Outdoor offers strong ROI

24 September 2009

LONDON: Outdoor advertising offers a highly competitive return on investment for UK brands when compared with other traditional media channels, a study by BrandScience has revealed.

According to the Outdoor Advertising Association, OOH adspend fell by 24.5% in the second quarter of this year, to £180 million ($295m; €200m), including an 8.7% drop for digital signage.

The new study, commissioned by the same organisation, was based on an analysis of 400 case studies, and assessed the ROI recorded by each type of media used.

It stated that for every £1 retailers spent on out-of-home advertising, their sales rose by £3.57, the same result as for television.

By contrast, £1 spent on print ads delivered a payback of £6.23, and the report added that, when taking production costs into account, outdoor posted better figures than TV, and drew closer to print.

Similarly, the ROI for print campaigns grew by 34% when outdoor ads featured as part of the same media plan, while the effectiveness of direct marketing improved by 61%, to £1.55, when supported by OOH.

TV ads were also found to display a heightened impact when run alongside outdoor executions, BrandScience said.

Looking specifically at the FMCG sector, the research firm argued that TV is 5% more "efficient" than outdoor for brands in this category.

However, when this calculation factors in the expense of developing and making TV spots, out-of-home actually out-performed television, generating £1.20 in sales for every £1 invested.

Earlier this year, BrandScience issued another study which stated this form of media offered a payback either equal to or greater than TV for retailers and financial services brands, albeit still behind print. 

However, billboards and other such street furniture were the best-performing channel for telecoms and travel brands, while TV took the top spot in the leisure sector.

Peter Charlton, sales director at CBS Outdoor, said this research offered brand owners "hard, econometric evidence" about the efficacy of the out-of-home medium.

He added that a number of major marketers, including Cadbury, GlaxoSmithKline, Johnson & Johnson and Mars are all currently increasing their levels of activity in this area.

Data sourced from Marketing Magazine; additional content by WARC staff