Marketers looking for ways offline to reach audiences are turning to out-of-home media and the tactic is on pace to gain even more ground, with spending projected to reach $9.06 billion by 2010, according to a recent forecast.
From billboard and transit displays to park benches and bus shelters, the out-of-home segment grew 8% to $6.3 billion in 2005, according to the 2006 Veronis Suhler Stevenson Communications Industry Forecast. The category is projected to grow 7.9% this year to $6.8 billion, largely fueled by favorable ad budget shifts and rising commute times, the forecast says.
The forecast, scheduled to be released today, is a compilation on out-of-home advertising that analyzes 21 segments and more than 100 sub-segments of the media industry. The study, conducted jointly by PQ Media, a Stamford-based alternative advertising and marketing research firm, includes current spending, five-year forecasts and consumer usage of media and business media trends.
Out-of-home advertising has been a steady marketing tactic over the years, the forecast says. “But in recent years, more advertisers seemed to reawaken to the medium’s potential to reach mass audiences in multiple venues and formats in a cost-effective manner,” it states.
Static billboards, one of the oldest forms of advertising, is the largest out-of-home medium. The tactic is expected to rise 6.8% this year to $4.13 billion and grow at a compound annual growth rate of 6.2% through 2010. Digital technology is expected to fuel the growth with a greater rollout of digital billboards, according to the forecast. Transit displays (think ads on subways, airports and buses) are projected to grow 8% to $1.34 billion this year jump 7.4% on a compound annual basis through 2010. Spending on street furniture (think bus shelters, trash cans and park benches) is projected to rise 4.3% to $947 million this year and grow 3.5% annually through 2010, the forecast said.
Marketers are spending more on out-of-home media because of its improved quality and return on investment capabilities, said Trent Hickman, managing director at Veronis Suhler Stevenson. In addition, the tactic has a greater reach than it did 20 to 30 years ago, he said. Consumers are spending more time commuting to work and from work, giving brands more chances to market their products. And unlike traditional media (broadcast TV or radio), out-of-home media can’t be skipped over.
“Out-of-home media in terms of static billboards has become a better product where traditional mass media—radio, television and newspapers—have struggled as new forms of media such as the Internet or the proliferation of additional television channels emerge,” Hickman said. “Out-of-Home media is taking share from the overall media pie.”
Likewise, alternative media is tapped for huge growth. The tactic (think advertising on coffee sleeve and pizza boxes and messages on dry cleaning bags) is projected to grow 33.3% this year to $386.6 million. It is expected to soar 28.1% on a compound annual basis each year and hit $1 billion in 2010.
“There really has been a proliferation of [alternative media] in the last seven or eight years,” Hickman said. “Advertisers and agencies are looking for fresh ideas.”
The five brands that used out-of-home advertising in 2005 include McDonald’s with $49.9 million, Cingular Wireless with $44.4 million Verizon-Long Distance at $29 million, General Motors at $27.9 million and Anheuser-Busch with $27.5 million, according to the forecast. Wireless and car insurance brands ramped up their advertising spending in the sector and the trend is on pace to continue through 2007, the forecast states.
For more information on the forecast, visit VSS.com.
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