's well above the ad-industry average in percentage growth terms. As Stephen Freitas, president of the Outdoor Advertising Association of America, notes: "Out-of-home remains the second-fastest-growing ad segment behind the Internet."

Among category leaders within out-of-home advertising, local services and amusements is the leader, with a 24.7% increase over the first nine months of last year. Insurance and real estate were up 25.4%, and communications was up 24.9%. Freitas attributes much of the growth in the latter category to increasing competition between telecommunications providers.

Tellingly, automotive advertising was one of the few categories to see declines in spending on a year-over-year basis. In the first nine months of 2006, spending for auto dealers and services declined 0.7%, and auto accessories was down 7.8%.

While out-of-home advertising parallels the Internet in some categories--picking up new money at the expense of other "traditional" media like newspapers--auto advertising is not one of them.

In quarterly terms, third-quarter revenue was up 9.25% over the same period last year, topping $1.6 billion. Summer is traditionally the strongest period for outdoor ad spending, which tends to vary by season. Winter is the weakest season, so percentage growth numbers are likely to dip in the coming months.

Overall, nothing stands in the way of the growth trend that began in 2003. Outdoor advertising has enjoyed three years of growth on a year-over-year basis, with a 5.2% increase in 2003, a 6% increase in 2004 and an 8% increase in 2005. With at least an 8% growth forecast for 2006, prospects for 2007 are looking good.