Once the rinky-dink side of advertising, billboards - or by their more dignified name, "outdoor advertising" - represent an "enduring competitive advantage" in what is otherwise a very tough market for advertising dollars.
Whether low-tech or high-tech, billboards are tangible, physical space that cannot be TIVO'd out, and do not have to compete with articles for reader attention.
Looking past "click" ads in search engines (which are brilliant), internet advertising is relatively hokey. Pictures compete with non-visual content (text) and are easy to overlook as "not part of what I came here for." In contrast, TV and outdoor ads catch people when they in visual modes, ie, looking and watching. I read websites for their content, and rarely pay attention to the ads, partly becuase they don't tell stories well (relying heavily on teasers). "Real" magazine ads tell whole or substantive parts of stories on one page, and can employ compelling images to their advantage.
I only watch TV regularly through a DVR now, which means if you are advertising in Seinfeld, Sports Center, or the "OC" (the influence of my girlfriend, I must admit!) in the hopes of getting my attention, you are correctly targeting my demographic, but you are not getting me!
However, as I walk to work, I see a ton of outdoor ads - on phone booths, on billboards - and I can remember them all. Tom Petty and the Heartbreakers at the Borgata. Lifetime television can deliver a female audience so well that men will clamor for their wives again. Time Warner Cable says that spot advertising (which I'd never heard of until I saw the billboard) has changed over the past 20 years - have my perceptions of it as a good medium for advertising changed as well?
These outdoor ads have a way of catching us at the perfect moment - as I walk to work in the morning, my mind is clear. When I drive, I am generally focused on the trip, trying not to worry too much. They catch me in the same spirit as what I am doing - looking around, scanning my environment. Taking in images. Reading on the web, I'm distinguishing characters on a black-and-white (or grey-and-white) screen. Billboards are a quick and easy distraction in an environment when we are prone to being distracted - the real world.
As demographic tools become more sophisticated, and the technology in these things improves, it's not hard to imagine a world where these things function like TVs, changing, moving based on the demographic of people who occupy the space. The technology to do this already exists, and perhaps when RFID technology is more prevalent, the ads can change depending on the dominant demographic that is in the vicinity at the time. (I am imagining cell phones carrying neutral customer data in chips that can be read from 10-20 feet away - ie, “male, 28”)
Now, this futuristic scenario is pie in the sky right now, but think about it - that bus stand, that billboard, that standalone outdoor ad - it's just space, and its space that is visible and can communicate. If you own that space, you own the present and the future opportunities to something that no one else can really infringe upon (unless, of course, TIVO starts making glasses and sunglasses with filtering technology - but I won't hold my breath for those.)
I've included a list the 20 largest outdoor advertisers so you can see the sort of companies who rely on it - companies that sell products (virtually) anyone can use - cell phones, cars, insurance, beer, etc. I don't think that will change.
Hence my interest in the upcoming Clear Channel Outdoor IPO (Link to Press Release). I know his is not a super original idea right now, and I am also pretty sure that since only 10% of the company will be offered, and other people will agree with what I am saying, the offering might come too expensive to make it worth it. It would be unfortunate if a billboard company trades at a hot-growth company multiple (on hype about GPS and electronic billboards) when it is pretty much a recurring revenue, moderate growth cash cow.
I guess the trick will be to watch, and wait - this is, and should be, a pretty boring business! It's main virtue right now is that it's not goint to die (like TV and commercial radio), not that it is a radical growth business.
I'll leave this here - consider it part one. More to come as thoughts and process evolves. - Ed
Let's take a run-down of a few industry stats (Courtesy of the OAAA).
Top 10 Outdoor Companies (based on 2004 US revenue) Link
1. Clear Channel Outdoor
2. Viacom Outdoor
3. Lamar Advertising Company
4. JCDecaux
5. Van Wagner Communications
6. Fairway Outdoor Advertising
7. NextMedia Outdoor
8. Magic Media
9. Reagan National Advertising
10. Burkhart Advertising
Top 10 Outdoor Advertising Categories (based on 2004 year-end expenditures)
1. Local Services & Amusements
2. Media & Advertising
3. Public Trans., Hotels & Resorts
4. Retail
5. Insurance & Real Estate
6. Financial
7. Automotive Dealers & Services
8. Restaurant
9. Automotive, Auto Access & Equip
10. Telecommunications
Top 20 Outdoor Brands (based on 2004 year-end expenditures)
1. McDonald's Restaurants
2. Warner Various Movies
3. Miller Various Beers
4. Verizon Long Distance Bus & Res
5. Anheuser-Busch Various Beers
6. General Motors Corporation Var Car & Trucks
7. Verizon Wireless Services
8. Cracker Barrel Old Country Store
9. Chevrolet Auto&Truck Var
10. Walt Disney Var Movies
11. Nissan Autos & Trucks
12. Bank Of America Consumer Services
13. Diageo Plc Var Beverages
14. Toyota Auto & Trucks
15. Geico Insurance
16. Coca-Cola Various Soft Drinks
17. Coors Light Beer
18. Allstate Insurance
19. Dodge Autos & Trucks
20. Dreamworks Various Movies
Major Forms of Outdoor Advertising
U.S. Outdoor Industry Spending Over the past ten years (billions)
Growth in Commute Times - Positive for Billboards
Major Advertisers Respond to TV's Increasing Challenges
WSJ: Ad Icon P&G Cuts Commitment To TV Commercials (Link)
Top U.S. Advertiser Explores New Ways to Reach Viewers; A Product-Placement Surge
By JOE FLINT and BRIAN STEINBERG / THE WALL STREET JOURNAL
June 13, 2005; Page A1Procter & Gamble Co., the consumer-goods giant and marketing icon, is sharply cutting how much it commits in advance to buying television commercials next season, according to people familiar with the situation.
The move by P&G, the maker of well-known brand items such as Tide, Crest and Pampers, is the latest sign of rapid changes in how companies reach consumers and TV networks and cable channels draw revenue. In recent years, many big companies have expressed doubts about the effectiveness of traditional TV advertising. Digital video recorders such as those made by TiVo Inc., which make it easier for TV viewers to skip commercials, are growing in popularity, while leisure activities like the Internet and videogames are competing for consumers' time.
you should take a look at the outdoor advertising in london and its suburbs. it makes american advertising look tame, ie much more agressive color schemes and even more ubiquitous than its american counterpart. maybe stas are available via british journals? check it out...De-Ed
Posted by: Ayeetza | June 21, 2005 at 08:14 AM
WIll there be more lay-offs with LAMAR ADVERTISING?
More value and LTF (Long Term Focus) on Digital
than on Employee(s) will eventually 'pop' vital/key
areas in Lamar. Their 'MO' is known for 'acquire-test-retire'
smaller companies is also wearing them thin. Concern of
stock holders is high.
Posted by: Clay Ohf | June 24, 2008 at 02:44 AM