Industry brief: Signage
Across the United States, three companies, Lamar, Clear Channel, and Viacom dominate outdoor advertising, including billboards, signs on transit and in airports and subways, stadium ads, and many other displays. These companies own over two-thirds of the billboards in the US and around half of all billboards worldwide, according to one estimate. And in some areas, like Florida, they own over 90% of the billboards.
These three companies control over a million signs nationwide. Combined, they have bought out over 500 local signage companies across the country in the last 20 years. And at least two of them are expanding rapidly internationally. In the past decade, the following major US outdoor advertising companies have been snapped up by the big three: Outdoor Systems, Universal Outdoor, Gannett Outdoor, Martin Media, Whiteco Outdoor Advertising, National Advertising Company, Gator Outdoor, Naegele Outdoor, Republic Media, and Donrey Media.
It's not just the number of signs, but their locations. These three companies dominate the most visible locations by locking them up with long-term contracts. So their eye-share is greater than the exact percentage of all signs, many of which are far less visible.
But the real power comes because of their national (and international) reach. If a major company like Sony or Pepsi or General Motors wants to conduct a serious signage campaign, there's nowhere else to turn to. Only the big can serve the big, as we've pointed out before - no company wants to negotiate and supervise and endless series contract with small local signage companies. They will settle on the two or three biggest companies and, with luck, have them compete for their business. But only the biggest campaigns can really negotiate, we suspect; smaller campaigns pay the going rate, especially when the demand for such advertising is growing.
Signage is, of course, only part of a promotional campaign for any new product. That's where Viacom and Clear Channel have an advantage over Lamar. Clear Channel can offer by far the largest radio advertising venue in the US along with a small number of TV stations; Viacom is the second largest radio station owner, along with its enormous TV holdings (starting with CBS). These companies can offer sweet package deals to their best customers.
And radio is the perfect complement to signage. Both media reinforce each other, since they are both experiences mostly in automobiles, as passive an audience as exists in this age of multitasking, channel zappers, and ad resistance. They complement each other as purely auditory and purely visual stimuli. And they are a relatively inexpensive way to test concepts, campaigns, and products in focused regions.
The companies
Viacom Outdoor claims over a million "display faces." Outside the US, it is a major player in Canada, Mexico, the UK, Ireland, Finland, France, Italy, the Netherlands and Spain. The company went from large to gigantic when Infinity Outdoor bought the #4 company in the industry, Outdoor Systems, in 2000, and was forced to divest some holdings in a few markets.
Clear Channel claims over 700,000 million displays worldwide. It is estimated to control as much as 30% of US billboards. The company oversees 400,000 displays in 35 companies, including ones in Asia and Europe. Clear Channel became a giant with the 1995 acquisition of Phoenix-based Eller Media, and has steadily added smaller companies since. Clear Channel also owns a variety of ad agencies and marketing consulting services.
Louisiana-based Lamar Advertising is number three, with around a half million displays, but it is very big in billboards, with over 130,000 of them. Lamar tends to have its signage in smaller markets than the other two companies. In addition to billboards, it manages posters, bus shelters, and other signs. It has state contracts for 21 states to manage "street furniture," mostly benches with advertising. It is a major supplier of so-called "logo signs", the signs on highways that inform drivers of gas stations, restaurants, and lodging. From that it has major contracts with fast food chains, motel chains, and oil companies. It also owns 150 local advertising agencies. Lamar's biggest growth happened in 1999, when it snapped up a half-dozen regional signage companies.
