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| Out of Home | |
out-of-home advertising Ad spending falls 18 percent in second quarter Sep 15, 2009
Out-of-home revenue declined 18 percent during second quarter, from $2.2 billion last year to $1.82 billion, according to figures from the Outdoor Advertising Association of America. But while it is a sizeable dip, it’s not quite as dire as it sounds. Outdoor had its best-ever second quarter last year, so analysts were expecting a considerable decline. The medium was down the same percentage as first quarter, indicating that spending may be stabilizing. Across virtually every other media, including newspapers, magazines and radio, second quarter saw bigger declines than first. Moreover, media people say they’ve seen a turnaround beginning in third quarter, and they expect that to continue through the rest of the year. “I think it’s definitely bottomed out,” says Rob Gorrie, president and founder of Adcentricity, a digital out-of-home vendor. “I was talking to our board of directors back in January, and I said looking forward we’re not going to see any real spending in out of home or digital out of home until the middle of July. And that was pretty accurate.” Part of the problem has been the recession itself. During tough times, advertisers are generally wary of trying new advertising venues, and digital for one is still relatively new. “On the digital side of out of home, we’ve seen a ton of what I would call tire kicking over the last quarter of last year and first quarter,” Gorrie says. “A lot of it came from a year ago, when everything went to hell in a hand basket. Advertisers said, ‘what are we doing?’ and retrenched into what they know well. They backed off of innovative stuff and kept to television and radio and magazines and print.” That now seems to be changing. General Motors, Verizon and Evian have all recently committed to digital campaigns. Media buyers have been telling Media Life for some months that they expect OOH spending to pick up during the second half of the year, led by digital. That assessment is backed up by recent forecasts from Magna and Veronis Suhler Stevenson predicting that digital will be a major driver in OOH’s recovery. Next year looks even stronger. “We’ve been talking to major auto, financial and telecommunications firms who say, ‘Okay, we spent $3 million this year, next year we’re going to budget $3 million to $9 million,’” Gorrie says. “There’s been a huge swing in the acceptance and utilization [of DOOH].” Meanwhile, the second-quarter malaise affected all the top-10 advertising categories for out of home. All but two were down by double-digit percentages. Insurance and real estate saw the biggest dip, off 33.5 percent compared to last year, from $183 million to $121.7 million. Media and advertising took the second-biggest hit, down 26.7 percent, from $180.8 million to $132.6 million. Overall, the top 10 categories, which account for nearly 80 percent of all out-of-home spending, fell 16.1 percent, from $1.72 billion to $1.44 billion.
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