SignageWire

Out-of-home advertising market plenty strong, study shows

Author: WireSpring on 2008-08-11 14:16:19

As MediaPost writes in this story:

Out-of-home's reach and frequency have remained "virtually unchanged"--even as consumers react to high fuel prices by driving and flying less, the OAAA asserted. Regardless of gas prices, most Americans still have to go to work, prompting many to turn to public transportation, which offers equivalent exposure to out-of-home media via buses, subways and commuter rail.

Virtually alone among traditional media, out-of-home advertising enjoyed a string of strong years from 2002-2007, frequently posting revenue growth in the high single digits--but the rate of growth slowed to a more modest 3% in the first quarter of 2008, compared to the 8% growth rate in the first quarter of 2007.

But VSS remains positive about out-of-home advertising, forecasting a cumulative annual growth rate of 10.3% through 2012. At this clip, out-of-home ad revenues should rise from $7.9 billion in 2007 to $12.9 billion in 2012. That's more than double the projected growth rate for advertising in general, which VSS pegs at 4.3% per year through 2012.

Our take:

While it's hard for WireSpring to judge the growth of the out-of-home industry in general, the digital sector is very hot right now, and so far hasn't been significantly affected by the current economic slowdown. Between the growth of indoor digital signage networks in retail and other out-of-home environments, and the explosion of roadside electronic billboards championed by Clear Channel, Lamar and (increasingly) JC Decaux, there's plenty for us to be happy about.

Will the growth continue? Current analysis seems to say "yes," though VSS and PQ Media do show that high energy prices have the potential to reduce the maximum audience size for the medium. Whether this will be significant or maintained is anybody's guess right now.

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