By: Chris Grosso, CEO of Intersection
Out of home advertising is poised for a strong 2023 as the secular tailwinds driving OOH’s long term growth will overcome any economic uncertainty.
The reason? Online growth is stalling due to increasing privacy regulations, while linear TV, radio, and print continue to lose audiences. Marketers are looking for ways to reach their audiences in a rapidly shifting media landscape.
The thousands of brands that gathered at this year’s Consumer Electronics Show recognized that meeting their marketing objectives required contextually relevant advertising that reaches target audiences.
OOH is especially well positioned to respond to these emerging needs. Its combination of location and dayparting will create powerful contextual signals. In addition, OOH’s ability to cut through the clutter, avoid fraud, and remain brand safe, make it a powerful alternative to online ads. Better measurement and attribution will further drive growth as marketers realize, on a dollar for dollar basis, OOH is simply a better investment.
Moreover, cities are thriving and foot and vehicular traffic is back to pre-pandemic levels. Audiences may be spending more time in residential neighborhoods, but the overall amount of people in most big American cities has largely returned to pre-pandemic levels.
The combination of the post pandemic urban renaissance and strong OOH growth should drive a great 2023 for OOH in major American cities. Maximizing the opportunity will require staying ahead of a few key trends.
- Street furniture will be increasingly valuable. iOS (and eventually Android) privacy rules will make it hard to target mobile phones with geotargeted ads. Street furniture (i.e., kiosks, bus shelters, benches) is a powerful alternative because it can precisely target ads to specific locations. In addition, digital street furniture can be dayparted— allowing for even more contextual relevance.
- Retail media will discover OOH. Retail media (ads in stores, near stores, and on retailer websites) will top $50B in 2023 in the US and was a huge theme at CES. Retail media advertisers will discover that OOH ads in close proximity to stores are an efficient way to reach consumers at or near the point of decision. The most innovative brands will start allocating some retail media dollars to OOH formats, often found within 100 yards or less of the store.
- Bus exteriors will be the most efficient way to reach a DMA. With linear local TV and print newspaper audiences shrinking, large format bus ads are becoming the only high impact way to cover a major metro at scale. Their large size cuts through the clutter, while the mobility allows them to cover the entire city. With better measurement and attribution, OOH operators finally have the data to prove the effectiveness of bus ads. Major advertisers will follow the lead of the innovative, smaller advertisers already successfully using the format.
- Programming will become a key differentiator. From train times, to the weather, to art, the best and most innovative OOH operators will realize that editorial content is crucial to engage and delight audiences. Great content will increase the value of the ad spots to consumers, and eventually advertisers. Forward thinking advertisers will look to align against content adjacencies (like they do in traditional media) to achieve contextually relevant placements.
- The flight to quality is on. Investment and innovation have driven a huge surge in out of home advertising signs. However, advertisers will gravitate to the best locations and the best formats, especially ones that have third party audience measurement.
All told, 2023 should be a record year for Out of Home – especially in the major American cities that are bouncing back from the pandemic. The best advertisers will continue to realize the power of the medium and continue to move spend into the category
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