Feature: Outdoor Sees Green Shoots Of Recovery
The economic downturn that has dogged the advertising industry for the last few years appears to be far from over. However, the latest figures from the Outdoor Advertising Association (OAA) show that the outdoor industry saw revenues rise by 15% year on year during the fourth quarter of 2002.
This increase brings revenues back to levels seen in 2000 and off-sets a less than impressive year for the outdoor industry in 2001, when revenues were down by 3% year on year. The Q4 increase may also suggest that outdoor advertising has turned a corner and could be sprouting the first green shoots of economic recovery.
According to leading industry sources, long lead-in times for outdoor campaigns often make the medium the last to be hit by economic slowdown and therefore the last to recover. However, the OAA figures do not support this theory, showing that total outdoor revenue for 2002 rose by 1.9% year on year to £690.1 million.
Long-term analysis of outdoor revenues from 1992 to 2002 suggests that the medium has not been as badly affected by the economic downturn as other sectors. Outdoor has experienced sustained growth over the last 10 years, with the exception of 2001, which it now appears to be recovering from.
A key reason behind the strength of outdoor advertising is that it does have the long-term problem of declining audiences faced by the UK’s main commercial TV channels and major newspapers. In fact, the continued increase in road traffic ensures that outdoor’s key audiences are rising.
Nigel Mansell, managing director of Concorde, agrees: “POSTAR has shown that outdoor audiences are on the increase, more people are driving more often for a variety of reasons, with only one fifth of journeys could be described as a commute. While ITV1 has suffered from audience erosion over the last few years, outdoor is not affected by programming or editorial change.” He says.
David McEvoy, marketing director at JCDecaux, believes that the outdoor market has benefited from specific lifestyle changes in the UK. He claims: “The UK has the longest commuting hours and working hours in Europe, which has meant there is a growth in people who cannot be reached by traditional TV advertising at home.”
In fact, according to McEvoy, the fastest growing category amongst outdoor advertisers has been other media owners, such as ITV, Channel Five, The Sun and the Evening Standard: “They are using outdoor media to reach the audience which increasingly alludes them.” He says.
Analysis of outdoor spend by sector reveals that entertainment, media and leisure brands are the heaviest outdoor advertisers, followed by FMCG brands. FMCG companies have long been associated with outdoor advertising and this affinity has been attributed to outdoor’s ability to act as a stimulus for immediate action, well illustrated by McDonald’s use of stair risers on the London Underground.
Another key reason that outdoor advertising enjoys solid growth rates is its ability to provide advertisers with highly targeted and accountable campaigns. According to Mansell: “Over the past five years outdoor has become increasingly accountable, there is now a much stronger level of confidence in the medium.”
For example the recent campaign to warn against television license evasion used posters which featured the postcode of the area they were advertising in. Elsewhere, campaigns featuring posters in night-clubs and most recently in the changing rooms of women’s clothing shops, have introduced a new level of precision to outdoor campaigns.
The sector also appears to have benefited from the latest industry buzz-word ‘media-neutral planning’. According to McEvoy: “Cross-media campaigns have become increasingly popular, Unilever and Colgate have switched into multimedia campaigns, using both TV and outdoor.”
Concorde predicts there will be continued growth in entertainment, media and leisure, FMCG and motorcar advertising over the coming year. However, the industry is expecting to lose about £18 million from cigarette advertising, which is will be prohibited from the end of this month.
JCDecaux also predicts that the the end of tobacco advertising will reduce outdoor’s annual revenue by 3%. McEvoy comments: “Tobacco advertisers only use billboards, so their withdrawal from the market will not effect advertising on transport or 6-sheet sites. We already have a replacement strategy for the sites, and expect FMCGs to snap them up.”
According to Concorde, the future for outdoor advertising is rosy and the company predicts that outdoor expenditure will increase by 3.5% in 2003. JCDecaux is still setting the long-term goal of 10% of the ad market, predicting growth levels of between 3% and 8% for 2003.
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