Why Out of Home is soaring in a digital world

Article written by by Rob Ward , Op-Ed Contributor for Media Post, October 12, 2022

Remember the first lockdowns? Heady times weren't they--parks jammed with families, endless home-baked banana bread, awkward Zoom quizzes and a near-total removal of outdoor advertising.  

Physical restrictions had an acute effect on advertising that was near instant. Running ads outside made no sense with everyone inside, and marketing dollars began flooding toward digital.  Within weeks, poster sites turned apocalyptically blank and torn. London buses shone red all over, free from logos.  By 2020, global out-of-home spending had shed nearly $10 billion in revenue, dropping from $37.9 billion to $28.1 billion. The pandemic was a reset moment for outdoor advertising: like clearing out a cluttered shed and promising never to let it get full of junk again. 

Today, things have changed: Facebook has lost billions of dollars in market capitalization and is reporting revenue declines as digital costs soar. DTC pandemic winners like Peloton are desperate, shifting their distribution to include retail outlets and Amazon. Meanwhile, outdoor revenue growth has soared by more than 40% in the first quarter of 2022, taking advantage of fresh eyes as people return to the office, retail shopping, and socializing. 

Outdoor - A Channel Reborn 

And just as our lives have changed post-pandemic, so too has the role of outdoor. Outdoor is now a cost-effective option for start-ups, and scale-ups as rising costs and weaker attribution hit digital channels through the effects of iOS14 (some versions of which automatically opt users out of tracking). Brands are scaling their audiences through advertising to drive awareness and adoption of new digital platforms and consumer goods. 

Simultaneously, outdoor advertising has become a digital channel itself. Today, it’s easier to think of posters as giant liquid crystal displays with all of the connectivity and capability of their mobile counterparts. Google has announced that Display and Video 360 ads will be available on outdoor sites, stating, “digital out-of-home is an increasingly popular option that brings the best of digital technology to a traditional advertising medium.”

Now is the perfect time to re-look at how best to use outdoor as it ascends back into the marketing mix as a channel reborn. Here are five observations:

1. Outdoor advertising drives online conversion. Outdoor is a broader awareness channel that directly impacts digital purchase behavior. Perfect for a world where we walk the streets glued to our phones. By some estimates out-of-home boosts consideration for a brand by 2.4 times; in other words, people are more than twice as likely to shortlist a brand they’ve seen. This figure rises to 5.7 when used alongside TV. Scaling food brands like The Collective can use retail footprint data to reach new audiences whilst celebrating their unique brand personality.

2. Outdoor advertising drives retail distribution growth. New brands looking to increase distribution can use geo-located sites near retail locations, boosting sales in those particular outlets. People are more likely to notice new brands that run ads close to the point of purchase, driving them to try out the product. The Interactive Advertising Bureau published evidence that outdoor advertising increases foot traffic significantly, even during the pandemic.

3. Outdoor advertising is a digital response channel. Since 1994, QR codes have made a dramatic comeback, as phones finally have the in-camera technology to make them useful. QR codes turn any poster into a 'digital handshake', be that a product landing page, app install or promotional offer. A recent global study from Alfi indicates that senior advertising execs expect the use of QR codes in DOOH to grow by 20% or more over the next 12 months.

4. Outdoor advertising builds brand icons. The creative use of outdoor advertising is evolving. Where six words were considered the maximum, one word can suffice. Used with evocative or provocative photography, early-stage brands can elevate their status and stature. Outdoor LED posters can accommodate 3D effects and animations, creating visual spectacles. Social media makes it hard to tell the difference between real and fake, but posters are a real-world presence that builds trust and credibility.

5. Outdoor advertising is social media. What matters more, the poster or the post of the poster? Winning the US open, Emma Radacanu garnered millions of views for a single Nike poster when she shared it in a selfie. In 2020, underwear brand Knix commandeered New York 48-sheet dumpsters to promote their products (6 billion tampons end up in US landfill annually) and garnered a massive social following. Essity subsequently acquired Knix in July 2022 for an up-front of $330 million, proving that outdoor builds brands and brands build valuations.

While outdoor advertising has always been a popular way to reach consumers, its resurgence post-pandemic mirrors the growth of scale-up brands looking for ‘new’ ways to reach consumers. As our digital lives become more immersive, real life will become more valuable too. Every brand today needs to co-exist in physical and digital channels to win. The key is to find the right mix of online and offline tactics to reach users in a way that resonates with them. The ability to strike this balance is the new source of power and growth for brands. Welcome to outdoor advertising as the new digital-physical superpower.