Brighter forecast for outdoor

The news that Texaco plans to sell outdoor advertising space on its petrol forecourts, with six-sheet and 48-sheet posters offered to advertisers across its 1,000 UK outlets, shows the inherent resilience of the outdoor advertising market.

There were frequent warnings of impending doom last year, with a profits warning from Maiden in the summer, and (seemingly the final nail in the coffin) the Government’s announcement in December that it plans to go for an early ban on all tobacco advertising.

But the doldrums of the summer were caused largely by a fall in poster advertising while the World Cup was being held in France, with outdoor advertisers delaying spend until later in the year. And any fall in spend was more than made up for by a near sell-out at the end of the year, according to the latest figures compiled by outdoor media specialist Concord.

It’s not just inflation, Nigel Mansell, managing director of Concord, says: “Advertisers are paying more, but they’re paying for something that’s better and that’s delivering a bigger audience.

“There’s been an awful lot of investment from the media owners, so in many cases the same site is more valuable. There’s more illumination out there, which drives added revenue. The six-sheet market has expanded rapidly.”

The improvements explain why “there’s a disparity between rate inflation and revenue growth. The contractors have more sites and they’ve got a better product”.

People are also travelling by car more, says Mansell, so individual sites are delivering higher audiences. And while more car journeys are being made, fewer of them are for work or commuting purposes, and more for leisure or shopping, “putting people into a more receptive frame of mind”.

If the tobacco ad ban happens, it will have a minimal effect on the industry as a whole, Mansell says. “It contributes just under four per cent, and revenue growth from other areas has been more than covering that.”

It may have a greater effect on some smaller regional media owners, however, because some of them have a much higher concentration of tobacco advertising. “The major contractors have been trying to wean themselves off tobacco over the past few years,” says Mansell.

The Government is now talking about a possible anti-smoking campaign – and where better to place ads than on all those poster sites outside schools?

Concord’s figures indicate that the total spend by clients on outdoor media in 1998 – including ambient – increased by a more than healthy 11.4 per cent over 1997 to reach a total of 528m, up 54m.

Concord’s overall estimate of the size of the total outdoor spend is based on figures from MMS and on data collected from media owners. But Concord also provides a more in-depth analysis which concentrates on the traditional poster market, using data from MMS (adjusted to take into account a rate change by MMS in 1998).

While four-, six-, 32-, 48-, 64- and 96-sheet formats are covered (as are roadside specials), bus and taxi media, the ambient sector and “other sized” posters are not included.

According to this analysis, growth in outdoor in 1998 was 9.5 per cent year-on-year – still a healthy increase, but obviously not as large as the overall figure.

Unilever was the client company that spent most on outdoor advertising last year, with a total budget of 10.4m, while McDonald’s was the second biggest spender, with a budget of 7.8m.

The highest spending sectors were entertainment and media and motors: both spent just over 54m and each accounted for 14.4 per cent of the market’s poster spend. Other industries which spent significant amounts on posters were business and industrial, and food and finance.

At the other end of the spectrum, the smallest spending sectors were: household appliances and household equipment (both of which accounted for just 0.5 per cent of the total spend); property (only 0.4 per cent); and mail order, with 0.2 per cent of the total.

In pure cash terms, the biggest source of “new” investment in outdoor was the business and industrial sector, which spent 41m in 1998 against 33m a year earlier, a year-on-year increase of 24 per cent. Concord identifies the biggest spenders in this industry sector as Royal Mail, One-2-One, British Gas, Cellnet and Yellow Pages.

In percentage terms, however, a number of other client sectors increased their spend on posters even more. Mail order, for example, while still one of the smallest spending market sectors, more than tripled its spend to 800,000. Household appliance companies increased their poster budget by nearly 150 per cent to 3.8m, while household stores companies nearly doubled theirs to 11.6m.

The client sector that saw the greatest cut in expenditure on posters was government, social and political organisations, where budgets fell by nearly 50 per cent – perhaps not that great a surprise, given that 1997 was the year of the last general election, while both major political parties turned to in-fighting rather than electioneering in 1998.

The outdoor advertising format that took the biggest share of total spend in 1998 was 48-sheet posters, which accounted for 181m, excluding production costs; 96-sheet posters accounted for 65m and bus media 47m. Ambient, taxis, specials and “other-sized” formats at airports, underground stations and rail stations totalled 112m.

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