Outdoor advertising costs have returned to pre-pandemic levels
Supply and demand
Outside service providers such as Outfront Media and Clear Channel Outdoor confirm stocks are tight and prices are rebounding.
“There is an urgent need for marketers to come back to the industry. Demand in Times Square is off the charts, ”said Dan Levi, executive vice president and chief marketing officer at Clear Channel Outdoor. “Supply and demand. We have the ability to control prices.
“People are returning out of their homes again in huge waves, due to a combination of vaccines and pent-up energy,” says Jodi Senese, Marketing Director of Outfront Media. “We are seeing an incredible rebound in all markets,” particularly places where people tend to congregate, such as SoHo or the Meatpacking District in New York City.
Out-of-home businesses are hungry, eager to make up for lost revenue due to the pandemic. Outfront Media reported a 32.7% drop in revenue, from $ 385 million in the first quarter of 2020 to $ 259 million in the first quarter of 2021. Clear Channel saw a similar drop in revenue in the Americas over the course of over the same period, from $ 296 million in 2020 to $ 212 million in 2021. The largest drop comes from displays at airports, down 62.4%. Outfront Media and Clear Channel Outdoor will soon release their second quarter results: Outfront Media on August 5 and Clear Channel on July 29.
The increase is happening even as workers shift to a hybrid schedule, a recent CNBC study found that 45% of companies plan to introduce a hybrid workforce model. With vaccination rates and new Delta variant cases both on the rise, it is too early to assess the impact on plans to reopen businesses.
Immerse yourself in the public’s impressions
Many brands, eager to position themselves in front of an outside audience, do not fear a drop in public impressions.
“It’s almost like brands are willing to give up everything in terms of the number of days people are back in the office and will spend more to be one of those first brands to come back,” explains Rappaport. “It is 100% reflective of the way people generally act: run to take vacations and make up for lost time and lost events. It’s like brands have never seen OOH before.
“We think [OOH] is even more of a driver than before the pandemic, “said Kathryn O’Connor, senior vice president of branding, marketing and e-commerce for the La Colombe coffee brand and chain, which launched its summer campaign” Taste Your Cold Brew Dreams ”. in mid-July with a branded touring motorhome and a major outdoor and experiential advertising campaign in Los Angeles, Chicago and Washington DC “People crave personal interactions and real experiences, even at a distance of security.” La Colombe targeted billboards in places where consumers go to the grocery store and engage in outdoor activities, with data saved where the brand should spend more for areas with high foot traffic.
Senese says that even with prices reaching pre-pandemic levels, all prices are still determined through negotiations. If desired billboards or other stocks are already sold out, she says there is a range of formats that can appear in the same areas, such as bus shelters or mobile billboards on trucks.
Apart from supply and demand, OOH advertising is priced based on various factors, including audience impression volumes; the quality, size and shape of the stocks; location and environment; and creative abilities, says Jonathan Conway, chief operating officer of outdoor advertising agency Talon America, which has worked with brands such as Spotify and Sony Pictures.
Conway says advertisers should start securing purchases now. “In the first half of the year it was a more open market for OOH advertisers and a lot of campaigns were planned and bought just a few weeks before going live. In the second half of the year, advertisers plan more ahead, ”he says.