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As Americans leave major cities, will outdoor ads follow?

Buying out-of-home ads used to be so simple. Buy the top-10 markets and you were covered. Now, as a significant part of the US population has scattered across the country like dandelion seeds in the wind, marketers must be more thoughtful about their approach. While media buyers say brands may be slow to make the shift to buying secondary markets, the much-anticipated rise of digital out-of-home just might prove rewarding for early adopters who are following the trend.

Every other license plate in Florida is from New York, remarked a media buyer recently. This observation is part of an undeniable trend: many US consumers have migrated to secondary cities. Many may not return.

This adds a new and significant level of consideration to any marketer looking to make an out-of-home (OOH) buy as the US continues to open up. While purchasing OOH ads in the top-10 markets (like New York, Chicago, Los Angeles and a handful of other key metro areas) used to be the only box a marketer needed to check, things have changed – even if clients haven’t recognized it yet.

Today, cities like Austin, Santa Barbara, Nashville, Indianapolis and Denver must be considered, per Ubimo, a Quotient Brand. Each of these cities saw the largest increase in movement, around 340,000+ OOH properties nationwide for the week ended April 4 compared to pre-Covid.

Other cities that saw increased movement include Charleston, South Carolina, Boise, Idaho, Columbus, Ohio and Cheyenne, Wyoming – all of which are also experiencing a population influx due to relocations.

And then there’s Florida. The Sunshine State’s real estate market has been described as a circus. Paul Ryan, the former Speaker of House, says there is going to be a ‘big migration’ from New York to Florida and Texas thanks to lower taxes outside the Big Apple. Jacksonville, Florida, also saw great gains, according to Ubimo data. Gas Station TV (GSTV), which offers ads at the pump, ranked Jacksonville as the third-largest gainer in transaction volume.

The most popular spot per GSTV: Bozeman, Montana, where apparently the locals can’t find a place to live anymore because of all the Californians moving in. Bangor, Maine stole the second-place spot.

Suffice to say, many people aren’t just in the top-10 market demographics anymore. (Further proof of this fact in the Ubimo chart below.) So, what are marketers and media buyers going to do now that OOH ad spend is coming back?

An inflection point for outdoor advertising

There is no shortage of bullish research indicating that OOH ad spend will rebound. Group M, for example, predicts outdoor will grow 22.4% this year, 19.7% in 2022 and see single-digit growth in 2023.

When Angela Zepeda, chief marketer at Hyundai Motor America, worked out her launch plans for the new Tucson, OOH found its way back into the marketing mix. “Car buying is up. People are antsy and want to get out ... we are dipping our toe back into some of these OOH channels and formats where we couldn’t spend in last year. Now we’ve got these important launches to do, and we just need to be everywhere.”

Zepeda stuck with the major metros with a key focus on Dallas, Houston and San Antonio, Texas – all of which are big markets for Hyundai.

The return to OOH spending, in any market, is good news for a category that was crushed by lockdown. “Advertisers are gearing up coming out of a relatively soft Q1. I think it’s going to be a big Q2,” says Norm Chait, group director of OOH sales for Quotient, which owns Ubimo. “We are seeing re-emergence in larger markets and movement in lots of secondary cities.”

But given the migration at hand, will marketers’ media plans begin to reflect the new realities? Media buyers say it’s possible, but it won’t happen quickly. Martin Porter, head of OOH at Dentsu, says, “It depends on client and vertical. For automotive there could be bigger changes. If you move out of cities, you’re more likely to buy a car.”

Still, there are questions about the current patterns and whether the dispersion of urban dwellers is permanent, says Porter. “Once is a blip, twice is a coincidence and three times is a trend. We are in a blip or a coincidence moment, so clients are not shifting big chunks of New York or Los Angeles dollars to secondary markets yet. It will be an inflection point this summer. Will migration paths change?”

Digital OOH gains ground

While marketers may still be sold on major markets, at least for the time being, they are also becoming more receptive to digital out-of-home ads (DOOH). Digital signage options at gas stations, supermarkets, electric vehicle charging stations, malls and commuter hubs had been gaining steam until everyone was stuck on their sofas for more than a year. The allure is simple: marketers can swap out creative based on location, the weather or any of a number of other different factors. They can also measure, test and learn.

Hyundai’s Zepeda says: "Digital boards and programmatic buying just allows for a lot more flexibility. It allows us to change messages more rapidly or tailor those messages to that particular market. Anything you can do to be more relevant that speaks to a customer and their mindset or their voice, the better off you are. It feels like your brand understands them.”

It also allows marketers to reach secondary cities more easily. “There is more flexibility to be reactive, to optimize and be efficient,” says Helen Miall, chief marketer at Viooh, global programmatic digital out-of-home marketplace. “You have the ability to change as audiences move around. You’re no longer fixed to a specific location and you can use the data to make decisions as the audiences are changing.”

Barry Frey, chief executive of the DPAA, the global digital out-of-home trade and marketing association, says being able to ‘follow the audience’ is essential because of two key factors. “The trend is people want to be outside. You can’t hold people back. That trend is our friend. Also, we aren’t impacted by the disappearance of the cookie. We have our own good data. For us, if there’s no cookie, no problem.”

The dawn of the national outdoor ad buy

Marketers will always be drawn to the big, shiny vanity play buys like Times Square and Sunset Boulevard, but as DOOH advances, so does the opportunity to be much more pervasive. In fact, making national buys, which had previously been difficult, is now likely to accelerate.

Over the past couple of years, there has been a ‘connecting of the pipes’ that allows DOOH buyers to offer a national footprint. “You will see an increased share in other markets as we start pushing forward with more of a national offering,” says Michael Lieberman, US chief executive at Kinetic Worldwide. For marketers looking to broaden their reach, it’s less about adding cities and more about “thinking about what we can do on a networked basis. That’s the massive change we need to undergo as an industry – getting people to look outside of top-10, -15 or even -20 markets and thinking nationally”.

Keith Kaplan, global chief executive at Kinetic Worldwide, adds that the buying nationally also gives brands the chance to be always on. “You can always be there when they are ready to buy. You can be in front of them for the first mile and the last mile. It’s going to sound ridiculous, but this is a completely different shift in what OOH can be used for.”

Indeed, there is a lot to be optimistic about, says Dentsu’s Porter. “We are definitely seeing clients not just coming back and saying, ‘I will buy what I bought before.’ They are fully aware that people are moving around in different ways. Programmatic helps marketers target and optimize so much easier. This an inflection point in that channel ... OOH is on an upward trajectory.”

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