US Real Gross Domestic Product decreased 1.5% in the first quarter of 2022.  A decrease for two consecutive quarters means a recession has arrived.  The recession could get worse if the fed raises interest rates and tightens the money supply to check 9% inflation.

Investors are asking what happens to out of home if there is a recession.  Let’s look at the impact of the last 4 recessions on US Out of Home revenues.

• In mild recessions (1992, 2001) out of home declines by single digits but recovers within a year.
• In a more severe recession (the 2019 great recession) out of home may decline by double digits and take a couple years to recover.
• Billboard Insider thinks the impact of the next recession will be mild on out of home because out of home has been picking up market share recently at the expense of other forms of media.  The impact of a recession, however, will be felt more intensely by alternative forms of out of home (e.g. mobile billboards and place based) as opposed to roadside billboards.  Mobile and place based were impacted most severely during covid and the great recession and can be expected to be impacted most severely during the next recession.
• Local and directional advertising will be less impacted by a recession.  Most local advertising in one yearly contracts.  The McDonalds restaurant which has the Exit 39 for a Big Mac billboard will be reluctant to lose a billboard they have been on for years just because of a weak quarter of two.
• National and brand advertising will be more impacted.  National ad campaigns were cut severely in the great recession and again during covid.  National campaigns are short-term so can be cut quickly.

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