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Now before we get too far along, a disclaimer. ABI Digital Solutions is a printer, and a nice chunk of business for us comes from the production of billboards you see every day. That said, most of that work comes from working directly with billboard companies. We also do a ton of work that is not related to outdoor advertising at all. Our interest in promoting outdoor advertising is because IT WORKS, not because we want you to pick up the phone and buy a billboard from us.
One of the best reasons outdoor works so well is that it is REALLY cost effective. The advertising world measures the success of an ad campaigns in terms of CPM: Cost per thousand. In other words, how much money does it cost you to reach a thousand people with your message. Here’s a few statistics on various forms of advertising:
Broadcast TV $10.25 CPM
Cable TV $5.90 CPM
Magazine Ads $6.98 CPM
Radio $4.54 CPM
So what’s the average cost per thousand for outdoor advertising? $2.26 per thousand people reached.
That’s right, outdoor advertising is literally half the cost of its closest competitor, and practically five times as effective as broadcast television. In a difficult business environment like the last several years have been, that’s some pretty important information to have.
Why is it so effective at reaching people? More than any time in history, people are increasingly on the road. A National Car Study states that 70% of people say they are in more traffic than previous years. People spend literally 14% of their waking life in their car! That’s because on average people are in their car more than two hours a day! That’s also a great reason to use Radio, since it is the second most cost effective form of advertising . . .
Basically, outdoor advertising has a captive audience. You are in your car, and there is only so long you can stare at the tailgate in front of you. People look around at the environment they are in, and outdoor advertising is part of that environment.
It’s especially effective for retailers. An Arbitron study concluded that nearly 50% of people make decisions to stop at a store or restaurant while they are on their way home from work (OK, technically 40% said that. 7% said “I don’t know” to the question. They also responded “I don’t know” to the question “Do you know your own name”?).
That means that nearly half of people who stop somewhere on the way home from work make that decision on the fly! Do you think 1,000 square feet of Big Mac in their face might influence their decision a little bit? You bet it would.
Let’s take a look at an example. A 2001 market test was done in Detroit and Minneapolis. Both markets ran print and broadcast advertisements, but Detroit supplemented these ads with billboards and truckside advertising.
Detroit was the clear winner (how often does THAT ever happen?) The study concluded that there was a 30% increase in brand awareness in the Detroit market that had been supplemented with outdoor advertising. That number was 50% within the target demographic! Also, allaying fears that people don’t “like” outdoor advertising, there was 100% positive perception of the brand in Detroit.
Be sure to take a look at our K. Hovnanian Homes at our Case Studies section for more insight into more empirical evidence of outdoor being successful.
Next week: The cons. Outdoor is great, and it’s cost effective . . . but it’s not for everyone. If it’s not right for your company, don’t waste your money!