Harvard Business Review research flags a big swing back to traditional advertising, even from online pure-players, says JCDecaux CMO Essie Wake. With TV audiences ageing and in decline, while brands drown in digital clutter paying higher prices for declining performance, she thinks Out-of-Home will be the main beneficiary. Here’s why.
The bigger picture
Out-of-Home is primed for growth, and there are many reasons why advertisers should take note. In today’s world, most ad content consumption is a series of personal moments on private screens. Out-of-Home bridges our public and private worlds. Harvard Business Review (HBR) recently explored why marketers are returning to traditional advertising. The authors unpacked seven factors driving this trend, including traditional media’s ability to break through digital clutter, and the decline in third-party cookies.
They reported that consumer-facing brands are leading the shift, with B2C service companies predicting the largest increase in traditional advertising spend (+10.2 per cent), followed by B2C product companies (+4.9 per cent). Somewhat ironically, companies that earn 100 per cent of their sales through the internet are leading this trend – anticipating an 11.7 per cent increase in traditional advertising spend over the next 12 months. We are at a crossroads of definition for ‘performance’ marketing – even digital brands need to make meaningful connections to grow.
Seven key drivers
So, why is traditional advertising on the rise, and will this likely continue? Below is an overview of the seven drivers, as detailed by Harvard Business Review.
1. Brands are drowning in digital clutter
Consumers report frustration and negative brand association with digital advertising clutter. A HubSpot survey found that 57 per cent of participants disliked the ads played before a video and 43 per cent didn’t even watch them. Marketers are looking for a way to cut through the noise.
2. Consumers’ trust in traditional advertising
A recent Marketing Sherpa consumer survey found that the five most trusted channels were traditional media, while the bottom eight were all digital. Out-of-Home and media in public places, garnered the trust of 69 per cent of consumers, while online pop-ups fared the worst at only 25 per cent. Marketers are turning to traditional advertising to build brand credibility and trust with increasingly jaded buyers.
3. Preparing for the decline of third-party cookies
For years, marketers have relied on third-party cookies to track and target consumers. With Google phasing out the third-party cookie and Apple implementing changes to its iOS operating system, this will be a continued headwind for the industry in 2023. The CMO Survey found that 19.8 per cent of marketers in the US agree they will need to refocus on extending their reach and invest more in traditional advertising (outside of online approaches).
4. Tapping into podcasts, a growing medium
Podcasts are a form of digital media. However, unlike banner, display, and other social advertisements that often appear within consumers’ everyday browsing, podcasts use an on-demand approach. According to Ads Wizz, this is a key reason for its advertising success. Interestingly, it’s also a medium likely consumed while commuting Out-of-Home and simultaneously absorbing outdoor advertising messages. This opens up a new, powerful opportunity for omnichannel targeting.
5. Exploiting the digital lift of traditional media
Digital technology can amplify traditional channels in powerful, surprising ways. Who would have thought that the QR code would be resurrected? That’s exactly what happened in 2020. Increasingly, the public screen and other traditional channels are forming the foundation of campaigns that drive online interaction on private screens. The measurable link between the two provides marketers with the opportunity to develop robust marketing analytics regarding ROI and attribution, eroding the advantage of other digital channels.
6. Fine-tuning brand and environmental context
Marketing is an art, as well as a science of contingencies and context. This means that sometimes traditional advertising is a perfect fit for some brands, markets, and messages. For example, TV offers an emotional storytelling platform, while Out-of-Home continues to offer an ideal stage for powerful, hyper-relevant connections. Immediately after the 2022 AFL Grand Final, Ford celebrated Geelong Cats’ victory with messages across digital Out-of-Home assets, to and from Geelong: Relevant, meaningful, and seen at the right time and place.