Outdoor Advertising
Description
Companies in this industry create print and digital advertising material and place it on outdoor displays such as billboards, transit vehicles, and street furniture. Major US outdoor advertising agencies include Clear Channel Outdoor, Intersection Media Holdings, Lamar Advertising, and Outfront Media. Leading companies based outside the US include JCDecaux (France), Ströer (Germany), and Val Morgan (Australia).
Out-of-home advertising spending is expected to reach $40 billion worldwide in 2025, according to Statista. The leading global markets in terms of advertising spending include the US and Canada, with the Asia-Pacific region and Western Europe as one of the leading markets.
The US outdoor advertising industry includes more than 2,600 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $8 billion. Advertising and marketing services, ad agencies, and sign manufacturing are covered in separate industry profiles.
COMPETITIVE LANDSCAPE
Demand for outdoor advertising is driven by spending on transit infrastructure, as well as business in sectors such as retail, media, health care, and banking and financial services. The profitability of individual companies depends on the ability to attract and retain creative employees and establish and maintain successful relationships with clients. Big companies have advantages in providing outdoor advertising in multiple geographic markets. Small companies can compete effectively by specializing in local markets or offering lower pricing. The US industry is concentrated: the top 50 companies account for nearly 80% of revenue.
The outdoor advertising industry competes with other forms of print and digital media, including television, radio, newspapers, magazines, and desktop and mobile Internet, for advertising dollars.
PRODUCTS, OPERATIONS & TECHNOLOGY
Spending on outdoor advertising, also known as out-of-home (OOH) or digital-out-of-home (DOOH) advertising, typically goes to large format displays (about 90%). Other revenue sources include transit and street furniture (about 5% each).
Production work includes creating the advertising copy design and layout, coordinating its printing or digital creation, and installing the copy on displays. Large companies typically own the physical structures on which their clients' advertising is displayed. Most advertising structures on which displays are mounted require permits. The design of street furniture structures (bus shelters, bicycle racks, and kiosks) may be done in conjunction with a third-party design or architectural firm.
Billboards are usually located on routes and intersections that are highly visible and heavily trafficked. Advertising copy displayed on traditional billboards is typically computer printed on vinyl and transported to the bulletin, where it is secured to the display surface. Digital displays are becoming more popular, especially in established markets. Billboards vary in size, with the most common size being 14 feet high by 48 feet wide. Clients may contract for individual billboards or a network of bulletins, with terms generally ranging from four weeks to one year.
Contracts for the right to place street furniture and transit displays in the public domain and sell ad space on them are awarded by municipal and transit authorities in competitive bidding processes governed by local law. The advertising company typically pays the municipality or transit authority a fee, or payment is derived from a revenue share agreement that may be a fixed amount or percentage of revenue earned from the ad sale.
Generally, contracts with the city or transit authority for street furniture have terms ranging from 10 to 20 years, and for transit displays have terms ranging from five to 10 years. Client contracts for street furniture displays range from four weeks to a year, and are typically for a network of multiple street furniture displays. Client contracts for transit displays generally have terms ranging from four weeks to one year.
Out-of-home advertising spending is expected to reach $40 billion worldwide in 2025, according to Statista. The leading global markets in terms of advertising spending include the US and Canada, with the Asia-Pacific region and Western Europe as one of the leading markets.
The US outdoor advertising industry includes more than 2,600 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $8 billion. Advertising and marketing services, ad agencies, and sign manufacturing are covered in separate industry profiles.
COMPETITIVE LANDSCAPE
Demand for outdoor advertising is driven by spending on transit infrastructure, as well as business in sectors such as retail, media, health care, and banking and financial services. The profitability of individual companies depends on the ability to attract and retain creative employees and establish and maintain successful relationships with clients. Big companies have advantages in providing outdoor advertising in multiple geographic markets. Small companies can compete effectively by specializing in local markets or offering lower pricing. The US industry is concentrated: the top 50 companies account for nearly 80% of revenue.
The outdoor advertising industry competes with other forms of print and digital media, including television, radio, newspapers, magazines, and desktop and mobile Internet, for advertising dollars.
PRODUCTS, OPERATIONS & TECHNOLOGY
Spending on outdoor advertising, also known as out-of-home (OOH) or digital-out-of-home (DOOH) advertising, typically goes to large format displays (about 90%). Other revenue sources include transit and street furniture (about 5% each).
Production work includes creating the advertising copy design and layout, coordinating its printing or digital creation, and installing the copy on displays. Large companies typically own the physical structures on which their clients' advertising is displayed. Most advertising structures on which displays are mounted require permits. The design of street furniture structures (bus shelters, bicycle racks, and kiosks) may be done in conjunction with a third-party design or architectural firm.
Billboards are usually located on routes and intersections that are highly visible and heavily trafficked. Advertising copy displayed on traditional billboards is typically computer printed on vinyl and transported to the bulletin, where it is secured to the display surface. Digital displays are becoming more popular, especially in established markets. Billboards vary in size, with the most common size being 14 feet high by 48 feet wide. Clients may contract for individual billboards or a network of bulletins, with terms generally ranging from four weeks to one year.
Contracts for the right to place street furniture and transit displays in the public domain and sell ad space on them are awarded by municipal and transit authorities in competitive bidding processes governed by local law. The advertising company typically pays the municipality or transit authority a fee, or payment is derived from a revenue share agreement that may be a fixed amount or percentage of revenue earned from the ad sale.
Generally, contracts with the city or transit authority for street furniture have terms ranging from 10 to 20 years, and for transit displays have terms ranging from five to 10 years. Client contracts for street furniture displays range from four weeks to a year, and are typically for a network of multiple street furniture displays. Client contracts for transit displays generally have terms ranging from four weeks to one year.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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