Last September 7, I posted an image in Linked In of a billboard advertising itself to advertisers.
This was a picture I captured on my way to work. For some reason, on that day, I caught myself attracted not to the huge billboards with colorful ads, but to the incredibly high number of empty billboards I saw along the main highway I pass by every day. I counted at least 12 huge, empty billboards, many of them screaming for help from advetisers to advertise.
To my surprise, that single image post on Linked In became somewhat of a modest, viral hit on Linked In, achieving more than 3,000+ organic views in just four days - and still growing.
Two things I realized with that post. First, Linked In is an incredible platform for business. Since the takeover of Microsoft, it seems like people are starting to go to Linked In, not just to look for jobs, but to consume awesome content relevant to their professional lives. I myself find myself consuming great business and professional content on Linked In on a daily basis.
The second realization is that the whole idea of the #digitalshift upending long-time industries such as out-of-home advertising (OOH) is a theme that deserves a bit more analysis, and hence this article.
OOH Lost $2 Million in Revenue in Q1 of 2018 in the Philippines
Based on Kantar’s first quarter OOH report in the Philippines, OOH ad spending in the first quarter of 2018 in the Philippines was down 6% versus the same period last year. In actual money terms, this means that billboard operators lost Php100 million ($2 million) in revenue in the first quarter of the year, compared to the same period last year. On an annualized basis, that’s Php400 million ($8 million) of lost revenues by billboard operators at the current rate of decline. This is an incredibly huge number, if you think about how that translates to empty billboards and struggling OOH operators trying to make ends meet.
Digital Display Advertising: A Replacement of OOH?
The two hardest hit industries by the #digitalshift are print, which declined 22% year on year in the Philippines for the first semester of 2018, and OOH. Why are these two the hardest hit by the #digitalshift?
I think the reason for this is that OOH and Print Advertising is essentially the same advertising format as digital display advertising. Display advertising in essence is visually-driven advertising with short, to-the-point copy. Display advertising’s nature is that you need to deliver the advertising message in 3-5 seconds - the average length of time a person’s eye will catch a billboard, a print ad, a banner ad in a top website, or a display ad in Facebook.
They are essentially the same advertising execution, and in such a scenario, advertisers would much rather invest in digital display given its measurability, richer executions, and its ability to engage consumers and drive actual action.
In fact, I think moving forward, advertisers will increasingly plan their media around advertising formats and experiences, rather than channels. Display Advertising will be about using visuals + short copy in platforms like OOH, Print and Digital. Audio Advertising will be all about advertising in audio across platforms such as traditional radio, as well as mobile/digital music platforms like Spotify. Multimedia Advertising will be all about multi-media content delivered across multiple video platforms such as television, cable TV, Facebook, Youtube, Instagram, Snapchat, etc.
Can Digital Out of Home Save OOH?
Some of my friends suggested on my original Linked In post that what will save the OOH industry is the emergence of digital out of home advertising. If other markets are an indicator, there is reason to believe in this idea. In the U.K., for example, digital out-of-home spending now comprises 47% of total OOH advertising, helping the overall OOH industry ride the huge wave of the #digitalshift.
So should traditional billboard operators just tear down their current “static billboard” setups and convert entirely to digital? It’s a tough existential decision for OOH operators - the same existential, survival question faced by so many other industries like print, TV, music, etc, which have been pumelled by the #digitalshift.
There’s No Stopping the #Digital Shift
There is no stopping this #digitalshift from happening. The 6% decline in OOH spending in the Philippines is just a portent of things to come. Print is already declining by 22% year-on-year, so unless the OOH industry does something dramatic, there is no stopping this #digitalshift from accelerating the rate of decline in OOH.
Consider the fact that in many developing markets like the Philippines, digital ad spending is still under-indexed versus the global average. Digital ad spending in the Philippines, for example, is at 18% of total ad spend - compare this to the global figure, where digital ad spend is already at 43% of total.
Digital ad spending in many developing markets will continue to eat away at all the other advertising platforms, and will eventually hit the 43% global benchmark - all at the expense of other traditional channels like print in OOH.
The brutal reality is that OOH needs to innovate, and innovate fast. They need to disrupt their entire model, experiment with new approaches, or risk becoming completely obsolete in the digital age.
If you need help in making the #digitalshift, drop me a note at email@example.com, and I’d be happy to assist you.