Getting In on the Out of Home Advertising Market

According to the Outdoor Advertising Association of America (OAAA), revenue in the out-of-home advertising industry continues to rise as the economy improves. Not surprisingly, many print service providers want to make sure their ability to serve that market advances hand-in-hand with that growth.

Out-of-home (OOH) advertising revenue grew 4.3 percent in the second quarter of this year, compared to the same period in 2011, the OAAA reports. First half 2012 revenues of almost $3.5 billion, following growth of four percent to $6.4 billion in 2011, are evidence of a steady increase in year-over-year revenues tallied in OOH advertising since second quarter, 2010.

The industry has seen revenue increases the past eight quarters, and forecasters predict the OOH advertising market will only continue to expand. In fact, only cable TV and the Internet are faster growing advertising categories.

The out-of-home advertising industry includes more than 2,100 operators across the United States, representing the four major OOH format categories. They are billboards, transit, street furniture, and alternative media, with billboards comprising 65 percent of the OOH revenue, says OAAA chief marketing officer Stephen Freitas. “OOH media companies range from public, multinational media corporations to small, independent, family-owned businesses,” he says.

Because OOH advertising encompasses billboard, transit, and similar advertising, “It reaches people on the go,” adds Buster Kantrow, vice president of business development for Lamar Advertising Company in Baton Rouge, LA.

That’s an important advantage in this era of major evolution taking place in the advertising landscape, Kantrow reports. “The traditional ways to advertise are to reach consumers in the home, through television, radio, and newspapers,” he says. “But they aren’t as effective as they used to be.

“The business we’re in is billboard advertising. And it doesn’t have the issues of fragmentation that some of the other traditional channels face.”

In the past, what was called outdoor advertising was divided into two separate categories, referred to as on-premise and off-premise signage, says Rich Gottwald, executive vice president of the International Sign Association, a 2,300-member trade association comprised of the manufacturers, suppliers, and users of signs and sign products.

On-premise signs are those on businesses such as stores that promote those venues. Off-premise signage refers to billboards along a highway advertising a business that might be five miles down the road.

“Over the years, those terms have changed a bit, and now we call it out-of-home advertising,” Gottwald says. “There’s a new kind of sign referred to as a dynamic digital sign. It’s basically a television screen, which might be on a gas pump, on a store, or in a shopping mall. What used to be considered just on-premise signage now encompasses those kinds of signs as well.”

Dynamic Digital Signage

While traditional on-premise signage will continue to be needed, dynamic digital signage provides another product and revenue stream for sign companies. Digital dynamic signage as a segment is likely to grow from 15 to 30 percent or more yearly, reports Alan Brawn, chairman of the Digital Signage Federation.

Notes Gottwald: “We’re trying to educate [sign providers] regarding the different aspects of what we call digital signage, including hardware, software, content and the business side, in which you install a screen and gain revenue.”

Entering this side of the business can be important for many print service providers already delivering a steady supply of static signage to customers. “The client may come to you and say, ‘You provide our print signage, and we want you to consider starting to provide our digital signage as well,’ ” Gottwald says.