If you do any regular amount of driving on highways (or walking around in major cities), you’ve probably noticed the increased presence of high-quality digital screens displaying rotating advertisements over the past few years. Commonly referred to as “digital out-of-home” or “digital place-based” advertising, these electronic billboards are popping up in a wide variety of both outdoor and indoor spaces to deliver more targeted, relevant, and cost-effective advertising to consumers.
According to the Outdoor Advertising Association of America (OAAA), digital billboards make up a small percentage of the estimated 400,000+ billboards scattered across the United States, with around 2,400 digital displays currently in operation. With the Federal Highway Administration just giving its approval for advertisers to leverage “changeable electronic variable message signs” in 2007, the growing presence of digital billboards along the road and elsewhere has been quite substantial. More marketers and advertisers are putting at least some budget toward digital out-of-home advertising, which is expected to increase as more options become available.
Research firm eMarketer reports that outdoor ad spend is expected to reach $6.4 billion this year in the United States alone, and predicts this spend to increase to $7.6 billion by 2016. That’s a significant market with serious growth potential, and results in a lot of printing, especially of the wide format and grand format variety. We already know that digital media and advertising is impacting traditional print media spend related to publications, promotions, and even general collateral. Will digital media have a similar impact in the world of outdoor advertising?
There is certainly potential for digital media to have an adverse impact on traditional media. According to research conducted by another trade organization, the Digital Place-based Advertising Association (DPAA), around three-quarters of media planners surveyed indicated that digital place-based marketing will be part of their media mix spend in 2011 (note that place-based advertising also constitutes digital ads that are displayed inside taxi cabs, at gyms, in malls, and other “non-billboard” applications). That same research indicated that these planners are actually funding digital media by shifting spend from traditional outdoor advertising.
Of course, digital billboards are still relatively in their infancy, and do have some disadvantages. Ads are typically rotated every 8 to 12 seconds. If you’re advertising on a stretch of highway that is prone to traffic jams, each ad can be viewed by a lot of eyeballs. Conversely, with cars constantly zooming by at high speeds, the audience potential decreases (one of the advantages of a traditional, static billboard).
Furthermore, concerns have been raised about how distracting the bright, rotating ads can be to drivers and also to nearby residents. Massachusetts is currently conducting a crash study on the 11 digital billboards currently being piloted in the state. Prior studies reached different conclusions on whether or not digital billboards increase accidents, with further research needed. Residents of some cities with proposed digital billboards are battling them under the premise of preventing further commercialization of the landscape. Cash-strapped cities like Miami have quickly erected digital billboards to raise revenues, only to later run into legal problems with existing state and federal laws barring their placement. There are sure to be contentious battles between municipalities and media companies like Clear Channel, Lamar, Adams, and others that want to erect what some call “the next big advertising opportunity” and others call “blight” or “monstrosities”.
Regardless, there are plenty of places willing to try out digital outdoor advertising, as it has already made inroads across the United States and will certainly continue to grow. The overall outdoor market is large and on a growth path, but it’s clear that there is a shift in media budgets from traditional to digital in this space. Service providers, especially those with competency in wide/grand format and, more specifically, those that produce the billboards we see everyday, need to consider how they can get in the digital game. Could it be ad creation and preparation for digital formats? Could it be partnerships with out-of-home ad networks or even direct competition with these networks? There are many options, and they should all be explored.