Skip to main content

Advertising on Alternative Out-of-Home Media

Alternative out-of-home media spending surged 27.0 percent to $1.69 billion in 2006 and is projected to grow at an accelerated 27.7 percent rate in 2007, as brand marketers seek more effective ways to engage mobile consumers during their daily routines.

These are the findings of the first in-depth analysis of this burgeoning media segment, assessed by PQ Media. Alternative out-of-home advertising is one of the fastest-growing segments of the media industry, expanding at double-digit rates every year from 2001 to 2006 and posting compound annual growth of 22.6 percent, according to the recent PQ Media market study.

Alternative out-of-home media are distinguished by the use of innovative technology and concepts, such as video advertising networks and digital billboards, to connect with more elusive consumers in captive environments, including retail, transit, cinema and office locations.

Ironically, the trends of impeding traditional media consumer fragmentation and control, advertising accountability and the emergence of digital technology are the very catalysts stimulating the tremendous growth in alternative out-of-home advertising. Unlike its mass media peers, alternative out-of-home advertising is impervious to channel or web surfing and is immune to audience fragmentation.

The growth of alternative out-of-home media far outpaced that of the overall advertising industry as well as the total out-of-home media sector, which was one of the fastest-growing advertising sectors in the 2001-2006 period.

The overall advertising industry expanded 6.4 percent in 2006, while total out-of-home advertising increased 10.6 percent, amplified by the 27.0 percent growth in alternative out-of-home media, according to the report. Among the key trends PQ Media cites as driving the rapid expansion of alternative out-of-home media are:

- The perception among advertisers that these media provide high engagement, targeting options, proximity to point-of-sale, measurable impact and cost effectiveness.

- Data indicating that exposure to and recall of these media is growing as Americans spend more time commuting to work, walking in urban areas, waiting in transit hubs, and shopping at retail outlets.

- Research suggesting that the vast majority of consumers view alternative out-of-home media as favorable and educational.

- New technology enabling companies will launch digital advertising platforms that generate higher revenues than the conventional formats they replace.

Digital technology and creative positioning enable alternative out-of-home media to stay in tune with today's fragmented and fast-paced consumer market. Americans spend twice as much time outside their homes and workplaces today than they did just a few decades ago. As a result, the ability to reach target audiences in attentive venues through non-intrusive media has become very important.

Spending growth in each of the three sub-segments of alternative out-of-home media -- video advertising networks & screens, digital billboards & displays, and ambient advertising -- accelerated in 2006 with even faster double-digit upside projected in 2007, PQ Media found.

Video advertising networks is the largest sub-segment, accounting for 60 percent of total spending, led by companies like National CineMedia, Premiere Retail Networks and Captivate Network. Spending on video advertising networks and screens grew 28.0 percent in 2006 to $1.01 billion, with high double-digit growth in all four markets -- in-theater, in-office, in-store and in-transit -- according to the PQ Media report.

Digital billboards and displays is the fastest-growing sub-segment, as spending soared 55.4 percent in 2006 to $233.2 million, PQ Media found. Each of the four markets -- at-road, at-retail, at-transit and at-events -- expanded at accelerated rates, fueled by companies such as Lamar Advertising, Clear Channel Outdoor, and Reactrix Systems.

Ambient advertising, also called place-based media, increased 14.1 percent in 2006 to $446.4 million, according to the PQ Media assessment. The double-digit growth in alternative ambient advertising was driven by leaders like Floor Graphics, Montage Billboards, and Alloy Media + Marketing.

Popular posts from this blog

$4 Trillion Digital Transformation Upswing

As a C-suite leader, you're constantly bombarded with investment opportunities. In today's large enterprise arena, few initiatives hold the same potential as Digital Transformation (DX). Yet, securing ongoing buy-in from the board and other key stakeholders hinges on a clear understanding of market momentum and the return on investment that DX promises.  A recent IDC worldwide market study sheds valuable light on this critical topic. Let's delve into some key takeaways and explore what they mean for your organization's tech strategy. Digital Transformation Market Development The IDC study describes a market surging toward investment adoption maturity. Worldwide spending on DX technologies is forecast to reach $4 trillion by 2027, reflecting a compound annual growth rate (CAGR) of 16.2 percent. This exponential growth signifies an opportunity for industry leaders to leverage digital business tools and strategies to gain a competitive edge, with Artificial Intelligence (A