Out-of-home advertising spending slowed in Q1 2008

Published on: 2015-02-05

As MediaWeek reports:

Out-of-home advertising slowed in first quarter, rising only 3 percent to $1.6 billion, according to figures released Thursday (June 12) by the Outdoor Advertising Association of America.

The gain is the lowest growth rate since the late 90s when the business began its seemingly unstoppable upward climb.

Still, the medium is holding up in the soft economy a lot better than many traditional media, especially newspapers and radio, which continue to decline.

Insurance and real estate, falling from the medium's second largest category to the third, slashed spending in first quarter by 11.5 percent to $161.8 million. Other categories cutting ad spending included media and advertising (-0.5 percent), communications (-1.8 percent) and auto dealers and services (-4.1 percent).

Offsetting the declines public transportation, hotels and resorts increased spending by 6 percent, restaurants by 5.9 percent, retail by 5.7 percent and automotive, auto accessories and equipment by 1.6 percent.

Our take:

At first glance, it's a bit disconcerting to see  an actual decrease in spending in this, one of the hottest sectors in the advertising biz today.  As MediaWeek notes above, the gain is the lowest growth rate since the late 90s, and one of the largest contributing factors was the fact that real-estate and related sales plummeted thanks to the credit crisis and sub-prime mortgage fiasco.  We expect that this will be a one-time anomaly, even if the economy officially slips into recession (which would at least be more concrete than whatever our current "economic slowdown" is).  In addition, major players like Lamar Advertising and Clear Channel continue to invest heavily in digital signage and electronic billboards, indicating that these display media will drive media sales even if the sector as a whole slows down a bit.

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