Photo: Charlotte Kesl, Bloomberg
“Surprising as it may seem now, 2020 was supposed to be a great year for billboard ads.
New kinds of marketers, like the burgeoning weed industry, were flocking to outdoor advertising, letting it outshine other media.
Then Covid-19 hit, forcing restaurants and other stores to close. In all, local businesses that account for 60% of out-of-home ad sales began canceling spots. According to researcher Magna Global, the second quarter of 2020 will show a 40% drop in revenue from a year earlier. When financial results come out in two weeks, Clear Channel Outdoor Holdings Inc. and Outfront Media Inc. are expected to post declines of up to 50%, based on company forecasts and Wall Street estimates.
‘We were really experiencing a golden age for out-of-home advertising,’ said Anna Bager, chief executive officer of the Out of Home Advertising Association of America, an industry group.
Unlike other legacy media — newspapers and magazines — out-of-home ads were forecast to grow annually through 2024, buoyed by spiffy digital signs and new customers like weed dispensaries, Magna Global estimated in December. Shares of Lamar Advertising Co., the leader with a market value of more than $6.6 billion, rose 29% last year.
The companies, which declined to comment or didn’t respond to inquiries, have moved to conserve cash and refinance debt. Outfront suspended its dividend, cut its workforce and trimmed investment. Lamar slashed its payout and outlays on lucrative digital billboards by half amid forecasts of a 17% drop in quarterly sales. Outdoor companies are also offering clients discounts and easier payment schedules.
‘Digital billboards make up 5% of all the billboards at most of these companies, but they bring in almost 20% to 25% of revenue,’ said Geetha Ranganathan, a Bloomberg Intelligence analyst. ‘It’s a huge growth driver.’
During the pandemic, many advertisers have dropped billboards for online media. With so many people at home and working online, some marketers see the internet as a better buy…”
— Renata S Geraldo, Bloomberg