October 10, 2022
The digital advertising landscape is currently going through disruptions due to various factors. However, the OOH market seems to be growing. But what does this mean for OOH sellers and advertisers in economic terms? OneScreen.ai conducted a study to understand why companies are investing in OOH, how the ad-buying process is working for them, and more. Check out the findings here.
As the digital advertising landscape faces upheaval, out-of-home (OOH) advertising is on a growth path. According to predictions by The Business Research Company, the global OOH advertising market is expected to touch $40.42 billion in 2026 at a CAGR of 9.1%. Several factors have led to this growth. One key driver is the number of people coming back to make purchases from physical stores. As more consumers resume shopping from brick-and-mortar stores, they are paying attention to their surroundings. Thanks to heightened outdoor awareness and the desire to reduce screen time, OOH is on a growth trajectory.
But what does it mean for OOH advertisers and sellers in economic terms? To understand why brands are investing in OOH, where they are spending their budgets, how well the ad-buying process is working for them, and more, OneScreen.ai recently conducted a study. One key finding is that 96% of advertisers are satisfied or very satisfied with the ROI of their OOH marketing campaigns.
The following are the findings in detail.
Advertisers Invest To Create Brand Awareness and Capture New Demographics
Outdoor advertising is notorious for being a brand awareness exercise or vanity play. But more than 50% said OOH advertising could introduce their brand to new audiences. While about 58% invested in OOH to increase brand recognition and awareness, 55% said they did so to capture new customer demographics. Those who invest in both traditional and digital OOH (DOOH) were more than 18% more likely than average to say this.
About 38% wanted to take advantage of the increase in public events and restaurant attendance. Many marketers want to diversify their marketing and explore new promotional opportunities in response to diminishing digital ad performance. With increasing air travel, 22% of those buying OOH want to take advantage of airport advertising.
So, what type of OOH are advertisers investing in? About 51% are investing in traditional OOH. About 41% are investing in DOOH though this is less true for brands with limited marketing budgets. About 8% invest in both OOH and DOOH.
Billboards Rank on Top With Marketers for ROI
Regarding ROI, billboards were the winner, as respondents saw the strongest ROI from billboard advertisements. For advertisers using traditional OOH, junior bulletin or junior poster billboards showed the strongest ROI (40%). Similarly, advertisers using DOOH and both forms of OOH saw the strongest ROI with digital billboards (38%).
Traditional OOH users preferred posters (50%) and junior billboards (48%) over bulletins (38%). About 33% of them also used wallscapes, murals, or bus advertising. DOOH users and advertisers using both preferred digital billboards (62%).
Those investing in both are also testing more emerging and interactive technologies. For example, 44% use digital kiosks, and 48% invest in QR codes. About 35% use place-based media, such as restaurants, supermarkets, etc. Nonetheless, fewer than 25% of brands have expanded OOH to incorporate street furniture, mobile messaging, and programmatic automation. This could offer a competitive advantage for suppliers to expand or promote inventories and media buyers to achieve their goal of exploring new promotional opportunities.
Rollout and Budgeting Pose Significant Challenges
Brands spend an average of $268,040 on OOH placements in a year. But that is not the amount they budgeted. While about 42% spent less than anticipated, 10% spent more. Irrespective of whether they spent more or less than expected, their budget number was off by an average of 53%.
Advertisers also face the problem of chaos when working with OOH. While marketers like the massive diversity of media and targeting options, pulling together the details for a campaign can be confusing and frustrating. About 68% of advertisers said finding and managing OOH advertising was chaotic. Many cited difficulties determining the right location for ads (60%), the right company to buy ad space (68%), and the tangible impact of campaigns (64%).
Advertisers want greater clarity and efficiency. Companies are spending an average of 17 additional hours a week on finding and managing OOH inventory.
Companies are quite clear that they need two things to succeed with OOH:
- About 70% said a single point of contact would increase their OOH investment value.
- About 76% said greater visibility into the availability of inventory would make them more likely to increase their budget allocation for OOH advertising.
Most Advertisers Are Happy With OOH ROI
Advertisers using OOH are measuring success in a few ways. OOH advertisers want their campaigns to generate more social media engagement (67%), website traffic (54%), and stronger brand recognition (44%).
Interestingly, 96% of the respondents said they had reached their goals. And their revenue was way up. Advertisers satisfied or more than satisfied with OOH attribute these ads to a 51% average growth in monthly revenue. This means while the average spend is $268,040 per year, the average gain is $402,252 per month. It seems natural that 80% of brands express confidence in OOH campaigns. Advertisers investing in both OOH and DOOH are more confident.
But what about customer acquisition costs (CAC)? While many advertisers are concerned that CACs are rising, brands using both OOH and DOOH are 400% more likely to see reductions in CACs.
It may be seen most brands using OOH, DOOH, or both are happy. And they want more. About 78% intend to increase OOH investment in the next year. Only 2% plan to reduce it. To strengthen their OOH efforts, 99% plan to hire more staff. While funding for that may come from other advertising categories or departments, 33% will use profits generated from their OOH campaigns. Advertisers using OOH and DOOH are twice likely to say that.
Boost Your Brand Awareness and Reach With OOH
As more people face digital fatigue and get out of their homes, OOH is witnessing considerable growth. While a few advertisers may face challenges like confusion and budget planning, you can overcome these difficulties with one-stop platforms that improve efficiencies and reduce chaos. Given that most advertisers are satisfied with the ROI of their OOH campaigns, it is time to consider it a crucial channel for your advertising efforts.