Media: All about ... Outdoor's ongoing success story

Outdoor has been going from strength to strength, Alasdair Reid writes.

Full marks for a cleverly worded press release from the Outdoor Advertising Association. Reporting healthy revenue results for the outdoor medium in the second quarter of this year, it trumpets: "For the 20th consecutive quarter, outdoor has achieved a healthy year-on-year increase."

Sounds amazing, and the first time you read it, you tend to get the impression of uninterrupted growth since the end of 2002. The real story is not quite as sensational as this, however. The OAA is tracking a rolling year-on-year comparison and not a continuous period-on-period growth story.

Such is the seasonal nature of the medium that January to March is never going to beat returns for the Christmas just gone. Sometimes the first quarter can seem grim.

But still, with revenues of £242.3 million in the second quarter of 2007, up 8.5 per cent on the same period last year, this is clearly a medium in robust health. And it's all the more surprising for the fact that this has been a sector that is facing a number of potentially damaging distractions.

For instance, the management upheaval at Clear Channel at the beginning of 2006, following the shock departure of its chief executive, Stevie Spring. Or the collapse of Maiden Outdoor, and its subsequent acquisition in May 2006 by the US outdoor company Titan.

The effect of all this could have been damaging - especially since this is the sector with arguably the least-convincing digital credentials, for all its determination about installing electronic screens in all manner of locations, from railway station concourses to gyms.

But advertisers don't believe this is an outmoded advertising channel - and, interestingly, growth is not merely based on tickling incremental spend out of a hardcore of loyal users. It's getting through to new customers, too - the figures just released show Procter & Gamble, for instance, becoming a top-ten outdoor advertiser for the first time in living memory.

So what's the medium's secret?

1. When it comes to the big picture, the outdoor medium pitches itself rather cleverly - and is succeeding in having its cake and eating it. On the one hand, it points to continuing fragmentation in radio and TV audiences, and argues that outdoor is the last true broadcast medium. On the other, it points to the emergence of destination media (gyms, clubs, bars, retail environments) as a targeted and intimate communications channel. The high-spending younger demographics spend more time out of home these days - they work longer hours and have the spending power to play harder, too.

2. It has also been astute in selling the cut-through you can achieve with iconic creative work. Aside from the Sony Bravia campaign, there's been little in the way of memorable TV campaigns in recent years. Ditto radio and press. And no-one has shown even the remotest interest in creating iconic work online. The outdoor medium has been making much of its iconic heritage - the latest example being work for Marks & Spencer that played a large part in reviving the retailer's fortunes.

3. Then there's the investment on the side of the media owner that has followed consolidation. Screen-based initiatives have grabbed the headlines, not least the digital panels that CBS is introducing as part of its complete overhaul of London Underground's inventory. More traditional formats have benefited, with back-lit vinyl now common in roadside sites that previously would have featured wood, paper and paste. "From our (media owner) point of view, this is perhaps the single most important factor," Jeremy Male, the UK chief executive of JCDecaux, says.

4. And then there's the reason rival media owners cite for outdoor's good health - outdoor media owners offer a higher commission rate. It's 20 per cent or more, compared with the historical rate of 15 per cent offered in print, TV and radio. This slice of commission supports the existence of specialist outdoor media agencies. And these, by their very nature, act as an embedded generic marketing body for the outdoor medium.

5. The medium's main worry remains research. Its audience measurement body, Postar, was set up to measure audiences for conventional large-format roadside hoardings, and has struggled to integrate even the most basic of transport formats. Back in November, Postar began a review process to look at expanding the types of media it measures, and if its methodologies would be updated. An announcement of the review's findings is expected in September.



- For Aegis, WPP and, to a lesser extent, Interpublic, the owners of the UK's three main poster specialists (Posterscope, Kinetic and IPM respectively) growth in outdoor is always welcome. Thanks to its high commission rates and other incentives for buyers, this medium is regarded as a cash cow. Interestingly, though, these agencies are choosing to invest ever larger sums in their own research, both on a campaign-specific basis and to investigate broader phenomena - for instance, consumer insight studies investigating the sorts of moods consumers tend to be in when they're exposed to outdoor advertising.


- Having got their heads around the strengths and weakness of digital channels, particularly search, advertisers are returning to that most fundamental of questions: "How do you make brands famous?" Search will never do the trick on its own. Neither will all manner of niche opportunities, no matter how cute. Sometimes, you really do need to go back to basics - a big noise on a broadcast medium. That will continue to be one of outdoor's great strengths.


- Trebles all round. Except at Titan, where that sort of thing isn't done any more. Longer term, though, audience research remains the industry's Achilles' heel. Postar has to deliver.