US Out-of-Home Ad Spend Rises Again in Q3; Digital Fuels Growth Worldwide

December 6, 2018

Another quarter, another rise in US out-of-home (OOH) ad spending. This time OOH ad revenues grew by 3.8% year-over-year during the third quarter, per the Outdoor Advertising Association of America (OAAA), as the sector continues to roll on for closing in on a decade now without a single quarter of decline. For the year-to-date, industry spend is up by 3.7%.

Notably, the OAAA revealed figures on digital’s position within the broader OOH advertising industry, indicating that digital out-of-home represented more than one-quarter (28%) of the total during this past quarter.

That’s a considerably lower percentage than estimated by PwC earlier this year, though. In its forecast, PwC tallied digital at 40.7% of total US OOH ad spending this year, with that figure expected to grow to 47.9% share in 2022 on the back of a higher 2017-2022 compound annual growth rate than physical OOH (8% and 0.4%, respectively).

PwC’s forecast implies that virtually all growth in the US out-of-home advertising sector will come from digital rather than physical OOH. A recent forecast from Warc arrives at a similar conclusion, calling for digital to account for all of OOH’s growth on a global basis from this year through 2021.

Warc’s forecast sees digital out-of-home ad spending increasing by 10.1% each year between 2018 and 2021. Digital is expected to occupy 37.3% of worldwide OOH spending this year, up from 34.8% last year, less than one-third (32.4%) in 2016 and less than one-quarter (22.7%) in 2012.

Tech Brands Up Spend

Tech brands have been spending more on US out-of-home ads in the recent past: almost one-quarter of the top 100 advertisers in 2017 were from the technology sector.

Results from the third quarter suggest that tech brands remain invested in out-of-home. Apple was the second-largest advertiser by total spend, behind only Geico, while Amazon (to the extent that it’s considered a tech, rather than retail brand) was the 5th largest. Moreover, the OAAA notes that 14 tech brands increased their spend by double-digits year-over-year, including Amazon, Facebook, Microsoft, Netflix, Oculus, and YouTube.

In terms of industries:

  • The Miscellaneous Services & Amusements sector was by far the largest industry spender in Q3, accounting for almost one-quarter (23.2%) of total spend, including a 7.5% increase in investment year-over-year;
  • The Government, Politics & Organizations industry was the fastest-riser among the top 10 in terms of spending, with the 16.2% year-over-year increase likely a result of political advertising for the midterm elections;
  • The Insurance and Real Estate sector also hiked its spend by a considerable amount, with a 15.6% rise year-over-year; while
  • The Restaurant (-12.2%) and Automotive Deals & Services (-6.1%) sectors were the only among the top 10 to have a decrease in spend.

About the Data: OAAA notes that it “issues full industry pro forma revenue estimates that include, but are not limited to, Miller Kaplan and Kantar Media (which is not adjusted to reflect changes in data sources), and member company affidavits. Revenue estimates include digital and static billboard, street furniture, transit, place-based, and cinema advertising.”

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