Billboard companies caught in the crossfire of last year’s tobacco settlement experienced a once-mighty revenue stream going dry late last month. That happened when the last of the nation’s highways and byways were stripped of cigarette ads and re-outfitted with messages promoting the dangers of smoking.
Curiously, the outdoor advertising community couldn’t be happier. It seems technological advances and renewed interest in the medium among marketers is helping members not only survive but thrive in a nicotine-free world.
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”We’ve been preparing for this for a long time,” said Sheila Hayes, communications director for the Outdoor Advertising Association of America (OAAA).
”A lot of our members had already started replacing the stuff (cigarette ads) a long time ago.”
Billboard companies weary of being associated with the controversial product have been more than happy to replace that source of revenue with others, Hayes said. ”Everyone’s pretty much relieved to have it taken out of their hands.”
John Ryan, general manager of the Rhode Island division of Chancellor Outside Media, said the effect of freeing up “permanent tobacco locations” will have a “relatively short-time effect” on the company, a division of Chancellor Media Corp.
”I don’t think we’ll have any difficulty replacing the revenue we received from tobacco companies,” Ryan said.
With the loss of tobacco advertisements along Routes 95 and 195, “some of the prime inventory is now opening up for the first time in years,” Ryan said. More importantly, “there has truly been a tremendous amount of interest on the part of other advertisers.”
Ryan credited improved technology with much of that interest. In the last five years, plywood and paint have given way to computer-generated images applied to vinyl. Those higher-resolution ads not only look better, he said. They go up faster and last longer than traditional billboard fare.
Nationally, spending on outdoor advertising jumped 9 percent between 1997 and 1998, to $2.3 billion, according to the OAAA.
In Rhode Island, all billboard advertising for tobacco came down by the national deadline of midnight April 22. The edict was part of the November 1998 settlement between tobacco companies and 46 states to pay for health costs associated with smoking.
As part of the deal, prepaid billboard spaces were turned over to the state’s attorneys general. In Rhode Island, nine were under contract through the end of the year. The state now gets to use them for anti-tobacco advertising until Dec. 31.
Chancellor and Radding Company each donated an additional 15 billboards to the state Department of Health for that same period. Project ASSIST, a federally funded anti-smoking project within the DOH, is buying space on 45 additional boards. For all 84 spots, the DOH is using National Cancer Institute money to pay for the anti-smoking messages and artwork.
Ryan expects more Internet providers, automotive, and television and radio, and business-to-business advertisers to come on board in the new millennium, reflecting a national trend.
Tobacco isn’t the industry’s “bread and butter” and hasn’t been for quite some time, Hayes said. In the last ten years, the category fell from 28 percent to 9 percent in terms of total revenue spent. It peaked in 1979 at 39 percent, she said.
In Rhode Island, tobacco advertising has been slightly higher, accounting for about 12 percent of Chancellor’s local revenues last year, according to Ryan.
Last year, the top three national outdoor advertisers were local services and amusements; public transportation and hotels and resorts; and retail, according to the OAAA. Tobacco, which accounted almost entirely for a “miscellaneous merchandise” category, came in fourth, Hayes said. Restaurants will likely assume that spot in tobacco’s absence, she said.
Ryan said the changes bode well for the industry.
”I’ll stand behind any of my advertisers right to promote their message,” Ryan said. “At the same time, I think we could look back in a couple of years and say that was a very important moment in the development of our industry in terms of gaining legitimacy. But only time will tell.”
