‘The Economist November 10th 2018 outdoor advertising Sign of the times Innovations from online advertisers are being adapted to billboards EDESTRIANS STROLLING down sth Ave- ‘nue in Manhattan's Hell's Kitchen neighbourhood will be struck by the cast- limestone facade of the Hearst Magazine Building. Commissioned by William Ran- dolph Hearst in 1926, the 40,000-square- foot (3736-square-metre) art deco building isadorned with luted columns andstatues and topped by a 600-foot (a83-metre) glass and steel skyscraper. Another conspicuous feature is a vast digital screen transmitting advertisements from BuzzFeed, EsPN and Vice. This blend of history and modernity is emblematic of the outdooradvertising business itself, which, despite being one of the world’s oldest forms of marketing is ‘embracing digital technologies. ‘Most forms of conventional adverti ing—print, radio and broadcast ‘elev! sion—have been losing ground to online ads for years; only billboards, dating back to the 1800s, and rv ads are holding their ‘own (See chart). Such out-of-home (00H) advertising, as itis known, is expected 10 {grow by 3.4% in 2038, and digital out-of- home (Doon) advertising, which includes the Leo screens found in airports and shopping malls, by 16%, Such ads draw ‘viewers’ attention from phones and cannot beskipped orblocked, unlike ads online. Billboard owners are also making hay. from the location data that are pouring off people's smartphones. Information about their owners’ whereabouts and online browsing gets aggregated and anonymised by carriers and data vendors and sold to media owners, They then use these data to ‘work out when different demographic ‘groups—"business travellers’, say—walk bytheirads. Thatknowledgeis added to in- sights into traffic, weather and other exter- nal data to produce highly relevant ads OOH providers can deliver ads for coffee - ‘The great cutdoors United states, avertsingrevenues* 19952015 snmslovege change 4 4 2 0 2 outdoor Teles fda Mopaones Newspapers Times Square pre-neon when itis cold and fizzy drinks when itis, warm, Billboards can be programmed to show ads for allergy medication when the airis full of pollen Such targeting works particularly well ‘when it is accompanied by “programmat- fc" advertising methods, a term that de- scribes the use of data to automate and im- proveads. In the past yearbillboard owners, such as Clear Channel and jcDecaux have launched programmatic platforms which allow brands and media buyers to select, purchase and place ads in minutes, rather than days or weeks. Industry boosters say outdoor ads will increasingly be bought like online ones, based on audience and ‘views as well a location, ‘That is possible because billboard own- ers claim to be able to measure how well their ads are working, even though no click-through” rates are involved. Data firms can tell advertisers how many people ‘walk past individual advertisements at particular times ofthe day. Advertisers can estimate how many individuals exposed to an ad for a Louis Vuitton handbag then go fon to visit a nearby shop (or website) and buy the product. Such metrics make out- doorads more data-driven, automated and measurable, argues Michael Provenzano, co-founder of Vistar Media, anad-tech firm in New York. ‘As the outdoor-ad industry becomes more data-driven, tech giants are among those tosee more value nit. Netflixrecent Iyacquiteda string of billboards along Hol~ Iywood's Sunset Strip, where it will start advertising its films and 1v shows. Tech firms, among them Apple and Google, are heavy buyers of oo# ads, accounting for 25, ofthe top 100 oo# ad spenders in America ‘The outdoor-ad revolution is not pro- blem-fee. The collection of mobile-phone Business 59 data raises privacy concems, And criti- cisms of the online-ad business for being ‘opaque, and occasionally fraudulent, may also be lobbed.at the oot business as itbe- comes bigger and more complex. The in- dustry is ready to address such concerns, says Jean-Christophe Conti, chief execu- Luve of vioost, a media-buying platform, One of the benefits of following the on= line-ad trilblazers, he notes, is learning fromtheirblunders. Pharmaceuticals Pill bills Biosimilar drugs promise to cut health-care costs in rich countries Ae yy’s Tux prices, stupid.” That simple as- sessment of America’s wildly expen- sive health-care system was made 15 years ago by Uwe Reinhardt, a health economist who diedlastyear. Health costs as apropor- tion of America’s economic output have soared since, from 14.5% in 2003 to over 17% in 2017, with drug-price inflation abig culprit. Less than 2% of Americans are tueated with specialty biotech drugs, but these account for as much as 35% of total drug spending. ‘The good news is that cheaper biotech drugs ate coming. Known as biosimilars, these complex copycat drugs (which are a bit like generics) have been allowed in Eu- rope since 2004 and in America since 2010. At first, owing to policy roadblocks and anti-competitive tactics by incumbents, only a few came to market. But the firms »>