The Impact of COVID-19 will change the Billboard Advertising Industry
If expert analysis and market forecasts so far are anything to go by, OOH advertising agencies will need to rethink their strategies before the damage deteriorates to them bleeding clients too. According to a survey conducted by the Interactive Advertising Bureau, it is believed that traditional out-of-home advertising is expected to suffer (Forbes) an estimated ad spend decline of 51% for March and April and a decline of 41% for May and June. In the revised March
2020 Ad Forecast released by MAGNA, a company which provides strategic investment and media intelligence it is expected that total linear ads (National and Local TV, Radio, Print, and OOH) sales will decline by -12%. OOH, and print media are expected to take a hit of -12% and -25% respectively. If the lockdown should extend beyond the April 30, the blow might be below the belt because current realities will worsen.
So before things return to normal, the question is: “what is the best way to survive?” Many ad agencies have reduced marketing drives via billboards and signs since companies that buy ads have held back their dollars. This only makes sense because people who are supposed to see those billboards are now inside their homes. Digital media has also been negatively impacted but has remained fairly steady so far. Magna expects digital advertising to be more resilient at +4%, especially following the spike in the demand for home entertainment. The world Economic Forum noted that the crisis presents both opportunities and challenges. Advertisers are now exploring innovative and unconventional methods of advertising which are directed indoors.
Billboards pricing will become overrated
Billboards are a prominent sight on the side of many roads across the world. Indeed, the billboards make up a significant share of outdoor advertising media because of their relative effectiveness. However, it is common for advertisers to earn returns that are inferior to the price of billboard advertising. It makes no sense to spend almost $20,000 per month on a single billboard and only to earn less. Specifically, small businesses find the cost of renting a billboard too high. This is because they would soon run out of business if they spend that much on advertising. For some reason, the price of billboard advertising for small businesses is nonsensical. They include the following:
Admittedly, many people see billboards in a single day. For example, more than 379,000 vehicles use the 405 Freeway per day. Assuming each vehicle has two occupants on average, then over 758,000 people use the freeway per day. Interestingly, the impression rate of an ad would be huge if just 3/4 of the people spot your ad. Unfortunately, that may happen but the conversion rates are disappointing. This is because most of the people that see the ad have no intention to engage with your brand. Particularly, the problem is that you are not targeting the right audience.
Billboards are not attractive advertising methods. Most digital ads creation companies have put a temporary stop on ads creation. A reasonable overview of the current crisis wrought by the COVID-19 spread shows that making new ad videos may just end up as a waste of time and money for the ad shoot companies as well as it is for the owners of the business. In the coming weeks, ad buyers in the USA will tilt towards new advertising ideas the more. All methods of advertising that serve as workable alternatives to OOH advertising will shine as saviors. And they’ll shine the more if they provide equally satisfying results for the clients.
Traffic jams might be a menace on many US roads but that means a different thing to advertisers. Interestingly, the longer people stay stuck in traffic, the higher the rates of exposure to an ad on a billboard. However, many people spend their time in traffic reading stuff on their smartphones. As a result, few people notice the billboards. Even if they did, their attention would immediately turn back to the phone. Eventually, few people will make direct actions after viewing the message on the billboard.
The Price Of Billboard Advertising
For starters, movements like Scenic America want authorities to do away with billboards. Particularly, their contention is that the billboards are “sky trash” and they destroy the country’s scenic beauty. Interestingly, some cities are already rolling out legislation aimed at curtailing billboard advertising. In New York City, a free app is helping New Yorkers to virtually purge billboards from their view. Notably, such campaigns hurt the effectiveness of billboard advertising.
There are factors that influence the high costs. Besides the cost of installing a billboard, advertisers may end up paying maintenance costs. This may eventually push the trues cost of billboard rental to unsustainable levels. The price of billboard advertising depends on format, circulation, demographics, and impressions. Traditional billboards cost $14,000-20,000/month in larger markets. It takes a considerable time, energy and money to advertise with billboards. On the top, most billboard companies require advertisers to close long-term contracts. If your campaign strategy requires flexibility and multiple messages delivered at specific times, billboards are not the right media.