I had a great time at the IBOUSA conference last week in Pittsburgh. The future is bright for OOH Advertising. We believe that the Industry’s effort to create effective measurements with the help of companies like Cuende OOH and Media Rating Council will be valuable long-term investments. With the goal of stealing revenues from other mediums, everyone within the OOH industry will benefit. Digital OOH remains the medium with the highest projected growths according to Marketing Charts. “In 2021, it will account for $3 billion of total OOH advertising and is expected to grow to $4.9 billion by 2025.” We see digital assets as being very valuable investments.
I’m excited to be attending the IBO conference this week in Pittsburgh. These conferences are always exciting because they are packed full of interesting information for independent operators from across the country. If you plan to attend this conference let me know because I would love to connect! We have a lot of exciting opportunities to discuss so make sure to check out our some of the listings on our website.
One of the methods that the out-of-home advertising industry is using to outperform traditional advertising mediums is their deployment of digital displays. These digital displays have an internet connection and can be controlled remotely to easily switch out ads in real time.
The nation’s largest billboard companies are seeking as many digital conversion opportunities for their static displays as possible. So far this year, Outfront has converted 64 static locations, Lamar has converted 82, and Clear Channel has converted 40. By the end of 2021, Lamar projects to convert about 215 locations (Lamar 2021 Q2 10-Q).
The revenue mix for the OOH industry is leaning strongly towards digital billboards. Let’s take Outfront, for example. In Q2 2021, Outfront was operating 47,000 total billboard advertising displays, 1500 of which were digital. This means that 3% of their inventory was accountable for 20% of total revenues. Outfront estimates digital displays to soon drive 40% of their total revenues (Source: Jeremy Male USB Global TMT Conference, 2019).
At the USB Global TMT conference, Outfront CEO Jeremy Male noted that digital billboards generate four times the revenue of static displays, while costs may only increase two fold. If your billboard tenant approaches you about converting their sign to digital, you should expect a major increase to your lease rate.
There are a number of factors that go into determining whether the billboard on your property qualifies for a digital conversion. These include, but are not limited to, local sign ordinances, competition, advertising demand, and lease terms.
For any landowners who have been approached by their billboard tenant about converting their sign to digital, there are important legal considerations that need to be addressed in the lease. It’s essential for every landowner to understand these legal considerations to ensure they are signing a fair and equitable lease agreement. SignValue offers a free consultation for any property owners seeking more information.
This week we would like to feature one of the listings on our billboards for sale page. We have a billboard plant in central Pennsylvania with coverage between Harrisburg and State College. The plant consists of 8 structures, 7 sites, and 15 digital displays. All of the displays are manufactured by Formetco. Long term leases are available for this plant. If you have any interest in this listing, please contact Carson Frost at firstname.lastname@example.org.
Check out these quarterly report overviews that SignValue has put together for Lamar and Outfront for the second quarter of this year.Lamar Q2 Report Infographic
Outfront 2021 Q2 Report Infographic
Both companies display a positive increase in revenue and negative increase in site lease expense. This is a trend that we also observed with Clear Channel earlier this month. Digital is on the move and displaying substantial growth from both Lamar and Outfront. Lamar executives have highlighted that airport and transit revenues are making a comeback, and that they are expecting 2022 to be the high watermark for margins in the history of the company. Outfront is banking on the growth of entertainment and movies to keep their revenues rising in the back half of the year. For updates every quarter, stay tuned and remember to read our weekly newsletter on Mondays.