How Netflix Bidding for Regency Proves OOH Ads Still Matter

ooh advertising, netflix

Like everything else traditional advertising, the industry’s madmen have predicted the death of OOH advertising for some time now. They say that billboards are slowly dying off – just like radio, T.V., print and other ad mediums that now seem like relics of the 20th century. 

Well, Netflix disagrees with these “OOH-advertising-is-dead” announcements. In fact, in early April, news emerged that Netflix placed a $300 million bid to acquire Regency Outdoor. And if one of the largest streaming services on the planet wants an outdoor company for themselves, that means the medium hasn’t lost its power. 

A Closer Look at the Deal

First and foremost, it’s no surprise Netflix made this move. They’ve plastered plenty of billboards with stunning high-res posters of their top T.V. series and movies. They are sticklers for out-of-home advertising.

But the choice to bid for Regency is about much more than just personal preference. It’s also about the numbers.

Netflix is worth roughly $140 billion, giving it a higher valuation than McDonald’s, GE, Ford and IBM. The company spends a whopping $2 billion on advertising, so spending $300 million for Regency would equate to 15% of their budget. This has sparked shareholder concern, and Netflix would have to buy and use thousands of billboards to see an actual return on investment. Nevertheless, the streaming giant seems to be heading into the boardroom with steel-gazed confidence.

As for the Regency deal, Netflix isn’t the only bidder. However, being the industry titans they are, the company has received the most coverage, and it wouldn’t surprise anyone if they came out on top.

This Is a Big Deal Because…

Most brands are focusing on digital channels such as search, social, mobile and newer technologies such as augmented and virtual reality. These channels are no doubt the future. However, many brands are rushing into the digital arena, ignoring the immediacy and simplicity that traditional OOH ads deliver.

It takes time to see some digital marketing efforts take effect. A viral campaign may never go viral. But a billboard placed in the right spot at the right time with the right message will capture attention and leave an unforgettable imprint in the minds of audiences.

Netflix has capitalised on this and wants to take it to a new level, demonstrating that OOH (and other traditional advertising) still has its place in an increasingly digital world. So all brands and businesses, take note.

Why Netflix’ Reliance on OOH Advertising is a Winning Strategy

Aside from what would look like personal preference, there are some hard numbers to support their decision to acquire Regency as a whole. And those numbers should matter not only to Netflix but you as well, regardless of whether you are a business owner or a media buyer.

The Undeniable Benefits of OOH Advertising

Traffic density & Opportunity – Geopath, an audience location measurement service, says that a billboard placed by a freeway in a city like Los Angeles can get nearly 400,000 impressions a month. That’s a lot of eyeballs. And imagine, that’s just one billboard in one spot.

Cost-Effectiveness – OOH advertising has a reputation for being expensive, but costs far less than T.V. ads. Studies have shown that billboard ads cost 80% less than T.V. ads.

Audience Reach – As many as 71% of consumers look at roadside billboards intently, and as many as 26% of customers have visited a website due to an OOH ad.

Creative Control – With billboards and outdoor advertising, creativity can run wild. It’s not restricted to technical abilities of a server, device or a network. They’re a canvass where a message can run wild providing there are a budget and adequate time to execute an idea.

Long Live the Billboard

The Netflix bid for Regency proves that OOH advertising still holds significant value for businesses today. They offer the best of many worlds, and if used strategically and creatively, they can give your brand a competitive edge over others. So don’t overlook the power of a billboard or truck ad. Your next advertising breakthrough may very well take place outdoors.

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