#CoronavirusSA: Spending on OOH when we stay at home
by Remi du Preez (@tractoroutdoor) The ripple effect of lockdown on outdoor media owners and marketers has been quick, and cut-throat. Advertisers, understandably, are finding it difficult to justify their spend on out-of-home (OOH) when we’ve all been told to stay at home. While temporarily under siege, I advise advertisers and brands to look beyond lockdown to the new opportunities presented by outdoor.
As we watch the repercussions of covid-19 unfold in real time, we’ve only just begun to see the extent of its economic toll as it takes with it whole industries as collateral damage. OOH advertising is one of the industries that’s suffering crippling economic effects in these uncertain times and it’s rattled to its core. Advertisers have reacted rapidly, pulling their placements and spend across the board. The value proposition that OOH presents as a high-reach, high-frequency medium is being challenged.
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South Africa is not unique in this position, which mirrors the global pattern. In India, experts predict around a 6% drop in overall OOH spend from the previous financial year; in the US, outdoor media owners have seen a fall in share prices running in parallel to the 30–70% decline in consumer foot traffic. This is juxtaposed by the reality that, prior to the novel coronavirus pandemic, OOH saw what was widely regarded as an unprecedented global ‘renaissance’, with the international GroupM having forecast an 8% growth in the category.
While the current landscape is vastly different, advertisers would be wise to take the underlying reasons for outdoor’s resurgence into account and base their marketing decisions on long-term outcomes, rather than short-term panic.
Establishing a strong, consistent brand presence will carry companies through hard times. Brands that have developed strategies agile enough to navigate immediate hurdles while keeping their long-term vision firmly in mind will outperform competitors. Outdoor is uniquely positioned in that it derives the bulk of its success from broad-scale brand awareness, driving long-term behaviour change.
According to Google Mobility Reports, a 24% spike in residential movements has been captured as a result of lockdown, and advertisers might want to consider residential inventory [as long as these are legal — ed-at-large] as well as digital OOH (DOOH) inventory, in the form of roadside digitals, in the short term. Looking to the long term, consumers are getting a taste of the convenience that online shopping brings and some of these behavioural changes will remain post-lockdown. Ecommerce will draw massive benefit from complementary offline advertising. This is supported by evidence: given the increasingly cluttered online space, OOH has been shown to have a positive effect in conjunction with digital advertising. One study found that consumers are 48% more likely to interact with a digital advert after initial exposure to the OOH ad.
While temporarily under siege, I advise advertisers and brands to look beyond lockdown to the new opportunities presented by the outdoor industry.
High-value inventory is sometimes booked for years at a time, with only the creative changing at periodic intervals, meaning that prime stock is often scarce. Savvy advertisers are contacting media owners to book iconic holding sites now, taking advantage of the wide onset of cancellations across the industry. This provides them with the necessary leverage to secure quality inventory at fantastic deals, with added value.
Many media owners are also increasingly flexible in their offerings in an effort to assist advertisers and brands under pressure, eg providing extensions on media exposure; offering alternative payment arrangements to help clients which’ve been severely impacted; and proactively reaching out to several small businesses to offer free inventory in a community-minded effort to help those most vulnerable get back on their feet when lockdown is over.
I believe that those who support their community will see renewed customer loyalty when life returns to some semblance of normal. My advice to media owners is to look for creative new solutions to aid those who might be struggling to stay afloat.
Invest indirectly in communities
OOH also allows advertisers the opportunity to indirectly invest in communities, thanks to its revenue-share model, and this has a positive knock-on socioeconomic effect. On average, the industry pays an approximate R125m every month towards its inventory landlords — which are often schools, NGOs and tenanted buildings home to SMEs such as restaurants and offices. That billboard you see on the exterior of a school is used towards its funding, meaning that your adspend, in part, contributes towards teachers’ salaries.
And there’s a silver lining for advertisers prepared to ride out the storm: OOH is anticipated to become a go-to channel in the not-so-distant future. We saw it with the Great Depression and, more recently, the 2007/8 global recession. Once the threat lifts, people come out in their droves.
While OOH may mean a commitment in these tumultuous times, it’s important to bear in mind an old truism: “This too will pass.” It will be those companies that hold the long-term outcomes in mind which will reap the rewards and secure the loyalty of consumers.
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With over 11 years’ experience in the out-of-home field, Remi du Preez is the commercial director at Tractor Outdoor (@tractoroutdoor), a national OOH media owner. He is responsible for overseeing the strategic direction and management of the business.
This MarkLives #CoronavirusSA special section contains coverage of how the novel coronavirus, SARS-CoV-2, and its resultant disease, covid-19, is affecting the advertising, marketing and related industries in South Africa and other parts of Africa, and how we are responding. Updates may be sent to us via our contact form or the email address published on our Contact Us page. Opinion pieces/guest columns must be exclusive.