How cost-effective is Out of Home media? It’s an important question for marketers as they build their media plans and have to justify their choices. It’s a fair question and one we’ve heard before.

We know how you feel. Advertisers can feel nervous not knowing the intricacies of a media plan. They don’t necessarily have an in-depth understanding of media planning, nor do they need one. They have a business to run, and that’s what they have us for. But this lack of information can lead to fear. How is my budget being spent? Are these the right choices? They want to know how this is going to move the needle.

What they found was that it doesn’t take a lot of information to allay those fears. A few basic facts that show the supporting rationale is sound will help advertisers feel more comfortable- and dare we say, excited?-about including OOH.

So, without further ado, here are three key points that demonstrate just how cost-effective Out of Home media is.

How Cost-Effective is Out of Home Media? The CPM Perspective:

Out of Home media consistently delivers some of the lowest CPMs of any major media channel. At just over $5.00 on average, it is the second-lowest CPM after online and mobile display and roughly a quarter that of TV.

To be fair, we have frequently made the point that CPMs are not the only factor when weighing the value and allocation of budget to media channels. That is to say, price doesn’t always equal value. Any well-built media plan should consider a variety of different factors and variables, but CPM is certainly one of those factors.

When we consider the other strengths that Out of Home brings to the party, like size, viewability, reach, memorability, and more, we begin to recognize that the actual value of OOH impressions is much higher than one would expect for its low cost, and see how cost-effective Out of Home media is.

Out of Home is a Cost-Effective Media Plan Budget Booster:

This one is important.

Multiple studies have shown that Out of Home media has a strong influence on improving the effectiveness of other media channels. Out of Home is a cost-effective addition to your media plan and makes all your other media work harder.

Out of Home improves the overall effectiveness of your total media budget, making all those dollars work harder for you. As we’ve seen, with its low CPM, it can do this very efficiently. A recent study by Ebquity allows us to examine what that means in practical terms.

The study showed that including Out of Home boosts the effectiveness of TV by 35%.

A chart that shows how the inclusion of out of home media boosts the effectiveness of TV ads

This sounds great, but how does that translate into a real-world scenario? Let’s take a look at an example.

If you have a $100K budget invested in TV and don’t include OOH, then your budget will deliver $100K worth of effect. Pretty straightforward, right?

A chart that shows the effectiveness of tv media on its own

But what happens when we shift a relatively small portion of that budget, say $10K, to Out of Home media? What happens to the overall effectiveness of our plan?

a chart that shows the effectiveness of a tv ad budget when it is paired with out of home media

The effect is dramatic. Thanks to the addition of OOH media, your $90K investment in TV is now working like a $130K investment. Then consider that the OOH is still working on its own as well, so that $10K investment is still working on its own, and you now have a media budget of $100K that is delivering the overall effect of a budget of $130K.

This amplification effect isn’t limited to TV, of course. Out-of-home can make all your media channels work harder.

  • Out of Home media improve the effectiveness of Search by 40%
  • Out of Home media improve the effectiveness of online media by 17%
  • Out of Home media improve the effectiveness of Radio by 14%
  • Out of Home media improve the effectiveness of Print by 17%

Out of Home is cost-effective as a budget booster for your media plan—a low-cost supplement that makes all your other media more effective—like steroids but without all the side effects.

Out of Home Media Delivers Some of the Highest Recall Rates:

The value of an impression doesn’t stop at delivery. What is the longer-term effect of that impression? Does the audience remember it? Is it building mental availability for future use when the consumer is in purchase mode?  Once again, Out of Home delivers the goods.

Out of Home consistently provides some of the strongest recall of any core media channels.

a chart that demonstrates the cost-effectiveness of out of home media by showing how it delivers high recall rates

A study by Solomon Partners illustrated the cost-effectiveness of Out of Home media by showing how it excelled at delivering both aided and unaided recall, outperforming other media channels, which often cost much more than OOH.

So, what does that mean for marketers?

From a practical perspective, if 60% of your audience remembers your OOH ad and only 40% remembers your TV ad, how much more value are you deriving from the OOH?  How much more cost-effective is that media channel?

Out-of-home media is often considered a brand awareness medium. While we know that it can do much more than that, it’s essential to consider just how good it is at delivering awareness. Out-of-home is roughly 50% better at delivering brand awareness than TV and approximately 100% better at delivering brand awareness than radio. How do we reconsider the cost-effectiveness of out-of-home media when we consider these stats?

Given the fundamental work by Field and Binet showing the importance of brand-building efforts and their effect on long-term profitability, it’s not only imperative to consider OOH, but one could say it’s irresponsible not to.

The Cost-Effectiveness of Out of Home Media is Clear:

How cost-effective is Out of Home media? When we look at all the ways it brings value, Out of Home media is one of the most cost-effective media in the marketer’s toolkit. It brings a variety of strengths to the table that all combine to make it a powerhouse when it comes to boosting the cost-effectiveness of your media budget.

  • Out of Home media consistently delivers one of the lowest CPMs of all major media channels
  • Out of Home improves the performance of other media channels – like search, TV, and radio by up to 40%
  • Out of Home delivers some of the highest ad recall among all media channels, averaging over 60%

Ultimately, we’re all working to drive business results for our clients and advertisers. Even relatively minor adjustments to your media plan, such as shifting a few percentage points to OOH, can have significant consequences.  

And it’s not like there isn’t room to shift budgets around. Recent studies by Benchmarketing have shown that brands consistently over-spend on some media channels, long past the point of diminishing returns, and underspending on OOH… But we’ll leave that for another post…

If Out of Home can have a substantial effect and do it for a small investment, it should be considered a core media buy planned alongside its flashier cousins. To leave OOH out of your media plan is to leave a powerful tool unused on the workbench when it could drive business, which is a disservice to our clients.

To learn more about the cost-effectiveness of Out of Home, and how including OOH in your media plan can help drive growth (and how we can help you do that easily), contact us to set up a call.