Out-of-Home Advertising

# Executive Summary * The Out-of-Home (OOH) advertising industry is undergoing a profound digital transformation, with growth primarily driven by the explosion of Digital OOH (DOOH) and the integration of AI and programmatic buying technologies. * This digital shift is turning OOH into a performance-driven marketing channel, allowing it to capture a greater share of ad budgets from other digital media, though overall ad spend is expected to slow in 2025 due to macroeconomic pressures. * An evolving regulatory landscape, particularly new state-level data privacy laws taking effect in 2025, presents both a compliance challenge and a competitive opportunity for OOH's privacy-friendly, one-to-many communication model. * Financial performance is bifurcating between technology-focused players showing strong growth in digital segments and those in challenged verticals like cinema advertising. * Competitive differentiation is now rooted in technology and data analytics platforms, with companies like Clear Channel Outdoor and Perion Network leveraging proprietary technology to offer enhanced targeting and measurement. * Capital allocation is focused on technology investment, strategic mergers and acquisitions, and, for mature players, significant shareholder returns through buybacks and dividends. ## Key Trends & Outlook The OOH industry's growth trajectory is being fundamentally reshaped by its rapid digital transformation, led by the expansion of Digital Out-of-Home (DOOH) and programmatic advertising. DOOH is growing at 15.2% annually, with digital displays generating four to six times more revenue than static counterparts. This technological shift allows for dynamic, data-driven campaigns, transforming OOH into a measurable performance channel that can compete for budgets previously allocated to online advertising. Industry leaders are capitalizing on this trend; Lamar Advertising (LAMR) saw programmatic revenue grow nearly 30% year-over-year in Q1 2025, while Perion Network's (PERI) DOOH segment grew 35% year-over-year in Q2 2025. The integration of AI and advanced data platforms, such as Clear Channel Outdoor's (CCO) RADAR, is further enhancing targeting capabilities and proving return on investment, solidifying this shift. The industry faces a complex regulatory environment in 2025, with eight new U.S. state privacy laws set to increase compliance burdens for data-driven campaigns. However, this also creates a strategic advantage for OOH, which is perceived as less invasive than personalized online ads. This is exemplified by Washington State's new advertising tax, effective October 1, 2025, which explicitly exempts out-of-home advertising, providing a direct competitive edge in that market. The primary opportunity for the OOH industry lies in capturing a larger share of advertising budgets by leveraging new technology to prove its effectiveness as a full-funnel performance channel. However, the most significant near-term risk is a broader macroeconomic slowdown, with global ad and marketing spend growth projected to slow from 8.7% in 2024 to 5.3% in 2025, which could temper the strong growth seen in digital segments. ## Competitive Landscape The U.S. OOH market exceeded $9 billion for the first time in 2024, with Digital Out-of-Home (DOOH) now accounting for 34% of total spending. The competitive landscape within this growing market is defined by a few distinct strategic approaches. One prevalent model involves large-scale network operators integrating technology. These companies leverage a vast, pre-existing physical footprint of billboards and transit displays, which creates high barriers to entry, and overlay it with digital screens, data analytics, and programmatic capabilities to increase asset yield. Their key advantages include a dominant market presence, economies of scale, and resilient local advertising revenue streams. However, they face vulnerabilities such as high capital intensity for digital conversions and maintenance, and a potentially slower pace of innovation compared to pure-play technology firms. Lamar Advertising (LAMR) exemplifies this model, with plans to convert 350-400 static billboards to digital in 2025 and a track record of 16 consecutive quarters of local revenue growth. In contrast, technology-first, asset-light enablers provide the underlying AI-driven software, supply-side platforms, and demand-side platforms that power the programmatic DOOH ecosystem, focusing on technology rather than owning physical assets. This model offers key advantages such as high scalability, a capital-light business structure with the potential for high margins, and the ability to innovate and adapt quickly. Their primary vulnerability is intense competition from other ad technology firms and a dependency on adoption by the large network operators. Perion Network (PERI) is a prime example, with its acquisition of the DOOH ad tech platform Hivestack and the integration of its technologies into the unified, AI-powered Perion One platform. A third model comprises niche vertical specialists undergoing transformation. These companies traditionally dominate a specific OOH vertical, such as cinema advertising, by leveraging exclusive access to a captive and well-defined audience. This model is currently under pressure and is rapidly adopting data and programmatic tools to defend its niche and expand its value proposition. While they benefit from exclusive inventory and deep expertise in a specific audience segment, they are highly susceptible to downturns or structural shifts affecting their specific vertical, such as declining movie attendance. National CineMedia (NCMI) illustrates this, with its NCMx data platform now supporting nearly half of its sales revenue and its partnership with Vistar Media to expand programmatic access, despite U.S. theater attendance declining 11% year-over-year in Q3 2025. Ultimately, the key competitive battleground has shifted from physical location to the sophistication of the underlying technology, data, and measurement capabilities. ## Financial Performance Revenue growth is clearly bifurcating across the industry, ranging from strong double-digit growth in key digital segments to mid-single-digit declines for companies facing specific headwinds. This divergence is driven by the ongoing digital transformation, with companies successfully monetizing digital assets and programmatic channels outperforming. Perion Network (PERI), for instance, reported an 8.3% year-over-year increase in Advertising Solutions revenue and a 35% year-over-year surge in DOOH revenue in Q2 2025, exemplifying the tech-driven growth story. In contrast, National CineMedia (NCMI) saw its consolidated revenue fall 5.3% in Q2 2025 due to its exposure to the challenged cinema vertical, though its new programmatic offerings are a key strategic focus. {{chart_0}} Profitability metrics are diverging based on strategic focus and operating leverage. Margin strength is increasingly tied to proprietary technology and a focused business model. Companies that have shed non-core assets and invested in high-margin digital and data platforms are seeing improved profitability. Clear Channel Outdoor (CCO) is a prime example, with its Adjusted Funds From Operations (AFFO) growing an impressive 75.9% year-over-year in Q2 2025, demonstrating the positive margin impact of divesting international assets to focus on the high-value U.S. market and leveraging its RADAR data platform. {{chart_1}} Capital allocation strategies reflect each company's strategic position, with a clear split between aggressive deleveraging, strategic technology investment, and shareholder returns. Clear Channel Outdoor (CCO) exemplifies aggressive deleveraging, having reduced debt by approximately $605 million in the first half of 2025 through strategic divestitures and refinancings. In contrast, Lamar Advertising (LAMR) demonstrates a balanced approach, executing $150 million in share buybacks year-to-date 2025 while earmarking over $150 million for tuck-in acquisitions in 2025. {{chart_2}} The industry's financial health is mixed but improving for key players, reflecting active balance sheet management and strategic actions. National CineMedia (NCMI) provides a dramatic proof point, having emerged from Chapter 11 bankruptcy with a zero-debt balance sheet as of Q2 2025, providing a solid foundation to invest in its technological transformation.