Outdoor Advertising and the ROI challenge
Outdoor Advertising: learn more about it
Coronavirus and the Outdoor Advertising Industry
As the drastic economic impact of coronavirus continues to spill, brands and agencies are forced to re-evaluate the current advertising methods they are using. Recently, the Interactive Advertising Bureau (IAB) surveyed nearly 400 media buyers and brands. The results were surprising: 74% think the coronavirus pandemic will have a larger impact on their advertising spend than the 2008 financial crisis. According to the President of Interactive Advertising Bureau, David Cohen, “Typically marketers will press pause for a moment, take a breath, assess the situation, replay and reevaluate.”
The traditional out-of-home advertising is expected to be largely impacted. The estimated ad spend declined 51% in March and April and another decline of 41% is expected in June 2020. Fewer people are outside reducing the appeal and effectiveness of billboards and DOOH. Advertising in malls, at bus stops, and bus shelter advertising are fast becoming replaced by in-home advertising. The impact of COVID-19 has kept the consumers inside their homes. Hence, the best ways to reach the audience will be to take your advertising message to them indoors.
Adzze has been re-evaluating the current tactics and adapting to a more sensitive message. The operations team has working on extending its reach to offer advertising methods that can reach the consumers at their safest place: at home. One of these tactics uses pizza boxes as advertising space. Think of this as small moving billboard that consumers receive in their homes and place on their dinner tables. Ad data demonstrated that this type of ads can lead to an 80% recall rate (8 out of 10 individuals recall seeing an ad on the pizza box) with an average ROI of 150%. This means, for every 1 dollar the advertiser invested in a pizza box advertising campaign, they received at least additional 2.5 dollars of sales. For more details, see the article Estimating the ROI of Pizza Box Marketing.
It does not matter what kind of advertising medium we are talking about. However, the return on investment (ROI) is key. Notably, outdoor advertising is the most popular avenue that many people can single out. However, if a question could be on your mind concerning this medium it most certainly would be; is the ROI for outdoor advertising worth the money?
ROI is a huge challenge for outdoor advertising
Unknown to many, spending on advertising is an investment. This is an investment because advertisers expect to generate more product/service sales from the visibility of the brand. Specifically, the logic of the expenditure is that the money spent on advertisement will generate more money through more product/service sales. The sales income should be enough to offset the expenditure and earn some more for profits. Therefore, ROI tells the advertisers whether the money spent on the ad campaign returned profits or not.
On the upside, the average ROI from OOH advertising is $5.97 for every single dollar spent. Nonetheless, this is a very optimistic estimate. The most conservative estimate is about $2.80 per dollar spent. Still, this is not an accurate interpretation of ROI for OOH advertising. This is because ROI means different things to different people. For example, a brand being advertised will measure its ROI based on the value of products sold after running the ad. On the other hand, other businesses will measure their ROI based on the brand awareness generated and so on.
Today, ROI is a major challenge for outdoor advertising sector. In particular, the number of people paying attention to ad displays is low. This is because of increased inattention as the number of distractions increase. Further, campaigns against OOH advertising media like billboards are on the rise. As such, the ROI from the media could be headed for a crash.
Largely, people try to avoid OOH advertising displays to maintain attention on the road if driving. Oftentimes, billboards are in plenty in urban areas. Here, people are always busy going about their business and they have little time for ads on billboards. Further, the rise of smartphone usage means that people are mostly on their phones. This implies that fewer people pay attention to their surroundings, including billboards.
Billboard costs are prohibitive
Inattention and ROI are not the only problems that users of billboard advertising face. In addition, accessing a space on the billboards costs a fortune. In expensive cities like New York and Los Angeles, a business is likely to pay over $40,000 to display an ad for 14 days. Why should a business pay this much without a guarantee for satisfactory conversion rates?
Several reports already identified the flaws of billboards as lack of targeting and tracking, low engagement with the target audience, high costs, low ROI and in many cases the issue of visual pollution and low brand recall. The targeting issues very often are addressed with alternative approaches as mobile billboards, digital OOH, ads on trucks and ads in places people don’t expect as flags, backpacks, inflatable objects, gas pump and balloons.
Stay-at-Home Ads will replace outdoor advertising
The use of OOH and billboards will most likely experience more decline in the coming weeks, given the growing number of cases of infection in the United States. Businesses that dearly need to get the word out about their enterprise will have to embrace new-age advertising to stay in business. This means more customers will abandon billboard advertising to adopt indoor ads; a strategy which brands trying to avoid the cut-throat cost of sign advertising have happily been using to market themselves in recent times.
The New York Times aptly described the effect of the pandemic on outdoor advertising as a ‘seismic shock’. Even Coca-Cola is among the companies that have limited their ad campaigns during the coronavirus crisis, the New York Times report says. Long story cut short; a lot of companies are hitting the brakes on billboard ads and other forms of OOH advertising and are also pulling back until the coast clears.
Door hanger delivery is the answer
Door hangers offer an ingenious avenue to reach customers in their homes. These items are cheap to produce, sometimes less than 50 cents. Once they are ready, all you need to do is to deliver them to target locations. The best way to go about this is to select the locations beforehand. This ensures that delivery is easy fast, whether you do it yourself or you hire a delivery team. Ultimately, your ad campaign will earn higher conversion rates compared to OOH advertising.