Marketing Briefing: Ahead of economic downturn, marketers look to OOH as advertising safe bet
Even as conversations around the economic downturn ramp up, marketers say they’ll continue to invest in out-of-home advertising, which has spent the last year on the rebound amid the pandemic.
“A lot of the testing of new opportunities may get curbed a bit,” said Michelle Chong, group director of planning at Fitzco ad agency. “But a regular roadside billboard would be safer than some of the newer technology and testing opportunities.”
As a traditional advertising channel, out-of-home is tried and true. Or as Chong puts it, “it’s a really well-understood media.” Advertisers know what they’re getting with their OOH media buys in terms of spend and return on investment, as opposed to the rising CPMs and saturation of the digital advertising marketplace.
Advertisers started taking a second look at OOH advertising this time last year, seeing value in the channel as shoppers continued to return to in-person activities, like work, music festivals and travel. That momentum hasn’t slowed as OOH ad revenue reached $2.62 billion earlier this year, nearing the record-breaking revenues of $2.69 billion in 2019, according to a new ad revenue report from the Out of Home Advertising Association of America (OAAA).
Historically, OOH has fared well during economic crises, said Anna Bager, president and CEO, OAAA. This time isn’t expected to be any different. Not only because the platform is considered to be “a very affordable platform,” she said, but also because technological advancements, like programmatic and digital OOH, have made targeting and measurement easier.
“We are a one-to-many contextual medium, and therefore not facing the same challenges as other advertising platforms do when it comes to privacy and targeting,” Bager said in an email, “which likely also will help keep us at the forefront of ad spend.”
As more advertisers take interest in OOH and inventory remains limited given the physical nature of OOH, industry experts expect CPMs to rise. However, it’s not expected to detour marketing spending.
“We get more and more requests for OOH and our syndicated research has seen an uptick in the channel ranking higher for what consumers watch/see,” David Song, CEO of Rosie Labs freelance ad collective, said via email. Last year, “None of our clients even touched OOH,” due to pandemic uncertainty, Song said. This year, about 20% of client ad spend was dedicated to OOH.
“The OOH CPM will continue to rise and we are seeing sellouts in some boards we wanted to buy for Q4,” Song said in an email, adding that ad space along transit, especially New York City subways, is already selling out, rendering it unavailable for months. Per Song, CPG, retail, fashion and sports clients are eager to buy up OOH. Chong too said client interest in OOH has been across the board.
That’s not to say that OOH is replacing digital channels. “The interesting space probably is like the merging of the two–things like out of home [and] retargeting, where you retarget people that have physically driven past your board,” Chong said.
What’s more, brands like BelliWelli snacks and Coterie baby brand have leveraged OOH billboards, garnering some online traction after people shared images of the billboards online, making for a two-tiered, digital and OOH strategy.
“It’s more about those channels being better together — out-of-home supporting what you’re doing in digital,” said Chong.
As a potential recession looms, Bager is confident OOH will weather the storm. “OOH home will continue to deliver efficiency across multiple formats,” she said via email. “Marketers will continue to make their media spend work harder for them.”
3 Questions with Clarisa Lindenmeyer, chief of staff and chief brand officer of fintech company Gig Wage
Gig Wage, a financial technological payroll company, has recently raised $16 million in funding. How has that changed the marketing strategy?
It’s amazing that even in the early days, while we spent no money on Google, we got so much attention from Google. The third party credibility of press really made that possible. So for many years, we created really solid content. We distributed a monthly newsletter and our list grew. Then of course our social media channels…[and] lots of speaking engagements. The organic [growth] thrived. That was really the model until we raised our Series A. When we raised our Series A, we finally had more funding to put into place. We experimented with Google, webinars, [and] more automated email marketing. We did much larger sponsorships and advertisements with key institutions around certain industries that we know are contractor-dependent. We started to touch every channel in preparation for putting more fuel on the fire.
So what channels have been added to the marketing mix?
We really ramped up our content on our blog. Press is always the big one. We started to make changes to our website and really optimize that. Email marketing, webinars and then sponsorships of organizations. And then good old fashioned events. conferences, and looking for other strategic partnership channels from them. And then of course social media. We have experimented a lot with that. That was the media mix that was in full drive until April.
How did things change in April?
In some of the categories where we had the biggest spend (Google was a given), we just weren’t seeing the traction that we wanted. It’s not at all that we don’t believe in that [channel], we know it can work. It’s the amount of time and money it takes to get those campaigns really working. [April] was really just a strategic pause to nail our business model, pricing and figure some things out that we had learned in the midst of our marketing, especially around segments like where to go find our potential customers, and then turn [marketing strategy] back on in a more focused and meaningful way.
By the numbers
Advertisers have been increasingly reliant on content creators and influencers to get in front of audiences, especially as shoppers are more advertising adverse. That trend is expected to continue with an estimated 74% of marketers planning to invest at least a quarter of their social media spend on content creation partnerships through the rest of the year, according to a new report from Sprout Social. Find more key stats from the report below:
- Instagram (58%), Facebook (51%), and TikTok (50%) reign supreme as the top three platforms brands plan to use for creator partnerships.
- 40% of marketers anticipate investing more than half of their social media budgets on partnering with a content creator in the next few months.
- Marketers who are prioritizing working with creators rank generating more audience engagement (62%) and reaching new audiences (60%) as their top two goals, even ahead of driving revenue (42%).
Quote of the week
“As with so many emotionally charged situations, the cost of getting things wrong will always be higher than the cost of remaining silent.”
— Nev Ridley, managing director at ilk Agency, discussing brands’ reaction to Queen Elizabeth II’s death on September 8.
What we’ve covered
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