Top brands across the globe have turned to out-of-home (OOH) advertising to capture new audiences, stay top-of-mind with their existing customers, and communicate their unique brand story in an effective and authentic way. In the same way, we can look at smaller brands for how they build their OOH strategy through hyperlocal/hyper-focused ads, we can look at global businesses’ outernet approach. This article will discuss who the major players in OOH advertising have been over the years, how the COVID pandemic has shifted the power in the industry, and ultimately, unpack the approaches they utilize to stay relevant in these unprecedented times.
A Look into The Past
The outlook on the OOH industry was looking strong, growth-wise, in the years leading up to the pandemic. In fact, from 2010-2019, the worldwide OOH ad expenditures nearly doubled with the rise of digital billboards caused by the tsunami of new technological innovations in measuring and tracking tools. As the years go on and boundaries are being broken continuously in the industry in terms of innovation, more brands are turning the OOH medium to round out their marketing strategies and make a splash.
The Pandemic’s Effect on OOH Ad Spend
When the COVID pandemic first hit, global ad spend on OOH ended up declining by roughly 40 percent in response to the increased risk-aversion by businesses and consumers alike. Interestingly enough, however, an article created by Marketing Charts found that in the first quarter of 2020, Apple, McDonald’s, GEICO, Amazon, and HBO were the top 5 OOH advertising spenders. What’s interesting about this you may ask? All five of these companies are leaders in their respective industry categories. This was noted in one of our recent articles written back in January of 2021.
Objectively speaking, this trend can be chalked up to two major factors. For one, you could say these companies—given that they are mammoth-sized organizations with bottom lines to show, may not be as risk-averse as some of their counterparts. Not to mention, businesses like Amazon and HBO were, put plainly, winners of the pandemic. With the stay-at-home orders preventing in-store shopping and spiking online streaming, brands like HBO and Amazon were continually challenging their record-breaking numbers. More importantly, however, these top companies spend heavily on their OOH because they also understand what it can bring to the table for them. Whether that is the high level of trust audiences associate with the medium, industry-leading conversion rates, or the high-impact nature of OOH—these top brands are able to appreciate and value outernet advertising offers.
Fast Forward to Now: 2021
The reason this topic deserves an article of its own is, for the most part, because there was a very interesting shift in power due to the pandemic that can be seen in OOH ad spend. While some of these contenders can also be seen to dominate in the previous year, there were a few new ones that are, without doubt, a product of the shifted consumer preferences and the overall transition as a result of the pandemic. So, let’s now fast forward to today— 2021, and discuss who these major players are in the industry.
Coming in at number one, Allstate Insurance dominated OOH ad spend with the biggest budget in the first quarter of 2021. As no stranger to the OOH industry, Allstate has turned to this form of media quite a bit in recent years, making the top 10 lists for a few years running now.
According to recent data by Kantar, Allstate increased their OOH ad spend by a whopping 45% compared to last year’s Q1. They did this for one, pretty significant reason—to combat the urge consumers felt to switch insurance providers as noted by Geopath Insights. This could have been for a variety of reasons, the uncertainty we’ve mentioned endlessly in this article already felt by consumers and businesses alike because of the pandemic, or perhaps even natural customer attrition. Whatever the case may be, Allstate ramped up their OOH spend and now holds the title of top ad spender in Q1 of 2021.
Geico, another American insurance provider, held the number two spot on the top OOH ad spend list early this year. Allstate and Geico have had a long-standing running feud over customers and often look to one another to stay on top of the market and ultimately, keep customers from switching to their competition.
Put simply, it can be assumed that for similar reasons Allstate increased their OOH ad spend this year, Geico did so with similar intent.
This is where things start to get pretty interesting. Netflix, the streaming service provider that is, in many ways, the founding father of the industry entirely, took the bronze medal on this list. While Netflix has been quite the contender in recent years in regard to their out-of-home ad spend, this year they jumped all the way from 13th place in last year’s ranking. This can be attributed to one, intrinsic shift—the rise of streaming.
Streaming has been on the incline for years now, but what makes this jump so dramatic is that the pandemic facilitated this seemingly unanimous transition to streaming overall. With people staying home at record numbers and screen time at levels never seen before, the streaming industry has been an undeniable winner of the pandemic.
HBO, an American television network owned and operated by Warner Bros, recently introduced their streaming service HBO Max last year. With streaming rising in popularity as discussed previously, HBO set out with the intent to make a splash, fast in the industry.
With shows like Game of Thrones, Euphoria, Succession, Sex and the City, and so much more, their library is vast and extensive, with originals and new additions added weekly. Going head-to-head with other major streaming platforms, HBO took to the OOH industry to spread the word and gain new subscribers. Needless to say, with subscription revenue increasing by 39% from 2020 to 2021 amounting to direct-to-consumer subscription revenue of $2.0 billion for Q2, HBO’s OOH spend seems to be paying off and some.
Google has been a tech mogul dominating their respective industry and the OOH ad industry in tandem. With their innovations teams perpetually pushing out the latest and greatest in everything tech, Google decided to dramatically increase their ad budgets early this year in anticipation of all their new releases. With many tech companies struggling to innovate during the pandemic due to stay-at-home orders, Google has set out to continue to support their customers with new features and devices.
2021 is scheduled to be a busy year for Google with new releases stacked—directly causing their increase in OOH ad spend to get the word out. The release of the Android 12, their latest IO for supported mobile devices, the Google Pixel 5a, Wear OS (their own smart watch) updates, and Pixel Buds A (similar to Apple’s Airpods) are just a few of their new products and softwares set to release this year.
Other Honourable Mentions:
· Warner Bros
· Walt Disney
While companies like Allstate Insurance and Geico held the top spots on this list, the media industry dominated overall. Companies like Walt Disney, Warner Bros, HBO, and Netflix who are included in this year’s list, all have either a subscription-based streaming service as one of their offerings or the streaming is at the center of their product offering entirely. Streaming is fast becoming the method of choice for customers looking to tune into their favourite show or watch the latest movies. With this, the future of streaming looks unstoppable. With 74% of US consumers subscribing to a streaming service, according to findings from The Leichtman Research Group, the landscape has become intensely competitive. And naturally, as this competition intensifies, so does their company’s ad spend as we can see in this year’s list.
Comparing this to last year’s top 10 OOH spenders, the amount of media companies has doubled, with only HBO and Amazon (with their Amazon Prime service) making the list. Going forward, it will be interesting to see how the remainder of the year will look for these companies and who will ultimately end up booted off the list.
Overall, it’s always intriguing to take a look at these big OOH spenders and the content they circulate. With deep advertising pockets, comes the brightest minds in the industry creating some of the most innovative OOH campaigns.