New York, LA, San Francisco. They're prime time for OOH marketers because they have very large populations and lots of OOH inventory. But you might ask yourself: so what?
You can certainly achieve maximum "splash" putting your out-of-home ads in front of all those millions of people. But while Times Square may be the glamour shot, the folks who hang out there are nearly all tourists who could be anyone from anywhere.
You can't achieve your marketing goals — you know, brand awareness, engagement, sales — if you don't reach the right audience, not just the biggest audience. Besides, you have a budget and those top-tier markets are expensive as well as heavily saturated, which erodes effectiveness and ROI.
Secondary markets are where it's at
Secondary (Tier 2) markets aren't second-best, they're just smaller (in some cases, not that much smaller than NYC, LA or SFO). And tertiary (Tier 3) markets? Smaller yet, but perhaps just as consequential depending on your brand and marketing goals.
Across the country, marketers who already know OOH are spending more on this channel in 2022. Nearly all of them (98%) say their company is excited about Tier 2 and 3 markets because these smaller cities are opening up faster, opening the door to more OOH advertising opportunities. They're right.
Besides, even if those Big 3 markets make perfect sense for your marketing, you still need to reach a lot more people in a lot more places. That might be Seattle or Miami or Boston. Or it might be even smaller cities around the country. Austin or Las Vegas or Charlotte.
Secondary markets offer distinct opportunities for marketers. You can test campaigns at a lower cost, or you can simply take advantage of lower advertising costs to reach your audience.
Testing boosts campaign ROI
Because smaller markets tend to be less expensive, they are budget-friendly locations to try out your OOH ads — creative, messaging, CTAs, inventory types, placement choices — before releasing your campaign at greater cost in larger market(s).
OOH excels when it comes to building brand awareness and augmenting social and multi-media campaigns, so you can test campaigns aimed at a broad or limited audience.
Testing on a smaller scale allows you to invest wisely and confidently in larger markets. But that's just the beginning.
While secondary look-alike cities make ideal test markets, they may actually be home to your most desired targets. So why not keep advertising there? If your test run showed positive results, then this audience has already proven their value to your brand.
Stretch campaign budgets (or simply spend less)
OOH works for all size brands, but unless you're a big national, the biggest cities may be irrelevant as well as high-priced and over-saturated.
OAAA says CPMs average $3.38-$8.65 nationally.
Remember that these numbers represent total potential impressions and they could change noticeably given your specific targeting criteria. And while CPM is a universal metric, your budget is based on dollar outlay. And each billboard in Austin or Seattle will cost far less than one in NYC.
Lower cost is nice for testing, even better for smaller brands with limited budgets who want to run "real" campaigns. The rise of digital and place-based OOH and programmatic buying also makes it easier to reach multiple secondary (or smaller) markets with locally relevant messaging.
Reach your target audience where they are now
Reaching your audience out of home requires knowing who they are. However, these days that starts with knowing where they are when they're at home. That's because migration to Tier 2 and 3 cities is a major phenomenon that started during the pandemic, and it's still going strong.
Different generations are choosing different cities, so it's vital to know what's drawing them and where they're going.
All of these factors can affect OOH pricing in any given market. They can also indicate if a secondary market is a strong look-alike for testing:
- Commuting patterns
- Wide array of OOH media types and available (the audience may be there, but are there sufficient OOH options and numbers to reach them effectively? Are they available or is this market saturated already?)
- Major business sectors
- Tourist attractions (as with Times Square, some of these non-locals may be relevant targets from elsewhere)
- Strong economy that’s start-up friendly
- Lower-than-average cost of living
- Universities or similar academic/research facilities
Nashville and Philly are popular cities for testing, as is Columbus OH, which Business Insider describes as Middle America personified. Middle America makes sense for national brands, so the idea is to find cities that reflect the country as a whole in key ways but where OOH costs are lower.
For niche brands or products, look for cities that reflect your key targeting criteria but are smaller and less expensive than your largest designated target markets.
And here's something else to consider. With all types of travel on the uptick, airport advertising is expected to become a focal point in 2022. That adds even greater value to Tier 2 and 3 cities. Your OOH can catch targets coming and going as well as around town.
It doesn't really matter which cities are considered secondary or tertiary, what's important is reaching your maximum target audience cost-effectively.
So far, marketers are not migrating to secondary markets nearly as fast as their audiences. Inevitably, though, with increased OOH demand in these cities prices will also increase.
So time really is money here. The longer you wait to activate OOH in Tier 2 and 3 markets, the greater the risk your competitors will have gotten there and planted their flag first. Not to mention that advertisers across many industries are also focused on those "new" markets, further affecting availability and cost.
Or, you could lead the way in using OOH to strategically leverage Tier 2 and 3 markets. Isn't that what successful brands do?