Outdoor “Holds It’s Own” in the Face Of Traditional Media Decline

Ad spending was down on most traditional media in the first quarter of this year, but Outdoor was performing “better than most other traditional media”, and even maintained positive growth, says OAAA’s weekly newsletter Outdoor Outlook, citng Robert Coen’s July 2008 report on advertising expenditures. (OAAA is Outdoor Advertising Association of America, Inc. – NU).

First Quarter 2008
National Medium Percent Change
Outdoor. . . . . . . . . . . . . . . . . . . . . 3.0
Network TV. . . . . . . . . . . . . . . . . .Flat
Magazines . . . . . . . . . . . . . . . . . .-1.5
Spot TV. . . . . . . . . . . . . . . . . . . . -3.0
Newspapers. . . . . . . . . . . . . . . . -9.5
Spot Radio . . . . . . . . . . . . . . . . .-11.0
(Source: Outdoor Outlook)

“Among the hardest hit media forms is newspaper,” writes Outdoor Outlook. “Forbes recently reported daily newspaper circulation fell four percent in the first quarter of this year “and the slide is picking up speed.””

“The Audit Bureau of Circulation has released circulation figures on the nation’s top 20 newspapers, and the overall news isn’t good. Prominent newspapers with declining circulation include: The New York Times, down 3.9 percent (and Sunday is slipping even faster, by nine percent); Los Angeles Times, down 5.1 percent; The Atlanta Journal-Constitution, down 8.5 percent; The Dallas Morning News, down 10.6 percent; and The Washington Post off 2.6 percent. Second quarter results are not expected to be better,” reports Jeff Golimowski in Outdoor Outlook.

Despite the sharp rises in oil price, Out-of-home’s reach and frequency have remained “virtually unchanged”–even as consumers react to high fuel prices by driving and flying less, the OAAA asserted in an official statement. “Regardless of gas prices, most Americans still have to go to work, prompting many to turn to public transportation, which offers equivalent exposure to out-of-home media via buses, subways and commuter rail,” says OAAA.

MediaDailyNews reported that the industry organization (OAAA) “was rebutting an annual report from Vernonis Suhler Stevenson and PQ Media, which found that time spent with out-of-home media slipped in 2008, blaming high gas prices for the decline.”

“Virtually alone among traditional media, out-of-home advertising enjoyed a string of strong years from 2002-2007, frequently posting revenue growth in the high single digits–but the rate of growth slowed to a more modest 3% in the first quarter of 2008, compared to the 8% growth rate in the first quarter of 2007,” writes MediaDailyNews.

“But VSS remains positive about out-of-home advertising, forecasting a cumulative annual growth rate of 10.3% through 2012. At this clip, out-of-home ad revenues should rise from $7.9 billion in 2007 to $12.9 billion in 2012. That’s more than double the projected growth rate for advertising in general, which VSS pegs at 4.3% per year through 2012,” concludes MediaDailyNews.

I would add that factors benefiting Outdoor advertising include:

- Fragmentation of network TV and the growing confusion about how to measure its efficiency. With TV fragmented and newspaper readership shrinking, Outdoor is the only medium allowing marketers to reach mass audiences efficiently.

- Exodus of audiences from traditional radio to satellite radio, ipods and internet (prompts local advertisers to consider Outdoor).

- Competition to newspapers from online media (prompts local advertisers to consider Outdoor).

- The recent ruling by the US Court of Appeals to allow cable TV networks to sell a centralized DVR service that will make ad-skipping “available to many more people, faster, and less expensively,” as Tom Rutledge, COO of CableVision, explained it to Hollywood Reporter.

- The continuing conversion of static billboards to digital, spurred by the last year’s US legislation easing restrictions on digital billboards. Digital billboards allow media owners to place more ads on the same face, change them faster, attract more attention with full motion ads, target ads more precisely and provide more accountability to advertisers.

Add comment September 1st, 2008