When will $4 gas start hitting the billboard business? Right about now, investment bank Veronis Suhler Stevenson and PQ Media said in a report last week and summarized by MediaPost. The logical argument: If people are driving less, they’re seeing fewer billboard, and advertisers will start demanding lower rates.
Not at all logical, claims the Outdoor Advertising Association of America, which makes it its business to bend logic to fit the times. Americans are still going on vacation and they still have to go to work and they see the same billboards whether they’re in a carpool or on a bus. This is a shift from the industry’s usual argument: People are spending a ton of time in their cars, which is great for us!
We’ll leave the relative merits of this dispute to the professionals, but worth noting that the billboard business has been pretty strong so far the midst of an overall ad slowdown. CBS (CBS), the media congolomerate with the most skin in the outdoor media game, hopes that won’t change. Their billboard unit was the only unit to show much revenue growth in Q2, up 8%, while TV was basically flat (up 2%) and publishing and radio were both down.
Clear Channel Outdoor (CCO) didn’t do so well in Q2 with revenue up a mere 3% excluding the impact of currency fluctuations; operating income down 1%.
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