Out of Home
A waking nightmare – that’s how the majority of media owners will view the last 18 months. Recession fears, the advertising slump, the threat of war ... all have had their impact on the bottom line. Yet, in the midst of this stagnation, one sector has kept on growing – outdoor.
In February, the Outdoor Advertising Association (OAA) announced that the sector’s revenue had grown by 2 per cent in 2002 – impressive in the context of the general downturn. Is this a sector whose time has come?
Outdoor advertising offers many possibilities, ranging from massive national billboard campaigns to branding on cabs, cars and public transport, from point of sale posters in supermarkets to plasma screens in pubs and ambient executions in washrooms.
“Outdoor takes in the entire day,” says Alan James, chairman of the OAA. “It can offer the big broadcast medium aspect, or it can be very precise, targeted by location. It offers the ‘wow’ factor of event advertising at one end of the market and branding in shopping trolleys at the other. As consumers move through the day, outdoor advertising can keep up with them.”
As traditional media owners struggle with the impact of changes in cultural habits and the rise of new technological platforms, outdoor has come to prominence precisely because it offers a totality of advertising options in a context that suits key demographic groups.
“There have been push factors from other media when it comes to explaining the industry’s growth,” says David McEvoy, marketing director at JCDecaux, one of the biggest players in the outdoor sector.
“In a multi-channel world, the TV market is fragmenting. Only 50 per cent of the population watch ITV for two hours a day any more. Radio and the national press are having similar problems.”
McEvoy points out that wider social and economic pressures are also playing a part in outdoor’s market growth. “Britain has a burgeoning out of home culture,” he says. “It’s a growing trend. People in the UK spend the longest hours commuting, the most time in work and more time on leisure when compared to Europe as a whole.
“It all adds up to a very viable marketplace.”
The pushes from without are being matched by pulls from within.
SiÃ¢n Davies, chief executive at research group The Henley Centre, points to the industry’s professionalisation and consolidation as powerful reasons for the outdoor sector’s successes.
“Media owners within the sector are promoting themselves more aggressively to advertisers than ever before,” she says.
“Advertisers are, in turn, seeing what outdoor has to offer in terms of building awareness and launching brands. Additionally, when compared to TV, the costs are very favourable.
“In an economic downturn, when it comes to evaluating cost-effectiveness, advertisers can see that outdoor offers good value.”
Recent consolidation has seen four big media owners emerge within the industry: JCDecaux, Clear Channel UK, Viacom Outdoor and Maiden Outdoor.
This market consolidation has provided the sector with a further impetus – as Davies points out, the presence of the big name players has boosted advertiser confidence in the sector as a whole.
She adds: “In a professional industry, advertisers can be sure that posters will go up on time. This confidence in deliverability has boosted interest, with a resulting effect on growth.”
Equally, a consolidated market has pressurised the big names into ploughing more money into investment, with concomitant product innovation.
The Clear Channel UK brand, which includes Adshel (bus shelter advertising), Clear Channel Billboards and Taxi Media (liveried taxi advertising), provides a case in point.
Formerly known as More O’Ferrall, Clear Channel Billboards has invested £100m in a new company name and identity. Acquiring Score Outdoor in 2002, it is currently re-branding and upgrading all its poster sites. New formats have also been pioneered, such as Golden Squares (20ft by 20ft) and More Squares (10ft by 10ft), the UK’s only square billboards.
“Investment is a crucial priority for us,” says Yvonne O’Brien, marketing director at Clear Channel UK. “We have a pointed emphasis on quality, as well as new technology and formats.
“Market consolidation is helping the buyers’ side, as competition has got stiffer among the big players. Of course, in such an environment, we are all striving to differentiate ourselves and extend the sector further.”
Strong competitive pressures within outdoor are pushing the main players to provide better quality products. And new technology is very much at the forefront of this.
Maiden Outdoor has come to the party with its Transvision digital screens, large format displays currently being utilised by the BBC. Live feeds from the channel’s News 24 digital offering are being broadcast via Transvision at Victoria, Euston, Waterloo and Liverpool Street stations.
“The screens are helping push the BBC brand in a number of key locations,” says Ann Jonas, marketing director at Maiden Outdoor. “These places have massive commuter numbers and good dwell time. New products are offering better coverage and more choice.
“A few years back, outdoor largely meant roadside posters. Now, with better illumination, new products and improved repro, the industry is manifesting greater diversity and different modes for advertisers’ needs.”
A similar outdoor innovation is in development by Screen Networks, a company that intends to install digital media screens in up to 40 shopping centres across the UK which allow real time information to be broadcast to shoppers.
The firm has already installed screens into the White Rose Shopping Centre in Leeds and MD John Harrison says that by the end of 2003 they will be in seven UK shopping centres.He is confident that there is a bright future for a company such as his: “The future holds no bounds for companies such as Screen Networks. We are already working on SMS interaction with the screens and at linking the system with retailers EPOS systems to react to sale activity in stores. The company is also able to react to the changes in the demographics of the shopper by tailoring the programme content to match the audience.”
It is with some irony that TV’s media owners are increasingly looking to the outdoor sector to place their messages.
Outdoor has been called “the last broadcast medium” – with some justification when one looks at the players involved.
“ITV, Sky and the BBC are all using outdoor,” says McEvoy. “The BBC has made a massive commitment, with its appointment TV approach. There are so many brands involved – ITV, Channel 4, Five, Heart FM – different media owners, all looking to outdoor for self-promotion.”
However, outdoor is not for the fainthearted. Perhaps more so than any other medium, bad creative is exposed on the billboard. The industry’s measuring system, Postar, demands that consumers actually look at the media it measures. Since people can just walk away, the creative has to be spot-on.
“Good posters are unavoidable; the medium finds you 24 hours a day – without fear of being switched off, turned over or tuned out,” says Stevie Spring, chief executive of Clear Channel UK. “But what you see is what you get. And if you see nothing, you get nothing.”
Though outdoor can offer the scope for great creativity, legibility is key.
“If it can’t be seen, there’s no point,” says McEvoy. “One of outdoor’s key strengths is that it can provide real media cut-through with single, strong brand messages. But there is no hiding place.”
McEvoy points to campaigns such as Colgate’s toothpaste posters as an example of strong brand definition: “They’re simple posters – red background, white lettering to represent toothpaste – but they’ve been going for five years. A consistent, readable visual style delivers.”
Though outdoor has been one of the only media success stories in these recession-haunted times, the bathetic OOHMA controversy cast something of a shadow on proceedings.
The Out Of Home Media Association split away from the OAA in Autumn last year, claiming to represent the ambient sector. But, within six months, it returned to the fold.
The OAA’s chairman believes the organisational divergence, though amicable, was based on something of a false supposition.
“Ambient is part of the outdoor approach,” says Alan James. “Under the auspices of one trade body, we can progress the entire industry more easily. If separate organisations are created, instinctively there is some dismissal of the ‘other side’. Since the OAA straddles all forms of outdoor, it was a bit of a non-starter. A united organisation offers a better picture.”
The outdoor sector is in a strong position within the UK media market. Unified under a single, well-respected trade body, the sector offers good value and increasingly innovative practices.
With Postar’s new inclusion of transport data in its mix, advertiser confidence is set to grow and the industry looks well placed to achieve a 10 per cent share of the market in the foreseeable future.
Favoured by wider media fragmentation and changing demographic behaviour, outdoor is a sector that truly has come of age.