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10 (Really Popular) Things Out of Home Advertising Is Growing Faster Than and Why

Here’s How You Can Tell How Successful OOH is Right Now

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10 (Really Popular) Things Out of Home Advertising Is Growing Faster Than and Why

 

 

by Gino Sesto, Founder, Dash Two

 

 

 

If you follow the U.S. economy, you know that the torrid pace of growth of recent years has begun to slow, to the point where our tax cut-loving president is considering a payroll tax cut to get things moving again.

But you won’t see that type of slowdown in out of home. In fact, things have never been better for the different sectors of advertising that fall under the outdoor umbrella. New numbers from the Outdoor Advertising Association of America show that OOH hit its highest growth rate in a decade during second quarter of this year.

Spending rose 7.7 percent, its best quarterly rate since 2007. Year to date, ad revenue for out of home has risen 7 percent, which puts it well above all other traditional media.

But just throwing out those numbers doesn’t really put this in perspective, does it? Here’s how you can tell how successful OOH is right now: By comparing it to other industries and American cultural touch-points. So here are 10 things outdoor advertising is growing faster than right now — and why that’s happening.

 

  1. Television Advertising

TV advertising has been struggling for some time. While digital ads may have zapped the momentum of the print industry first, over time television has taken on some of that suffering. Digital ads are cheaper and easier to target than TV.

During second quarter, television advertising was flat, with broadcast down 1 percent and cable up 1 percent. A lot of people have stopped watching traditional TV. But they haven’t stopped going outside, which is why out of home advertising will continue to thrive while this traditional medium slows down.

 

  1. Radio Advertising

Radio has had an even bumpier time than TV. Competitors like Spotify and Pandora offer the same services as terrestrial radio but without the commercials, a major selling point of those companies. And while digital radio has come a long way, it’s still an outlier. People just don’t think of listening to traditional radio on their digital devices, and, let’s face it, they’re always on their digital devices.

This has led to a slowdown in radio advertising. Year to date, most of the big radio companies have seen ad revenue decline, and local advertising has been particularly hard hit. Out of home doesn’t suffer like that because people won’t stop using it. Billboards along highways will always be seen.

 

  1. Netflix

Netflix is still the 800-pound gorilla of the streaming industry, but it’s losing share in the over-the-top video wars. Gone are the days when Netflix would add tens of millions of new subscribers each quarter. Now that the service has been around for a while, it’s facing two big problems:

  • Stronger competition: Apple and Disney both have premium streaming services about to launch that will undoubtedly pull people away
  • Less shiny newness: Remember when “Orange Is the New Black” and “House of Cards” were all anyone talked about? No longer. It’s been a while since the streamer had the “it” show that made people feel they needed to get the service.

Billboards never have this problem. There’s really no competition on the roads, and you can put up creative new billboards to draw attention every few months.

 

  1. HBO

Guess what happened after “Game of Thrones” ended? Lots of people dropped the premium cable service. Building your brand on a single thing is dangerous. By contrast, out of home covers many different facets, including everything from transit to wild posting.

 

  1. Hulu

With shows like “The Handmaid’s Tale,” the first streaming program to win a best drama Emmy, Hulu has been the fastest-growing streamer the past couple years. But in 2019, its growth rate was half what it was the year before. Clearly things are slowing down for Hulu because it’s difficult to sustain such rapid expansion. A slow-and-steady rate, like OOH has enjoyed, is much more feasible in the long term.

 

  1. Amazon

In first quarter, Amazon had its slowest revenue growth in four years. Why? It’s facing greater competition for online sales, for sure. Everyone from Walmart to Office Depot is targeting the biggest online retailer, and greater competition can make it harder to grow. The OOH business doesn’t face those tailwinds.

TV has always been the dominant advertising source, but it has been surpassed by digital. That leaves OOH in the “slow and steady” growth category, which is a good place to be when analysts are worried about a recession.

 

  1. Global Economy

recent study from very smart people projects that climate change will impact worldwide economic growth, with GDP per-capita gains plummeting in major economies such as China and the United States. OOH just doesn’t experience those types of slowdowns. Top advertisers include some of the nation’s biggest and most successful companies, like McDonald’s and Apple.

 

  1. Apple

Speaking of the world’s most prolific tech device company, Apple’s weathered a few rough quarters. The company had to cut its revenue outlook to start 2019, the first time that’s happened since 10 years before the introduction of the iPhone. It also had its first holiday season sales slowdown since Tim Cook ascended to CEO in 2011. You’ll see no such rough patches for OOH, which has upheld remarkably consistent growth for the past decade.

 

  1. Fortnite

Remember how you couldn’t pull your kids off Fortnite last year? This year they’re, like, so over it, with playing time and participants for the Epic Games diversion both down. That’s what happens with fads. OOH isn’t a fad — it’s been around for hundreds of years and counting.

 

  1. Facebook

The world’s biggest social networking site has come under fire for everything from stoking the fake news flames to failing to properly police trolls. That backlash has prompted its once-bulletproof revenue model to decelerate. During second quarter, ad growth slowed significantly, and forecasters say that will continue through 2020.

There are no Russian trolls dogging OOH, and we’ve never noticed fake news on a billboard. Just saying.

 

 

Outdoor AdvertisingBillboards

 

 

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