You can sum up the full-year out of home advertising numbers for 2020 in four words: Could have been worse.
There’s not much you can say that about in 2020, a disaster of a year for everything from the concert industry to restaurants to politicians of all stripes. The global pandemic that claimed so many lives also wreaked havoc on the economy, and anything above mere survival was cause for celebration.
So, all things considered, 2020 stunk for OOH advertising, but it stunk much more for other ad formats. What’s more, outdoor had been riding such a high for years, the industry can afford to absorb some punches.
The big question is not what the 2020 numbers mean because they’re an anomaly, the product of a once-in-a-lifetime occurrence and not a reflection of the medium’s strength. What matters is how out of home comes back from this, which will depend on a number of factors.
Big Questions for Out of Home in 2021
Will OOH be back in 2021? There’s no reason to think it won’t, certainly in part because 2020’s numbers were low, and as we return to normalcy, we’ll see organic improvements. We already have. Spending among top 10 advertisers jumped 13 percent from third to fourth quarter, and year-to-year declines got smaller in third and fourth, too, after a rough second quarter.
So, the rebound is already underway. Just how big that bounce will be depends on the answers to these questions:
- Are movies coming back? The movie industry doesn’t just pull in revenue for screen and other in-theater advertising. It also spends money on billboards, and with almost zero notable theatrical releases over the past 13 months, that spending has plummeted. But there are some promising signs on the horizon. Theaters had their best weekend of the pandemic with the release of two popular kids’ movies. While we haven’t quite turned a corner, some bigger potential box office draws later in the year will be telling.
- Will outdoor events return? Concerts like Coachella were canceled last year, and some things (like Coachella) have already been called off in 2021. These accounted for a lot of experiential advertising and targeted efforts to reach influencers and music fans who became captive audiences on the roads to the festival. There may still be hope for the second half of 2021, though any big events that take place will undoubtedly have a lower capacity, such as February’s Super Bowl did with about 37 percent of seats filled.
- Are advertisers feeling more confident? The first quarter ad numbers won’t come out for several more months, so for now, we’re going to have to rely on other market indicators to determine whether advertisers believe we’re over this economic blip. Consumer confidence is certainly something companies pay attention to, and it’s been on the rise in the past few months. Also, the CMO Council reports a generally cheerier outlook for 2021, with the majority of marketers expecting to increase advertising.
Before the pandemic, out of home was the only traditional ad category seeing growth amidst a huge surge for digital. The final question is whether advertisers will continue to see value in the medium after time away. The answer is undoubtedly yes.
There’s no indication that the OOH spending declines were caused by anything other than the pandemic. There’s been no underlying shift away from the format, no sea change that would account for the reductions besides the overall sluggishness of the economy and advertisers’ desire not to look insensitive by asking you to buy their burgers while hospitals are packed with patients.
Given the robustness of OOH ad spending the past few years, we can expect a continued appetite for outdoor advertising once things get back to normal. We’re all tired of saying and hearing that phrase, since it seems so far into the future, but if the vaccine rollout continues apace, the time may be closer than we dared dream a few months ago.
The 2020 OOH Advertising Numbers
And now, a brief look at the numbers. OOH ad revenue fell 30.5 percent during fourth quarter, with the year ending down 29 percent, according to the Out of Home Advertising Association of America.
While fourth quarter’s drop was precipitous, it wasn’t as stark as second quarter, when spending caved, down 46 percent.
Of course, much of that is attributable to cinema advertising’s near-evaporation. It plunged by 90 percent compared to the previous year, with most movie theaters nationwide closed for roughly six months.
It also didn’t help that place-based advertising hit similar challenges. With arenas and stadiums closed and bars, restaurants and gyms operating at 25 percent or less capacity, advertisers weren’t interested in those forms of OOH.
Some other interesting takeaways from the numbers:
- Bright spot: Government Politics & Organizations saw a huge year-to-year boost, up 275 percent. The election and spending by state and local governments on public health messaging fueled the gains.
- Biggest loser: Media & Advertising spending plummeted 39.8 percent for the year, the largest drop among the top 10 ad categories.
- Biggest bust: One of the handful of advertisers to increase spending year to year in 2020 was Quibi, the short-lived short-form video service that folded after just six months and a staggering $1.75 billion investment.
- Big tech, big spend: Twenty-one of the top 100 advertisers were tech companies. Not coincidentally, many of them made overall gains during the pandemic as consumers and businesses alike scrambled to up their technology game to avoid boredom and facilitate remote work. Among those top 100 were familiar names like Amazon, AT&T, Facebook and Google, but also Zoom, which few had heard of pre-COVID.
In total, advertisers spent just over $6 billion on out of home in 2020. As we look toward the rebound, GroupM has projected that OOH ad spending will rise by 23 percent in 2021, accounting for 3 percent of all ad spending.