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Jul
16
Will Gas Prices be a Burden or Boon For Digital OOH
Filed Under Advertising, Digital Signage, digital ooh, metrics
Sometimes, there’s just a strange confluence of events that end up culminating in me writing about things.
My business partner, Jeff Atley, had a conversation last week with a gentleman who owns an oil field (why? I know not.). This guy mentioned in passing that gas prices could go up to $4/litre as soon as January and possibly up to $7/litre sometime in ‘09/’10. Now, the US is used to $4+/GALLON right now (which translates to about $1.30 per litre) so, to put that in perspective, that would be over $12/gallon for gas.
So I was going to write about it anyway as it has impacts on consumer patterns and therefore advertising purchase patterns, but then I saw this article on CNN, detailing the meteoric rise in Public Transit and the inability for cities to service the demand. Ridership is up huge. According to the APTA, in the first 3 months of this year…:
[Consumers] took 2.6 billion trips on public transportation during that period, an increase of 85 million more trips compared with the same period last year.
This will mean HUGE increases in transit oriented advertising rates and audience reach (think about the frequencies). Subway, Bus, Taxi and trains will all benefit from increases in traffic patterns causing increases in demand from agencies and brands to be at those spots. From the article:
And the Southeastern Pennsylvania Transportation Authority, which serves Philadelphia and has seen about 20,000 new daily customers since last July, has ordered 400 new hybrid buses and 120 new rail cars.
This will have enormous spill-over to area signage on those transit routes. Instead of a consumer getting in their car and going point to point, parking in a garage and going straight to the office from the parking garage, a consumer must navigate more complicated paths and be subjected to incremental advertising and social situations (or Opportunities to See). Coffee shops, Spas, bars, Convenience Stores, pharmacies, etc along a consumer’s route will all see natural increases in traffic flow, making them all relevant advertising/communication opportunities. This could prove quite beneficial to the DOOH business, especially in the top 50 DMAs.
So, here’s the question. Boom or Bust for traditional “Outdoor”?
Most of the Outdoor companies have made their living off of the billboard business along major traffic routes and freeways. Increased public transport means less people on highways and therefore dwindling audiences and targets for Brands and Agencies to target. The targets will be more affluent, but there may be less of them
To juxtapose, however, it also may mean that people are car-pooling and that each automobile means MULTIPLE consumers per vehicle so you can triple and quadruple count each car. Good luck getting the research fast enough, with enough credibility to prove it in the short term, however.
I’d be interested in your take. Throw your opinion in the comments if you’ve got one
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2 Responses to “Will Gas Prices be a Burden or Boon For Digital OOH”
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Hi this is Kathy with Impact Digital Signs. We are an advertisign supported network operator in Tampa Bay Florida. In cities like Tampa with little to no public transportation I think we will see a more dramatic effect. However, people will still need to go to the local stores to purchase their regular use items. Advertising in those locations close to home and in local communities should still be a safe bet for network operators like us.
[…] a follow up to my last post on gas prices affecting OOH performance, Mediapost has an article on exactly this topic. Apparently the OAAA issued a rebuttal to VSS and […]