It's Time to Shift Your Advertising Budget to Outdoor Media. Here's Why and How to Do It. Why advertisers need to diversify their marketing mix or risk falling behind their competition.
By Matt O'Connor Edited by Chelsea Brown
Opinions expressed by Entrepreneur contributors are their own.
The state of advertising is experiencing massive shifts. TV impressions are shrinking, the cost of digital channels is rising, and new privacy protocols have left digital and mobile attribution in shambles. Advertisers feel the effects of this "new normal" in declining campaign performance. It's not ideal circumstances, but the situation underscores how advertisers need to diversify their marketing mix or risk falling behind their competition. Fortunately, the advertising landscape has plenty of opportunity, especially when incorporating out-of-home (OOH) advertising.
OOH, also known as outdoor advertising, includes static and digital billboards, transit wraps, wallscapes, airport advertising and street furniture ads, to name a few. OOH may be among the oldest advertising formats, but it's also experiencing a resurgence among advertisers — and increased interest from consumers. Here's why media buyers need to shift advertising budget away from broadcast and digital to OOH:
Related: 9 Good Reasons to Consider Out-of-Home Advertising
The decline of broadcast and digital advertising performance
Whether it's pertaining to TV and radio commercials or digital and mobile ads, consumers are telling advertisers the same story: "We aren't interested." With the rise of streaming services and live TV options, such as Youtube TV and Peacock, traditional TV's audience is shrinking. In fact, according to recent research, impressions have dropped by a whopping 10.2 million. Cord-cutting may be a mounting issue, but as it turns out, digital advertising has its share of issues, too.
In a recent survey, over half of respondents said they disliked online pop-ups and video advertisements. The reason? Nearly 91% of consumers stated they are more annoying, intrusive and disruptive than a few years ago. On top of that, digital advertisers are facing skyrocketing costs and falling attribution rates. Constant privacy-related changes and the upcoming death of third-party cookies are additional catalysts behind their growing dilemma.
Out-of-Home is experiencing a bold resurgence
What's old is new again, and OOH is catching the eye of both marketers and consumers like never before. In fact, in the third quarter of last year, OOH advertising revenue grew by 38%, or over $1.75 billion. And while OOH used to be seen as a branding medium, it's now a performance channel that performs on par with its broadcast and digital counterparts, but at a fraction of the cost.
OOH has been gaining momentum in recent years as other mediums wane. In fact, four out of ten consumers report that they've noticed OOH ads "much more" since the pandemic's start, according to a recent study by the Out of Home Advertising Association of America (OAAA), and nearly 85% of consumers say they find OOH ads useful.
Another factor behind OOH's gaining popularity is it allows advertisers to see outsized results for their investment. With OOH spend as low as $3.23 per thousand impressions (CPM), it's budget-friendly and efficient. Outdoor advertising indexes 5.3 times the amount of search engine activity that's expected given its relative ad spend.
In good news for advertisers, there's no need to choose between other mediums — like digital and broadcast — and outdoor. OOH plays well with others and should be leveraged into an advertiser's broader media mix to boost campaign-wide. Here are a few things to remember when getting started:
Related: 4 Tips for Designing Engaging Out-of-Home Advertising in 2022
1. Cast a wide OOH net
OOH's CPMs can vary by upwards of 20x between markets. By advertising across geographies, advertisers can get the most efficient placements for their budget. The OAAA broke this down by taking a look at one of the year's biggest advertising nights: the Super Bowl. This year, a 30-second TV spot cost $6.5 million and reached 99 million viewers. In comparison, an advertiser could cast a wider net with OOH ads in 50 of the top U.S. markets, and earn over 1 billion impressions.
2. Measure your results
In a world of data-driven advertising, measurement is crucial to the success and efficiency of any advertising campaign. Advertisers can already track traditional metrics such as impressions, reach and frequency. But by partnering with an online OOH buying platform, advertisers can also track and attribute offline and online conversions, isolate the impact of individual OOH units for optimization, measure the indirect impacts of campaigns like lifts in social media mentions and much more
3. Optimize campaigns in real time
Taking a deep dive into in-depth analytics will give advertisers a granular view of what's working, what should stay, and what should go. With this knowledge and the help of an OOH online buying platform, brands can adjust their creative, messaging, targeting and a number of other OOH campaign factors in a matter of minutes.
Related: Outdoor Advertising Is Conquering. Why Aren't You Using It?
Advertisers are being held to higher standards than ever, especially when it comes to justifying their ad spends. More specifically, they face the harsh reality of spending more of their budget on broadcast and digital channels to get results they used to achieve for far less. By allocating more of their advertising budget to OOH and diversifying their media mix, advertisers will run more balanced and effective campaigns — and reap the rewards.
