We are in the middle of the longest advertising recession for a generation, but the Advertising Association’s (AA) quarterly report on advertising spend is likely to make media owners, advertisers and agencies do a double take.
In the first quarter of 2003, every media sector except outdoor and direct mail saw a sharp fall in expenditure. So far, so unsurprising. Advertising spend on outdoor, however, is not static, nor has it climbed by just one or two per cent: it has grown by a whopping 16.8 per cent, year on year. The news will be a relief to the outdoor sector – for the same period in 2002, outdoor spend was down by nearly ten per cent.
The fact that the recent Iraq war, which caused advertisers to pull campaigns from news-led TV and switch their spend to outdoor, may have much to do with these excellent figures, but there is no doubt that the medium had a good quarter. Maintaining that momentum, however, will be a considerable task.
And the industry recognises this fact. Publication of the AA figures coincides with a move by the Outdoor Advertising Association (OAA) to prove the effectiveness of the medium through a heavily researched industry-backed poster advertising campaign (MW last week).
“These figures aren’t a flash in the pan,” says Maiden Outdoor managing director David Pugh. “This is something we have been working for collectively during the past ten years.”
Like most in the industry, Pugh believes consolidation among media owners – as well as the OAA’s successful representation of the industry – has much to do with outdoor’s growth. “There were once as many as 200 outdoor companies. Now there are just four major players,” he says.
Van Wagner sales director Kevin Shute says that the high quality of poster sites has attracted advertisers, such as Gucci, which would normally only advertise in glossy magazines.
But Pugh says diplomatically that outdoor’s growth has not come at the expense of other media. He adds: “We are not positioning ourselves as better than other media. We position outdoor as complementary.”
JC Decaux marketing director David McEvoy disagrees with this theory, taking a more bullish line: “We are taking money from other media. What I think is very telling is that one of our biggest growth sectors is other media.”
Several recent deals have seen media owners such as ITV block-booking prime, good-quality sites for a year at a time. McEvoy says: “Outdoor is reaching people that TV no longer talks to. If TV wants to lure its audience back, it has to use us.” He also points to newspapers such as The Daily Telegraph and The Sun, which have boosted their outdoor advertising budgets by 100 per cent.
Some large advertisers, such as Nestlé, have openly criticised TV over the cost of reaching target audiences and have instead increased their spend on outdoor. Nestlé ran a three-week Kit Kat campaign across one in ten of the country’s billboards, urging the British public to “take a break” on one Friday afternoon in March.
The telecoms sector has also been a significant player recently. “It certainly helps us when, for instance, BT Cellnet decides to rebrand as O2,” says Shute. “It spent heavily on outdoor.”
Existing mobile companies aren’t the only ones to have invested heavily in outdoor. Hutchison 3G devoted a huge tranche of its media spend to outdoor when it launched its third-generation network, 3, in the UK earlier this year.
Traditional packaged-goods advertisers have also been returning to outdoor, and it is well documented that Lever Fabergé chairman Keith Weed has said that as part of the company’s Path to Growth strategy, which involves throwing overboard non-core interests and concentrating on key global products, outdoor has an important part to play in attracting a mass market.
The fact that the OAA has changed its stance dramatically over the past year may have helped. Operations director Bill Wilson, who was brought in along with new chairman Alan James, formerly of CDP, says: “The role of the OAA was traditionally defensive. It was created to lobby against such things as the abolition of tobacco advertising. Now we have a body whose remit is to promote the medium to advertisers and agencies.”
And promoting the industry is what it is doing. The OAA is planning the sector’s first joint industry advertising campaign for more than ten years, and has handed the brief – codenamed Marvel – to Abbott Mead Vickers.BBDO.
Developed by AMV.BBDO executive creative director Peter Souter, the majority of the campaign, which is expected to break in the autumn, will use 48-sheet poster sites. The idea is to prove the effectiveness of outdoor advertising. Aimed at advertising creatives, planners and the public, the campaign will use sites donated by media owners.
The OAA is not alone in its desire to create a unified front for its sector. The Radio Advertising Bureau has been doing a similar job for radio for the past ten years and the Newspaper Marketing Agency (NMA) was launched in January.
The outdoor industry, for all its wrangles between companies, has managed to put up a united front and increase revenue. Nevertheless, the OAA and its constituent companies must continue to push hard if the industry is to achieve its goal of a ten per cent market share by next year.