The unintended consequence of Americans driving less because of the virus pandemic has resulted in a collapse in billboard advertisement revenue, reported Bloomberg.
Researcher Magna Global said 2Q20 billboard ad revenue is projected to plunge 40% from a year earlier.
Wall Street estimates Clear Channel Outdoor Holdings Inc. and Outfront Media Inc., some of the largest outdoor advertising companies, could post upwards of 50% revenue declines for 2Q.
Current revenue growth estimates for the industry show depression in 2020 and revival in 2021. However, 2021 estimates are too optimistic.
During lockdowns, with tens of millions of Americans confined to their couches, advertisers abandoned billboards for online advertisements. This pressured advertising companies, likely resulting in an environment where outdoor advertising remains depressed through the back half the year.
Consultancy firm KPMG International noted, the other week, "social-distancing measures" have "dramatically cut the amount of miles Americans travel by car."
KPMG estimates a 10% permanent reduction of the almost 3 trillion miles driven each year, and vehicle ownership is expected to slump in the years ahead.
The report states, the new normal could be as many as "14 million fewer cars" on US highways. Fewer cars on roads are bad news for outdoor advertising companies.
Shown below, Atlanta's rush-hour congestion was eliminated during lockdowns.
TomTom Traffic data shows Atlanta's rush-hour congestion has disappeared through July.
Rush-hour is also non-existent in New York City.
The overall conclusion is that advertisers will shift away from outdoor advertising spending for online options as millions of Americans stay home for various reasons, if that is because of permanent job loss or remote work, this is all terrible news for companies that own billboards.