USE AND EFFECTIVENESS OF BILLBOARDS Perspectives from Selective-Perception Theory and Retail-Gravity Models

A survey reveals four primary reasons why businesses use billboard advertising: visibility, media efficiency, local presence, and tangible response. Insights on the relative importance of these factors are provided by retail-gravity models and selective-perception theory, along with recency planning in media strategy. The study also identifies eight executional factors that are associated with successful billboard advertising: name identification, location of the billboard, readability, clarity of the message, use as a tool of integrated marketing communications (IMC), powerful visuals, clever creative, and information provision. Moderating effects of company size, company type, and level of billboard usage are examined. The results go beyond existing textbook and trade-press discussions to document the factors that make billboards an important promotional tool. Recent years have seen growth in outdoor advertising revenues. According to the Outdoor Advertising Association of America, annual revenues were $2.8 billion in 1993; over the following 10 years, expenditures almost doubled, increasing to $5.5 billion in 2003. This rise has occurred in spite of the loss of cigarette advertising on billboards due to the Master Settlement Agreement of 1998 and a decline in the relative proportion of billboards for alcoholic beverages (OAAA 2004). In recent years, a broader range of product categories has been advertised on billboards, led by a variety of retail and service businesses. Zenith Optimedia classifies outdoor advertising as a “major medium,” along with television, radio, newspapers, magazines, the Internet, and cinema. Zenith Optimedia projects continued growth in outdoor advertising expenditures, and ranks outdoor as the fifth largest advertising medium worldwide, behind only television, newspapers, magazines, and radio (Zenith Optimedia 2005). Despite revenue growth, however, outdoor advertising remains “one of the least researched of any mass medium” (Katz 2003, p. 92). Even among the limited number of studies that have been conducted, few have focused on what factors drive its effectiveness (Donthu, Cherian, and Bhargava 1993). Charles R. Taylor (Ph.D., Michigan State University) is the John A. Murphy Professor of Marketing, College of Commerce and Finance, Villanova University. George R. Franke (Ph.D., University of North Carolina at Chapel Hill) is a Professor and Reese Phifer Fellow of Marketing, Culverhouse College of Commerce and Business Administration, University