Advertising expenditure is recovering with consumer spending, boosting industry demand.
Los Angeles, CA (PRWEB) October 25, 2013
Over the five years to 2013, revenue for the Billboard and Outdoor Advertising industry is expected to fall at an average annual rate of 1.6% to $9.8 billion. Industry revenue is generated by the sale of advertisements on display faces, including billboards, public transit and street furniture. Demand ultimately stems from trends in consumer spending, making the industry sensitive to fluctuations in disposable income and retail sales. These factors help strengthen corporate profit, which influences demand for all forms of advertising. Therefore, the five-year decline is largely the result of key client industries cutting marketing budgets during the recession. More recently, however, advertising budgets have begun to expand, especially after 2011. As a result, revenue is expected to increase 3.2% in 2013.
The industry faces competition from various advertising media. However, according to IBISWorld Industry Analyst Omar Khedr, “Billboards remain an attractive form of advertising, because of their ability to reach a mass market, a feat that is becoming more difficult to do as consumer markets fragment.” Clients are increasingly requesting the measurement of impression, which estimates how wide an audience a given advertisement will reach. This service is provided through the development of interactive displays. Other developments include digital displays, which will continue to increase revenue by improving visibility, occupancy and making target markets easier to reach.
Lawmakers have attempted to limit the spread of digital displays and new billboard sites by restricting the size, location and content of display advertisements. On the other hand, local governments also facilitate the sale of display sites through the tendering process, in which operators bid for the rights to advertise on transit vehicles and other public structures in return for a portion of advertising revenue or rent. In addition, many states are beginning to privatize their state logo signs services. These signs are placed at highway exits to direct traffic to food, lodging, and other services.
As a result of a rise in advertising expenditure, rate increases and higher occupancy levels of available display, firms are anticipated to see a rise in demand as businesses increase their advertising efforts. “Profitability is also expected to improve as firms increase rates and reap the benefits of high-margin digital displays,” says Khedr. Furthermore, the industry has a medium level of concentration. Concentration has been slowly increasing in the industry as large operators have continued to acquire small competitors.
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IBISWorld industry Report Key Topics
The Billboard & Outdoor Advertising Industry is made up of companies that create and design advertising materials for public display, including printed, painted or electronic displays. Operators may place the displays on billboards or panels as well as on or within transit vehicles, shopping malls, retail stores and other display structures or sites.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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