Looking for an out-of-home billboard for an upcoming campaign or event? Then act quickly and be prepared to pay a premium.

The out-of-home (OOH) and experiential advertising sector is seeing a resurgence, with inventory in prime locations in short supply along with the pandemic-driven discounts that once were common. Prices have reverted to pre-pandemic levels as marketers race to reach people emerging from their COVID bubbles—even if their numbers are reduced by hybrid work schedules and concern over the fast-spreading Delta variant.

Brian Rappaport, CEO of OOH agency Quan Media Group, says that during the pandemic he secured a Time Squares screen for 10% of its normal cost, New York City tunnel units for 85% off and a $70,000-to-$80,000 unit on Sunset Boulevard in Los Angeles for $10,000 with a two-week turnaround time. His company secures out-of-home placements and experiential activations for mostly DTC brands including Away, Ro, Fresh Direct and Recess nationally, including large cities like New York, Chicago, Boston and Miami.

But that's changing as foot traffic increases and brands want to be in place in September, when many companies want employees back in the office, at least part-time; children go back to school and National Basketball Association and National Football League seasons start up again. “Where people are expected to be and where they’re going is different than last year,’’ says Rappaport. 

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For one of Rappaport's clients, a fashion brand looking for out-of-home space leading up to New York Fashion Week on Sept. 8, “there is not one good wall, whether on Houston Street or on Canal; anywhere down there is taken,” he says.

Outfront Media, one of the largest out-of-home media companies in the Americas, is also starting to sell out of brand train inventory, for which it charges $350,000 for four weeks for full coverage on 570 subway cars—what Rappaport calls the “crown jewel of out-of-home” for DTC brands. 

Supply and demand

Out-of-home suppliers such as Outfront Media and Clear Channel Outdoor confirm that inventory is tight and prices are bouncing back.

“There’s an urgency of the marketers to get back to the industry. The demand in Times Square is off the charts,” says Dan Levi, executive VP and chief marketing officer at Clear Channel Outdoor. “Supply and demand. We have the ability to control pricing.”

“People are back out of home again in huge waves, due to a combination of vaccines and pent-up energy,’’ says Jodi Senese, chief marketing officer of Outfront Media. ‘‘We are seeing an amazing rebound in all markets,’’ particularly places where people tend to congregate, including SoHo or the Meatpacking District in New York City.

Out-of-home businesses are hungry, eager to make up for lost pandemic revenue. Outfront Media reported a 32.7% revenue decline, from $385 million in the first quarter of 2020, to $259 million in the first quarter of 2021. Clear Channel saw a similar decline in its Americas revenue over the same period, from $296 million in 2020 to $212 million in 2021. The largest decline was from airport displays, down 62.4%. Both Outfront Media and Clear Channel Outdoor will release second-quarter results soon—Outfront Media on August 5 and Clear Channel on July 29.

This uptick is happening even as workers adopt a hybrid schedule, with a recent CNBC study finding that 45% of companies plan to introduce a hybrid workforce model. With rates of vaccination and new Delta variant cases both on the rise, it's too soon to gauge the impact on business reopening plans.

Dip in audience impressions

Many brands, eager to get in front of outdoor audiences, are not concerned about a dip in audience impressions.

“It’s almost like brands are willing to forgo whatever it is in terms of how many days people are back in the office and will spend more to be one of those first brands to be back,” says Rappaport. “It 100% mirrors how people are acting in general—racing to take vacations and make up for lost time and lost events. It’s like brands never saw OOH before.”

“We think [OOH] is even more of a driver than before the pandemic,” says Kathryn O’Connor, senior VP of brand, marketing and e-commerce for coffee brand and chain La Colombe, which launched its summer campaign, “Taste Your Cold Brew Dreams,” in mid-July with a branded roving RV and large OOH and experiential campaign component in Los Angeles, Chicago and Washington D.C. “People are craving personal interactions and real-life experience—even if at a safe distance.” La Colombe targeted billboards in locations where consumers go to the grocery store and experience outdoor activities, with data backing up where the brand should spend more for areas with high foot traffic.

Senese says that even with prices rising to pre-pandemic levels, all pricing is still determined through negotiations. If desired billboards or other inventory is already sold out, she says there are a range of formats that can appear in the same areas such as bus shelters or mobile billboards on trucks.

Outside of supply and demand, OOH advertising is priced on a variety of factors, including audience impression volumes; the quality, size and shape of inventory; location and environment; and creative capabilities, says Jonathan Conway, chief operating officer at out-of-home agency Talon America, which has done work with brands including Spotify and Sony Pictures.

Conway says advertisers should start securing buys now. “In the first half of the year, it was a more open market for OOH advertisers and many campaigns were planned and bought just a few weeks before going live. In the second half, advertisers are planning farther in advance,” he says.

COVID trends continue

Several OOH pandemic trends are continuing as people return to work or are simply becoming more necessary as COVID cases continue to spike. For instance, experts say QR codes in restaurants and on posters are likely to have longevity.   

Barry Frey, president and CEO at digital out-of-home trade and marketing association DPAA, says part of the reason the sector is seeing increased pressure on out-of-home inventory and pricing is due to new digital-focused, direct-to-consumer companies that saw a boom during the pandemic flocking to the medium. Brands including investing app Public, banking app Current, Kim Kardashian’s Skims and Kris Jenner’s new home cleaning and self-care brand Safely are just a few examples. There’s also been an increase from streaming platforms like Netflix and Spotify.

Senese adds that campaigns for telemedicine, weight loss and mental health brands are also on the rise.   

Another reason Frey says pricing has gone up is due to the data and flexibility marketers can now get with digital out-of-home—which rose to prominence right before the pandemic and is increasingly being leveraged. A new report from machine-learning, targeted-advertising platform Alfi found that 95% of advertising executives expect digital out-of-home to grow over the next two years, with more than half estimating that the growth will surpass $50 billion by 2026. Frey says the major ad agency holding companies are projecting double-digit increases for OOH in 2021, the strongest increases of all media outside of mobile.

“The value of an OOH impression is increasing in value due to better and increased data, programmatic and targeting capabilities,” says Frey, who points to new efforts by Comscore and Epicenter to measure the space, as well as mobile and location entities. “From the onset of COVID, programmatic trading enabled schedules to be easily paused, pushed and very importantly moved toward where target audiences existed across myriad screens and media owners.  This was and is all executed without the usual paperwork, time issues, contracts, and human negotiations, all demonstrating new agility, flexibility, targeting and value capabilities of OOH advertising during and post-COVID.”

Brands are continuing to use OOH to craftily grab consumer attention. On Tuesday, Blue Origin livestreamed Jeff Bezo’s first consumer space trip on giant billboards in New York, Las Vegas and Toronto, Judy, which sells emergency preparedness kits, used digital floating billboards off Miami for its latest campaign. The Farmer’s Dog recently took over the ferries transporting consumers to Manhattan. And in New York's Times Square this week, visitors can watch giant 3D waves falling over the form of a whale on one of North America’s largest and most expensive billboards from South Korea-based digital design company d’strict.

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