The Elephant in the Room
OOH'S SOB of an Issue
The Elephant in the Room
by Brent Baer, publisher, OOH Today
We are going to start this post with updates by Lamar CEO, Sean Reilly. In a guidance update, Reilly says Lamar is cutting spending on new digital displays, freezing hiring and reevaluating planned shareholder dividends among many steps they are taking. Lamar is cutting cap ex by more than 50%, freezing hiring, (no layoffs, that’s great thing) suspending acquisitions and discussing relief from airport and transit partners.
Still no vehicular traffic or impression statements.
But what Sean Reilly is not saying, as no other OOH executives are to date either, (and it is not an oversight) is the obvious elephant in the room, because of the virus, vehicular traffic is drastically down. Hence, OOH impressions are down. It is all because of the uncertainty caused by the coronavirus pandemic. We are not singling out Lamar or Sean Reilly. In fact, we like and respect his candor and frequency of communication. We would like a little more of it from Sean and considerably more from the other CEO’s of the OOH Industry.
What about vehicular traffic/impressions?
Traffic reduction has taken a toll on all OOH companies and the entire economy. Advertisers are cancelling campaigns because they recognize John and Jane Q buying public are unable to leave their homes or drive anywhere. If traffic were anywhere near pre- Corona Crisis levels the impact would not be as great. Why isn’t anyone in the OOH owner operator side of our business stepping up and addressing the obvious?
Our traffic/impressions are at a fractional proportion of the past. What will it take to actually identify what those numbers are? We are hearing nothing from Geopath, but let’s face it, if Sean Reilly and any of the other OOH Owner Operators or Agency heads are not discussing traffic explicitly, how in the heck is Geopath going to take a lead in sharing that information? Muzzled? How can that not be the case? Has anyone heard or read any requests for traffic impressions from the Big 5 OOH Agency Services players?
We did not cause the problem. Ignoring it will not make it go away or fix it. It is an SOB of an issue.
COVID-19 is putting a big hurt on OOH business and that is an understatement. It is not just that business is off today. No one has any idea when it will end and we might see some return to normal life.
In a non-scientific poll yesterday, I asked nearly 20 OOH professionals their predictions on when we will see the economy return. The answers varied from May to October. Many of those responses were without conviction as similarly was mine. Nobody knows. It is not surprising that companies are taking dramatic actions to maintain the health of their companies.
Any comparisons to past economic downturns like the great depression, the dot com collapse, 9-11 or the financial crisis of ’08, doesn’t hold water. In those crises, we were not directed to shelter in place. Cars did not come off the roads. OOH impressions were not on hiatus. It is nice to hear the stories of comeback, but it’s a whole new business environment. As someone said earlier this week, there is no playbook to reference.
When I hear the naive optimism quoting the historical importance to continue to advertise during a down economy, it offers no real encouragement, because the past which is referenced, did not witness the Country wide shut down of travel and commerce. Those brands which continued to advertise in tough economies may have done better but at least they had some cars on the roads.
Since the OOH Owners still aren’t discussing traffic or what appears to be permitting Geopath to release any new ‘counts’, we can only rely on OOH Industry unvetted groups’ data. Which begs the question: If the ‘other data’ providers are so good to consider now, where were they before? But that is assuming we really need data to tell us the obvious which appears OOH Today is the only one talking honestly about, which asks and answers: Is OOH traffic really significantly down?
Our empirical response is simple with these 3 questions.
- Who has left there house to go to work the last three weeks?
- Who has driven out to see their typical rush hour routes to verify indeed the streets are empty?
- Who is following the cost of oil and its historic pricing, free fall because their is no demand for fuel.
There is little to no vehicular traffic.
A friend suggest to me yesterday, the Industry is in an uproar because OOH Today has been rather relentless in our pursuit for transparency and leadership during this crisis. While flattering, I don’t think so. We reminded them we did not start the coronavirus nor take the cars off the road. We are conveying the message and we understand it’s easy to shoot the messenger, but the message stays the same. The traffic/impressions are down. Big time down.
Let’s put this issue behind us by recognizing traffic is down, share the data, clear that slate and then on to figure out how to beat it. Not the coronavirus but the substantial reduction in traffic as a problem and how we can still remain viable. It is a tough assignment. Some one asked me about easy solutions earlier this week. There are no easy solutions.
We are optimistic but realistic.
OOH has some very bright people. I don’t know how many of them are allowed to speak or given the opportunity to offer solutions. We have heard of a few sales successes in this difficult time. Selling space is possible. Let’s, for just a few minutes, listen and discuss honestly, then roll up our sleeves and work, for hours.
The 82 second video by Detroit ad agency Doner, is truly inspiring! Do yourself a favor and give it a listen.
Here is a brief article from The Advocate on Lamar’s new plans through the year in light of the coronavirus crisis.⇒ Lamar cutting billboard spending, reevaluating dividends, freezes hiring in reaction to coronavirus. There is an unavoidable absence of the obvious, which is explicitly recognizing and addressing vehicular traffic is drastically low.