A new paper, How Out-of-Home Advertising Works, has just been released by Clear Channel Outdoor, Phoenix, Arizona, which engaged MarketShare Partners, Santa Monica, California-based cross-marketing optimization company, to explore the use and effectiveness of OOH advertising, evaluate the financial contribution of OOH as part of a balanced marketing mix, and discuss how marketers can make more informed decisions regarding their marketing budget allocation.
While there is no breakdown of digital out-of-home in the mix, most of the general information would apply to it as well. And it does note that Digital OOH provides marketers with the ability to more finely target advertising creative, as well as update messaging on a more frequent basis, with less of the traditional production costs associated with static billboards.
The main findings – no surprise here – show that Out of Home is an impactful marketing vehicle that contributes to a brand’s overall advertising campaign’s effectiveness. OOH not only provides a direct sales lift by increasing brand awareness and consideration, but compared to other media, can also increase the effectiveness of other marketing vehicles lower in the purchase funnel.
“After careful analysis of thousands of marketing optimization models, and considering decades of research and applied marketing science, independent research from MarketShare Partners conclusively shows that OOH is an effective marketing vehicle and should be included as a component of the optimal marketing mix across a broad range of industries,” says Debbie Reichig, senior vice-president of business development and marketing, Clear Channel Outdoor. “This report gives marketers proven models that show OOH not only provides a direct sales lift by increasing brand awareness and consideration, the medium can also increase the effectiveness of other marketing vehicles including TV, radio, print and online.”
The study also describes several generalizations that marketers should keep in mind when making marketing allocation decisions and considering the use of OOH as an advertising medium, including that:
- OOH advertising has been shown to drive significant incremental sales lifts comparable to and often greater than other drivers;
- The optimal OOH allocation lies between 5% and 25% of the total advertising budget for the majority of products and brands;
- Including OOH in the media mix, for industries and products where it provides observable sales lift, makes other media more effective;
- OOH, as well as other marketing channels, has an indirect impact on sales.
- OOH can provide marketers with the ability to identify and focus their spending in the Designated Market Areas or geographic areas that provide the greatest response to their product and marketing efforts, in addition to the direct impact on sales;
- OOH can provide a significantly higher sales lift in conjunction with TV when the creative messaging is coordinated across platforms;
- OOH can provide a significantly higher sales lift in conjunction with Radio when there is a call to action.
The paper notes that marketers spent $5.9 billion in 2009 on Out-of- Home advertising, and that, depending upon the advertising creative, outdoor advertising can build awareness, communicate product specific features, or generate excitement about sales events. Often, OOH campaigns have a strong ‘go local’ focus, working well in supporting local and sponsorship-driven events by increasing awareness and consideration.
Further, the paper notes that OOH can target consumers geographically, which makes it impactful for businesses in the retail, service, and tourism industries. Not only does a billboard advertisement reinforce brand messaging that a consumer has seen or will see in other media, it also provides marketers the opportunity to intentionally drive consumer interaction with other media, such asmobile and online activities.
“Today’s Out-of-Home industry is experiencing a fantastic transition, with cutting edge technology expanding our capabilities, and game changing measurement giving marketers new tools to evaluate our delivery,” said Rocky Sisson, executive vice-president of sales and marketing at Clear Channel Outdoor. “It’s just the right time to offer this new study from MarketShare Partners that helps show how to optimize OOH’s value in the total media mix.”
Clear Channel Outdoor anticipates being able to provide marketers in the near future with data-based optimization examples for specific industries developed by MarketShare Partners to aid marketers in understanding how to determine the optimal use of OOH in their own marketing programs.