With marketers seeking to trim their spend at every opportunity, outdoor advertising is operating at the sharp end of this recession. As a medium that has often been used to amplify campaigns on other media platforms, such as TV, outdoor has been particularly exposed to cutbacks.
However, research from the Outdoor Advertising Association (OAA) suggests that, far from being an ancillary medium, poster campaigns can be just as effective at lifting sales as TV, press and radio executions. In some cases, outdoor performs even better than its rivals.
The research suggests that outdoor is particularly effective when used in conjunction with other media. It says poster ads can help hammer home marketing messages and prolong the afterglow from TV and press advertising.
For the study, commissioned by the OAA, BrandScience analysed 400 brand case studies. It compared the ROI garnered by campaigns through different media. Data on adspend and corresponding sales uplifts was supplied by brand owners.
Peter Charlton, sales director at poster contractor CBS Outdoor, says the outdoor industry has lacked the econometric case studies to prove it can increase sales. Previous research has looked at the way it boosts awareness and its role in enhancing campaigns in other media. 'This research was commissioned by the industry because we are certain it works - and we wanted to provide brand owners with hard, econometric evidence,' Charlton says.
The study focuses on retailers and examines the sales increases that result from outdoor adspend. BrandScience concludes that outdoor performs as well as TV in boosting sales for retailers, although both are ranked second to print. According to the analysis, for every £1 retailers spend on outdoor advertising, their sales increase by £3.57, the same increment as TV campaigns. When retailers spend £1 on print advertising, by contrast, they get an increase of £6.23. If production costs are taken into account, posters outperform TV and close the gap with print.
One crucial finding is that ROI increases greatly as outdoor budgets grow. The report concludes there is room for retailers to increase their share of spend on outdoor.
Pip Hainsworth, marketing director at contractor Clear Channel Outdoor, says: 'There has been a lot spoken about TV being the most effective medium, but when you dig deeper and look at everything on a level playing field, outdoor is a central part of the media mix. It enhances TV, press and direct marketing.' She accepts that press appears to perform best for retailers, but believes that with newspaper circulations in decline, advertisers are being forced to look to alternative media for campaigns.
JCDecaux managing director for sales Spencer Berwin says more retailers are turning to poster campaigns as an alternative to press. He says the outdoor industry has become adept at competing with newspapers and is now able to do last-minute price changes on poster campaigns that rival the speed and flexibility of press ads. 'We've been bringing the battle to newspapers and are delivering campaigns at the last minute. And we've been taking a lot of revenue as a result,' says Berwin.
The BrandScience study compares retailers' campaigns that use an element of outdoor with those that exclude it. It finds that the return on print spending is boosted 34% to £5.73 per pound spent if outdoor ads run alongside newspaper campaigns. Direct marketing campaigns are enhanced by 61%, to £1.55 for every £1 spent, when backed by outdoor ads.
This research follows a BrandScience study published earlier this year that examined the effectiveness of outdoor advertising across a range of categories. It found that outdoor gives an ROI similar to or greater than TV ads for financial services and retail brands. Again, print outperforms all rival media in these categories, but outdoor outstrips TV and print in telecoms advertising. Posters are the most efficient medium for travel brands, although TV performs best for leisure.
The report also looks at the efficiency of outdoor for FMCG advertising. It concludes that TV is 'only 5% more efficient than outdoor advertising' for this category.
If the very high production costs of TV advertising are taken into account, outdoor emerges as the most efficient medium, bringing in an extra £1.20 in sales for each £1 spent.
Again demonstrating the benefits of integrating media, the study finds that TV ads perform better when complemented by an outdoor campaign.
Charlton notes that many FMCG brands are spending more on outdoor and moving away from TV. 'Cadbury was a heavyweight TV advertiser with small POS advertising, but now it does a lot of outdoor,' he says. He also points to increased use of outdoor by Johnson & Johnson, GlaxoSmithKline and Mars.
The outdoor sector needs all the evidence it can gather to persuade marketers to keep pumping a healthy share of their budget into the channel, especially while overall media spend is falling. Poster contractors believe that BrandScience's econometric research adds substantial backing to their case.