Return on investment (ROI) isn’t just a trendy term in advertising—it’s a vital metric for determining the most effective media. It underscores what we often share with our clients: outdoor advertising delivers results.
Out-of-home (OOH) advertising consistently demonstrates exceptional ROI. Numerous studies reveal its return outpaces most other media, particularly traditional formats. Advertisers repeatedly report satisfaction with the results. The clearest sign of strong ROI is the medium’s consistent reuse, and our experience confirms that outdoor advertising is a reliable choice marketers return to because it gets the job done.
Curious about how outdoor advertising proved its impact in the United States throughout 2023? Here’s what you need to know.
What Is ROI (Return on Investment)?
ROI, or Return on Investment, evaluates how effectively an advertising campaign converts spending into measurable returns. Essentially, it answers the critical question: did the investment in advertising pay off? Calculating ROI helps advertisers determine efficiency and supports decisions about whether to reuse the medium.
ROI is calculated using a standard formula, though its accuracy depends on the data collected from the campaign:
[((number of leads * lead-to-customer rate * average sales price) – cost or ad spend) / cost or ad spend] x 100
Here’s an example:
Imagine a record label spends $2,000 on a billboard campaign to promote a new album. The billboard generates 2,500 website clicks (number of leads), resulting in 1,000 album downloads (0.4 lead-to-customer rate) at an average price of $10 per album. The ROI would be:
[((2,500 * 0.4 * $10) – $2,000) / $2,000] x 100 = 400%
This campaign achieves a 400% return on investment—an exceptional result, as anything below a 2:1 return is generally seen as underwhelming.
That said, focusing solely on direct monetary returns can be limiting. Modern advertising metrics often take a more holistic view. Not every ROI result can be quantified; for example, increased brand awareness or subtle long-term customer loyalty may not show up immediately in sales. Consider how many viewers might leave the advertiser’s URL open in their Safari tab for later use—small, incremental steps toward long-term goals.
For outdoor advertising, these intangible benefits can have a meaningful impact, proving that ROI often extends beyond the numbers.
What Does ROI Mean for Outdoor Advertising?
ROI in outdoor advertising can be measured in two key ways: **organic methods** and **paid attribution**.
**Organic Methods:**
These include tangible metrics that capture the campaign’s reach and engagement, such as:
- How often your campaign hashtag is used on social media.
- The number of clicks on a QR code embedded in the ad.
- Promotional codes redeemed as part of the campaign.
- Visitors driven to a campaign-specific website.
Interestingly, product purchases often aren’t the primary goal for outdoor advertising. Instead, the focus is on building **brand awareness** and encouraging **engagement**. Outdoor ads work on a long-term basis, creating repeated exposure to a product or brand that can lead to eventual sales down the line.
**Paid Attribution:**
This approach involves more advanced tracking tools, including:
- Geofencing to monitor the locations of mobile users near an ad.
- Pinging mobile devices to enable retargeting campaigns later.
- Using pixels on a campaign website to track mobile devices within the ad’s vicinity.
- Monitoring spikes in website traffic directly linked to the campaign.
Additionally, viral activity from a particularly clever or visually engaging outdoor campaign can significantly enhance ROI. Tracking how and where the campaign gains traction online provides valuable insight into its broader impact.
Outdoor advertising often delivers ROI in ways beyond direct sales, proving its effectiveness as a long-term investment in brand growth and consumer connection.
Outdoor Advertising ROI Statistics
The impressive return on investment for outdoor advertising is backed by data, not just opinion. These statistics highlight its effectiveness:
- Outdoor advertising boasts the lowest cost per thousand (CPM) among major media channels, ranging from $2 to $7. This efficiency translates to a significant ROI for a relatively modest investment.
- Billboards deliver an impressive 497% return on investment, according to the Out of Home Advertising Association of America (OAAA).
- Advertisers using billboards see a return of $6 for every $1 spent on advertising, based on the same study.
- Out-of-home (OOH) advertising complements other media exceptionally well. Adding OOH to a mobile advertising campaign can boost ROI by an incredible 316%, OAAA reports.
These statistics emphasize that outdoor advertising is one of the most cost-effective and impactful channels for reaching audiences and driving results.
Ways to Improve ROI for Outdoor Advertising
Ultimately, ROI is about visibility. To maximize your return on investment, ensure your campaign is seen by as many people as possible, increasing the chances of driving purchases or website visits. Here are some actionable ways to improve your ROI:
- Identify your target audience better. Even the best campaigns fail if placed where your target audience isn’t. For example, promoting surfboards in a landlocked state won’t yield strong results. Make sure your placement matches your audience’s location and habits.
- Find the best medium for your message. While billboards are effective, explore other options like bench advertising, wild posting, or