Billboards as a Driver of High ROI Through Budget Reallocation

The Report Summary

A recent study by the Out of Home Advertising Association of America (OAAA) has revealed that strategic, incremental budget reallocations to Out of Home (OOH) advertising can substantially enhance return on ad spend (ROAS) and other critical brand metrics. Conducted by Benchmarketing, an Omnicom Media Group consultancy specializing in marketing effectiveness, the report, titled Media Plan Optimization: Analysis of Incremental Increase to OOH Share, utilized advanced econometric modeling to understand the potential of budget shifts in various industries.

Key Insight: OOH advertising, historically underused, proves to be a significant addition to the marketing mix—even modest budget reallocation to OOH from oversaturated channels like TV and digital advertising results in impressive gains.

OOH Advertising’s Role in ROI and Brand Metrics

Anna Bager, President and CEO of the OAAA, emphasized the study’s core insight: OOH advertising is highly effective throughout the consumer decision-making funnel. When brands shift just a small portion of their budget to OOH, they can significantly improve ROI and brand performance metrics such as awareness, consideration, and purchase intent. This demonstrates that OOH has long been underinvested despite its potential to amplify campaign effectiveness.

Industry-Specific Results: High Returns Without Increasing Overall Budgets

Benchmarketing’s modeling focused on three key sectors—automotive, CPG (Consumer Packaged Goods) Food, and Retail Grocery—to evaluate the impact of incremental OOH budget increases. The findings confirmed that reallocating small amounts to OOH could yield notable returns without raising total media budgets.

1. Automotive Industry:

• Budget Shift: Increasing OOH allocation from 1% to 2%.
• ROI Impact: This shift could result in a revenue gain of $52.1 million, constituting 75% of the total media optimization improvement. This impressive return highlights the potential of slight adjustments to media spending to boost overall campaign profitability.

1. Retail Grocery:

• Budget Shift: Raising OOH allocation from 8% to 14%.
• ROI Impact: This change could lead to a $16.04 million gain, representing 61% of the optimization benefits. Retail grocers can harness OOH to drive consumer behavior, especially for time-sensitive or localized promotions.

1. CPG Food:

• Budget Shift: Increasing the OOH share from 5% to 6%.
• ROI Impact: A revenue gain of $2.42 million was noted, accounting for 70% of the media plan optimization improvement. These marginal adjustments can create substantial sales and brand growth for brands with products in high-consumption categories.

Why OOH Advertising Works

The research showed that initial increases in OOH spending yielded the highest gains. OOH’s strength lies in its ability to capture attention, reinforce brand presence, and engage consumers across various touchpoints. Whether billboards, transit ads, or digital displays, OOH effectively complements other media channels and enhances overall campaign performance.

Strategic Budget Reallocation for Media Optimization

The OAAA report advocates for a systematic, incremental approach to budget reallocation. By directing a small portion of the budget to OOH and pulling from media channels that have surpassed optimization—such as digital and TV—advertisers can achieve balanced, optimal media plans. This shift allows for a maximized return without an overall budget increase, making it a practical strategy for marketers aiming for higher returns with controlled spending.

Future Implications for Advertisers

As the advertising landscape evolves, leveraging data-driven insights from this OAAA report can help advertisers rethink their media allocation strategies. The study encourages brands to view OOH as a supplementary channel and a pivotal component of an optimized media plan. With OOH’s proven ability to enhance brand metrics and drive sales, advertisers should consider these slight budget reallocations to amplify their campaign effectiveness and achieve substantial ROAS improvements.

Conclusion

OOH advertising has shown that even small increases in budget allocation can drive significant ROI and brand growth. The data supports making these calculated reallocations as a smart move to maximize campaign performance without inflating marketing budgets. This strategy empowers advertisers to optimize their media plans by shifting funds from oversaturated channels to OOH, unlocking enhanced campaign results.

Credit to the original article author Cassady Nordeen at [email protected] which can be seen here.

Source: OAAA Report.

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