The past few years have been almost magical for the out-of-home advertising industry. In just 12 months’ time, OOH went from making up less than 5% of advertisers’ media plans to anywhere from 20% to 30%.
In a post-pandemic world, advertisers are looking for ways to vary their ad spending, and agencies say the demand for ad buying diversification is increasing.
With fewer consumers spending time at home, traditional website banner advertising is becoming less relevant. Meanwhile, particularly in large cities, like Los Angeles, New York, and Dallas, investments in OOH campaigns are on the rise.
What’s behind the uptick, and why are performance marketers who have previously been hesitant to invest in traditional offline channels suddenly gotten interested in OOH? One reason has to do with improving metrics.
While OOH still largely happens offline, on city billboards and on top of taxis, the metrics that marketers use to measure the value of their investments have gone digital. OOH ad marketplaces like OneScreen.ai are providing advertisers with audience-level reach and upper-funnel branding metrics, like awareness and affinity, to the point where DOOH is now on par with channels like online, social, and mobile when it comes to measurement. The granularity of data available through OOH campaigns even makes it possible for agencies to apply advanced techniques, like multi-touch attribution and incrementality measurement.
Firms like Adgile Media Group, a nationwide truck side advertising network, are seeing opportunities to integrate new technology and data-driven solutions into OOH advertising campaigns. Adgile converts last-mile delivery trucks into metric-centric mobile billboards for national brands. The company’s president, Max Flannery, says recent increases in digital CPMs are encouraging companies to look outside of traditional online channels, like mobile and social, to achieve higher ROI on their marketing spend.
“More traditional formats such as OOH are delivering substantially higher ROIs than digital and therefore are receiving an increasing amount of advertiser’s budgets,” Flannery says.
With a potential recession on the horizon, Flannery says advertisers have become even more interested in making the switch to OOH as a way to weather the storm.
OOH ad revenue reached $2.62 billion earlier this year, nearing the record-breaking revenues of $2.69 billion in 2019. According to the Out of Home Advertising Association of America, OOH will see 10% to 12% revenue growth in the coming year.
Another factor at play involves Apple’s rollout of iOS 14.5.
“With the implementation of iOS 14.5, tracking and targeting on many forms of digital advertising became much less specific. Because of this, brands are now forced to advertise more broadly to reach the same target consumer that they used to specifically target,” Flannery says. “This, in turn, causes the CPM of all forms of digital advertising to increase as advertisers are now reaching a larger audience in their campaigns.”
The debut of the iOS 14.5 impacted the way businesses collect and track data, making for a murkier picture of how online advertising performs. The initial rollout of the update led CPMs to increase slightly. For those brands that relied heavily on Facebook advertising, however, the implications were even greater.
Flannery says OOH campaigns have been outperforming digital in ROI for years, even prior to the recent increases in CPMs. He believes it’s actually the increased data capabilities possibile through OOH, rather than the rising cost of banner advertising, that’s driving more brands toward offline channels right now.
“Increased data capabilities have allowed advertisers to be more intelligent and specific in the planning of their OOH campaigns,” he says. “The effectiveness metrics have instilled confidence in brands using the format as it quantifies the ROI.”