Out of home has long been characterized as an “amplifying” medium, a way to augment and reinforce advertising in other channels. But recent developments in the advertising landscape are making clear that it’s time to start talking about Out of Home for what it actually is: the most cost-effective and brand-safe way to reach and engage audiences at scale.
Commanding 4% of ad spend in the US, it’s natural that Out of Home (OOH) has historically looked to draft off the much larger budgets of TV and digital. After all, what better way to complement the insulated digital experience of TV, online, and mobile advertising than with bold, life-sized messaging in the physical world? That logic has consistently attracted the top-spending OOH advertisers, including Amazon, McDonald’s, Apple, Geico, Google, American Express, AT&T and Disney, who spend disproportionately on OOH. In fact, prior to COVID-19, OOH recorded over 40 consecutive quarters of growth, at the same time that every other major traditional advertising channel lost share. That growth has been driven by digitization of screens and the overlay of location data that have enabled advanced audience targeting, dynamic creative executions, and attribution measurement on par with other digital media.
While the pandemic dealt a temporary blow to Out of Home, requiring people to stay inside their homes during the quarantine phase, we have already seen audiences return as cities have carefully reopened and multiple data sources show that vehicular and pedestrian activity have rebounded to pre-COVID levels, or in some cases even higher. But looking beyond the short-term effects, the current environment has underscored a number of fundamental challenges intrinsic to other major media channels, which draw a much sharper contrast with OOH, and its advantages, than ever before.
OOH vs. TV: Greater reach at lower cost
The steady fragmentation and decline of TV audiences, driven first by cable TV and then by the growth of online video, has been well-documented. The COVID-induced dearth of new content production earlier this year coupled with the explosion and quarantine-fueled adoption of subscription on-demand OTT services, has now created a perfect negative storm for TV advertising: ever-shrinking audiences on traditional TV and far fewer advertising opportunities with OTT services. Consumption of video is becoming a personalized, on-demand, interactive experience – great for consumers, but not so much for advertisers looking to drive mass exposure. Compounding these challenges are factors like ad skipping on traditional TV and fraud on CTV. Skyrocketing TV CPMs have helped the supply side preserve revenues, but the picture for the demand side hoping to achieve mass reach via TV is grainy at best.
By contrast, OOH can deliver virtually 100% reach in every DMA, at a fraction of the price. From a media planning perspective, it is the most effective way to reach mass audiences with high frequency and at low cost. This is precisely why it has long been used as a broadcast medium to announce events like movie premieres, product launches, and store openings. With the troves of data that can now be overlaid, advertisers are expanding beyond the “announcement” use cases above, to leverage the scale and power of the medium for deeper brand engagement and even to drive conversion. And it doesn’t hurt that OOH ads can’t be skipped.
OOH vs. Online: Complete control of the message and the medium
The online medium has long been beset with challenges including viewability, fraud, and transparency. The pandemic and political environment have particularly magnified concerns around negative content and brand safety. The underlying issue is that from UGC and breaking news to bots and ad blockers, brands simply don’t have control of the medium. Technology innovations will always try to help advertisers meet the latest challenges, from tracking viewable ads to stamping out the latest fraud scheme (and collect fees as a result), but the cat-and-mouse game will never stop. That won’t stop brands from advertising online, but there will always be significant struggles and risks that come with the lack of control in online advertising.
By contrast, OOH gives advertisers full control. In every other medium, the implied contract between the consumer and the publisher is “you are here for the content, but you have to stomach the ads,” which means the advertiser is not in control, but at the mercy of the content being relied upon to deliver the audience. OOH is the only major advertising medium that is not content-driven. The contract is simply “you are here, and there are ads.” The advertiser has full command of the message, including choosing the time, location, and physical context in which they deliver it. And it doesn’t hurt that the medium is always viewable and is never seen by bots.
OOH vs. Mobile: Life-sized engaging experiences vs. pint-sized interruptive ones
Mobile media consumption has exploded, and quarantines and social distancing have only further increased the amount of time we spend on our phones. But mobile advertising is a far cry from the experiences most brands hope to deliver. Quite simply, mobile ads are small and interruptive. Mobile ad spend will likely continue to follow consumption, but the physical limits and “look down” nature of the mobile medium structurally prevent the delivery of rich and immersive experiences.
By contrast, OOH is a “look up” medium, delivering memorable, life-sized messaging in the real world. From attention-grabbing billboards, to immersive brand trains and station dominations, to ubiquitous street furniture and place-based media, OOH gets noticed. Research shows it also generates higher recall than any other channel. A review of past OBIE awards for creativity in OOH reveals eye-popping and thought-provoking executions that are simply impossible within the confines of any personal device. And it doesn’t hurt that experiential marketing can be easily integrated into OOH campaigns.
OOH vs. Social: Reaching consumers with authenticity and trust
Advertising on social media has become a mainstay for brands, driven by unprecedented data and targeting capabilities. However, recent developments around topics ranging from politics to COVID-19 to racism, have raised new questions and challenges around social advertising. The divisiveness of social echo chambers and the boundaries of free speech are important topics to be sure, but not the ones that may be top of mind for an advertiser just looking to sell more widgets. Social media is a prime example of the medium becoming the message, and it’s starting to drown out the advertising messages that brands hope to deliver.
By contrast, OOH is only about the message. While it can be targeted to specific audiences, locations, and physical contexts, the medium itself is objective. It’s not an echo chamber displaying different messages based on political views, race, or income. It doesn’t try to masquerade as part of a news feed. It’s simply a real ad in the real world. Not surprisingly, research has shown that OOH is more trusted than any digital medium, including social, mobile, and online advertising. And it does hurt, more than ever, if trust and authenticity are in question.
As advertising finds its own “new normal,” brands will increasingly take notice of the advantages OOH offers compared to other channels. As they do, Out of Home will come out of the shadows of other media channels and take its place as a primary channel in the marketing mix, offering advertisers the most cost-effective and brand-safe way to reach and engage audiences at scale.