Three things about Lamar Advertising that Billboard Insider learned from reviewing the July 15, 2021 Lamar Advertising S4 in connection with the pending issue of $550 of 3.625% notes.

Local, local, local.

Lamar is more dependent on local advertising than Clear Channel or OUTFRONT.  The S4 says this: “Local advertising constituted approximately 78% of our net revenues for the three months ended March 31, 2021 which management believes is higher than the industry average.”  Lamar is right.  See table below

% of revenue from local advertising for 3 months ended March 31, 2021

Lamar Advertising – 78%

Clear Channel Outdoor Americas – 64%

OUTFRONT Media – 62%

Lots of Experience.

Lamar has a seasoned experienced team of senior execs.  “We believe that the experience of our regional, territory and local managers has contributed greatly to our success…our regional managers have been with us for an average of 35 years.”  Lamar has higher margins than OUTFRONT or Clear Channel.  Insider suspects that about half the margin difference is due to lower lease costs associated with a more rural portfolio and about have the difference is due to an experienced management team which grew up in the out of home business.  Lamar’s managers did not come from ad agencies or consulting firms.  They know their budgets from the ground up and understand how to minimize expenses.

A logo business Lamar wants to grow.

Lamar controls 23 of the 26 privatized state logo sign contracts in the US as well as right of way signs in 14 states and Ontario.  The logo business generates $80 million in annual revenues.  Lamar would like to expand the logo and highway business. “We plan to renew existing logo sign contracts and pursue additional logo sign contracts…Further more we plan to pursue additional tourist oriented directional sign programs in both the United States and Canada and also other motorist information signing programs…”

Insider’s take:  Lamar has recovered faster from covid than Clear Channel or OUTFRONT because it is less dependent on national advertising.  Experienced out of home managers are the key to Lamar’s high margins.

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