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The Great Outdoors

(October 2008) posted on Thu Oct 30, 2008

Out-of-home's growth has no end in sight.

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By Stephen Freitas

In Chicago, a billboard grows lettuce. In Las Vegas, even the statues support the NBA All Star game. In Los Angeles, an entire building exterior becomes an advertisement. And in New York City, pedestrians hear a voice inside their heads, coming from a wall mural.

Across the country, out-of-home advertising is becoming the most innovative, cutting-edge media in the marketplace. When coupled with the fact that outdoor advertising has enjoyed revenue growth rates far in excess of the overall ad industry in recent years, it’s a combination that sparks optimism across the marketplace.

A more mobile society
The reasons for out-of-home’s growth are numerous. Clearly, other traditional media are suffering from fragmentation and audience erosion. Since the 1970s, the number of television networks has increased from the former Big Three to hundreds. With the advent of HD radio, satellite radio, and other audio innovations, the number of choices in the over-the-air marketplace has multiplied exponentially. Magazine titles continue to increase as well. The end result is a fragmentation of media, making it more difficult to reach consumers. No longer can you expect to reach a majority of Americans by simply placing a commercial during the most popular shows on television. This year, virtually all forms of traditional, in-home media have experienced a decline in revenues and audience. In the case of spot radio, that decline is in the double digits. Costs per thousand (CPM) for traditional, in-home media, however, have not necessarily declined at a rate equal to their decreased reach. Average CPMs remain high, reducing the cost effectiveness of television, print, and even radio buys.