If you follow the U.S. economy, you know that the torrid pace of growth of recent years has begun to slow. But you won’t see that type of slowdown in out of home. New numbers from the Outdoor Advertising Association of America show that OOH hit its highest growth rate in a decade during the second quarter of this year.
Spending rose 7.7 percent — its best quarterly rate since 2007. Year to date, ad revenue for out of home has risen 7 percent, putting it well above all other traditional media.
Here’s how you can put that in perspective: by comparing OOH to other industries and American cultural touchpoints. Here are 10 things outdoor advertising is growing faster than right now — and why.
1. Television Advertising
TV advertising has been struggling for some time. Digital ads are cheaper and easier to target than TV, which has eaten into television’s momentum.
During the second quarter, television advertising was flat — broadcast down 1 percent and cable up 1 percent. A lot of people have stopped watching traditional TV. But they haven’t stopped going outside, which is why OOH will continue to thrive while this traditional medium slows down.
2. Radio Advertising
Radio has had an even bumpier time than TV. Competitors like Spotify and Pandora offer the same services as terrestrial radio but without the commercials — a major selling point. And while digital radio has come a long way, it’s still an outlier. People just don’t think of listening to traditional radio on their digital devices.
This has led to a slowdown in radio advertising. Year to date, most big radio companies have seen ad revenue decline, and local advertising has been particularly hard hit. Out of home doesn’t suffer like that — billboards along highways will always be seen.
3. Netflix
Netflix is still the 800-pound gorilla of the streaming industry, but it’s losing share in the over-the-top video wars. Gone are the days when Netflix added tens of millions of new subscribers each quarter. Now it’s facing two big problems:
- Stronger competition: Apple and Disney both launched premium streaming services that have pulled subscribers away.
- Less shiny newness: Remember when Orange Is the New Black and House of Cards were all anyone talked about? It’s been a while since Netflix had the “it” show that made people feel they needed the service.
Billboards never have this problem. There’s no real competition on the roads, and fresh creative every few months keeps the medium feeling new.
4. HBO
Guess what happened after Game of Thrones ended? A lot of people dropped the premium cable service. Building your brand around a single tentpole is dangerous. By contrast, out of home covers many different facets — from transit to Wild Posting® — giving it a diversified foundation that no single trend can undermine.
5. Hulu
With shows like The Handmaid’s Tale — the first streaming program to win a best drama Emmy — Hulu had been the fastest-growing streamer for a couple of years. But in 2019, its growth rate was half what it was the year before. Rapid expansion is hard to sustain. A slow-and-steady rate, like OOH has enjoyed, is much more feasible in the long term.
6. Amazon
In the first quarter, Amazon had its slowest revenue growth in four years, facing greater competition for online sales from everyone from Walmart to Office Depot. Greater competition makes sustained growth harder. OOH doesn’t face those same headwinds.
TV has always been the dominant advertising source, but it has since been surpassed by digital. That leaves OOH in the slow-and-steady growth category — a good place to be when analysts are worried about a recession.
7. Global Economy
A recent study projects that climate change will impact worldwide economic growth, with GDP per-capita gains plummeting in major economies like China and the United States. OOH just doesn’t experience those types of slowdowns. Top advertisers include some of the nation’s biggest and most successful companies — like McDonald’s and Apple — who continue to invest in outdoor regardless of broader economic conditions.
8. Apple
Speaking of the world’s most prolific tech device company — Apple weathered a few rough quarters. The company had to cut its revenue outlook to start 2019, the first time that had happened since before the iPhone launched. It also had its first holiday season sales slowdown since Tim Cook became CEO in 2011. OOH has seen no such rough patches, upholding remarkably consistent growth for the past decade.
9. Fortnite
Remember how you couldn’t pull your kids off Fortnite? That frenzy faded fast — playing time and participant numbers for the Epic Games title both dropped significantly. That’s what happens with fads. OOH isn’t a fad — it’s been around for hundreds of years and counting, and it’s not going anywhere.
10. Facebook
The world’s biggest social network has come under fire for everything from stoking misinformation to failing to properly police bad actors. That backlash has prompted its once-bulletproof revenue model to decelerate. During the second quarter, ad growth slowed significantly, and forecasters predicted that would continue.
There are no trolls dogging OOH, and we’ve never seen fake news on a billboard. Just saying.