A new study released by the Out of Home Advertising Association of America (OAAA) finds that slight reallocations of existing media budgets to Out of Home (OOH) advertising can lead to substantial gains in return on ad spend (ROAS) and key brand metrics.
“These findings reveal the powerful role OOH plays in the current media mix and demonstrate that OOH has been an under-invested media channel,” said Anna Bager, President and CEO of OAAA. “OOH performs well throughout the consumer funnel, and the analysis shows how brands can leverage that power by shifting just a few percentage points of their media allocation to OOH and generate impressive returns on their investment.”
Benchmarketing, a strategic marketing effectiveness consultancy and part of the Omnicom Media Group, employed advanced econometric modeling to assess the impact of incremental OOH budget increases on ROAS and key brand metrics in three sectors: Automotive, CPG Food, and Retail Grocery.
Entitled Media Plan Optimization: Analysis of Incremental Increase to OOH Share, the report finds that, without increasing existing media plan budgets for the Automotive, CPG Food and Retail Grocery categories, marketers can significantly increase their overall ROI on ROAS and key brand metrics such as awareness, consideration, and purchase intent, by increasing budget allocation to OOH by just a few percentage points, and decreasing allocation to media channels that are overspent beyond the point of optimization, typically TV and digital.
The research supports a measured, incremental approach to budget reallocation. By applying small, strategic increases to OOH spending, advertisers can achieve near-optimal media performance without making drastic changes to or increasing their overall budget allocations. Notably, the study found that the initial incremental increase in OOH generated the largest portion of the total media plan optimized revenue and gain in brand metric scores.
The report provides an in-depth analysis of how incremental reallocations to OOH affect campaign performance, including the below key insights.
Modeling Analysis: Budget Shifts to OOH Yield High ROAS Gains
- Automotive: An increase of OOH allocation from 1% to 2% in the Automotive vertical can lead to an overall media plan revenue gain of $52.1 million or 75% of the total optimization improvement.
- Retail Grocery: An increase of OOH allocation from 8% to 14% in the Retail Grocery vertical can lead to an overall media plan revenue gain of $16.04 million or 61% of the total optimization improvement.
- CPG Food: An increase of OOH allocation from 5% to 6% in the CPG Food vertical can lead to an overall media plan revenue gain of $2.42 million or 70% of the total optimization improvement.
As the advertising landscape continues to evolve, OOH is an increasingly critical channel for impacting consumer behavior throughout the funnel by driving increased sales, brand awareness, consideration, and purchase intent. Marketers are encouraged to leverage the insights from this study to optimize their media plans, enabling greater effectiveness and return on investment.
For more information about specific category spend, please contact Cassady Nordeen at cassady@purposenorthamerica.com.
About the Out of Home Advertising Association of America (OAAA)
The Out of Home Advertising Association of America (OAAA) is the national trade association for the entire out of home (OOH) advertising industry. OAAA represents over 850 members, including leading media companies, advertisers, agencies, ad-tech providers, and suppliers. OOH media includes billboards, street furniture, transit, place-based media, and digital formats (DOOH) across every sector of the channel. OAAA is the unifying voice for the industry, the authoritative thought leader, and the passionate advocate for advancing OOH advertising in the United States. The legislative unit of OAAA advocates for the responsible growth of OOH with federal, state, and local governments. OAAA-member media companies donate over $500 million annually in public service advertising. Founded in 1891, OAAA is headquartered in Washington, DC, with offices in New York City. For more information, visit https://oaaa.org.
