A COVID-19 vaccine could lead to a surge in OOH advertising, but is the industry ready?
The world is holding its collective breath for a COVID-19 vaccine. As soon as one is available, both consumer behavior and advertising spending will change. Brands will invest in out-of-home to reach consumers eager to leave their homes and take a break from screens. The spending increase will happen quickly, like a light switch turning on. This could be a great thing for OOH media providers — or incredibly challenging.
In the early months of the pandemic, demand for public transit dropped an average of 75% nationwide. Obviously, the OOH industry took a huge hit. Outfront Media reported a 50% decline in Q2 revenue, compared to 2019. Clear Channel Outdoor said Q2 revenue fell by nearly 55%, while JCDecaux, the world’s biggest OOH advertising group, reported a 66% drop, as reported in The New York Times. To cope with the drop, OOH companies renegotiated rental deals with transport hubs, reduced salaries and hours, and, in some cases, laid off or furloughed employees.
The good news is things are changing and 2021 should be one of tremendous growth. The OOH space needs to shift its mindset quickly and prepare to meet potentially unprecedented demand.
The case for an OOH surge
There is already a strong case for OOH’s value. People are getting outside as much as possible. Many schools are open. Businesses have reopened, too. For better or worse, people are tired of COVID-19-related restrictions. They miss their old lives, and they are eager to get outside and to have in-person experiences.
Apple has been using mobile data to map changes in routing requests since Jan. 13, 2020. Transit requests steeply declined from February to March, but walking and driving have since rebounded to pre-pandemic levels — or higher — in much of the US, according to Apple data. In fact, driving is up 4% in the San Francisco Bay Area and 37% in New York City since January.
Geopath data also reveals that people are, in fact, traveling. As of Oct. 5, 76% of Americans travel beyond one mile from their home each day. From April to October, the average number of miles traveled daily has increased by 10+ miles in many states, according to the data.
Of obvious note to marketers: the holiday shopping season is starting earlier this year. Granted, people will do a greater portion of their shopping online, but retail experts believe there is pent up demand for safe in-store experiences, too. At a time when people are craving physical experiences, investing in OOH makes sense. With the right creative, brands can create memorable, powerful advertising campaigns that aren’t lost in the digital stratosphere. Or they can use OOH in tandem with digital marketing.
Before the pandemic, OOH media providers were working to roll out digital arms, using technology and data to enable programmatic buying, audience targeting and improved measurement capabilities. For example, the nonprofit Geopath launched a data-powered ratings and measurement platform for OOH to provide “unprecedented audience targeting and measurement capabilities.” COVID-19 has accelerated countless trends in consumer behavior and marketing. Next up is the adoption of digital-enabled OOH solutions.
OOH’s new problem — handling demand
A COVID-19 vaccine will act as a symbol that it is officially OK to turn up marketing spends. OOH, particularly digital OOH, should get ready for a renaissance. Brands aren’t going to dip their toes in the water — they want to make a splash. Like consumers, they are eager for life to be “normal” again. The biggest problem OOH companies will face is handling an “overnight” increase in demand.
It’s hard to plan with so many unknowns: economic uncertainty, the continued waxing and waning of COVID-19 and vaccine development. But I believe OOH companies should consider investing in marketing, infrastructure and operations so they are ready when the demand spike hits.
Digital OOH spending will increase first, because it is easy to turn on and off, and marketers expect targeting and measurement capabilities. Airport advertising will come back to life quickly, too, because, like marketing spend, air travel will increase exponentially once the vaccine is available.
Next will be large format OOH — the billboard inventory. Brands will use this to stand out and cultivate confidence in consumers, investors and even their employees.
Next year will be one of tremendous growth for the OOH space — but not unless the industry is ready. Companies need the resources required to sell and service demand, and resource allocation will correlate to revenue as marketing spending increases. To prepare, OOH businesses should take the following steps:
- Identify the deficient roles as far in advance as possible and determine which dependencies tie to increases in ad revenue.
- Start the hiring process early as the job market may get more competitive as demand increases.
- Create a plan for how and when to hire or contract.
- Identify roles that can be contracted to create flexibility versus full-time roles that take time to ramp up.
- Create a plan for when you will pull the trigger on each role based on metrics, for example, number of clients, revenue, etc.
Rising to meet advertiser interest will be a challenge — but a far better one to face than what we have dealt with in 2020.
Source: James Heller
Photo: Ian Dunlop / Pixabay