The question of how out-of-home advertising is costed essentially comes down to three elements: gross price, net price and contact cost. To compare (D)OOH with other channels, you need to understand the relationship between these, and how they connect to reach and frequency in different environments.
Gross price – the starting point for the calculation
The gross price is the starting point. It is the list price for a campaign or for a package of ad units over a given period. In classic out-of-home, this can be networks consisting of:
- Bus shelters and weather‑protected units
- Metro/subway advertising
- Billboards
- Stand‑alone premium units
The gross price typically reflects:
- Duration of exposure
- Demand for the locations
- Estimated traffic flows
- Placement and format
In other words, it is the aggregated price tag for the potential exposure in a given environment, over a defined time period.
Net price – where the calculation becomes comparable
The net price is the actual price after discounts, contractual terms and any package deals. Only when we work from net price does it make sense to talk about how (D)OOH is costed in comparison with other media.
At net price level we can:
- Calculate contact cost / CPM
- Compare different networks, cities and formats
- Benchmark out-of-home against other channels in a media plan / media mix
Net price is therefore the key entry point when we talk media economics and budget allocation.
Contact cost – the CPM logic in (D)OOH
Contact cost, or CPM in (D)OOH terms, is calculated by taking the net price and dividing it by the number of modelled contacts, usually per thousand:
Contact cost / CPM = net price ÷ number of contacts × 1,000
These contacts are based on:
- Measurements of traffic flows
- Adjustments via visibility models that account for:
- Location of the unit
- Direction and speed of traffic
- Type of advertising format
This modelling is provided by Outdoor Impact. Outdoor Impact is the Swedish standard for measuring and modelling reach and VAC (Visibility Adjusted Contacts) in out-of-home advertising, making it possible to compare OOH with other media on a consistent basis.
This means that not all passers‑by are counted as equally valuable contacts. A bus shelter unit may have fewer passers‑by in total, but more high‑quality contacts than a unit along a fast motorway where many people pass without registering the message. In this logic, VAC (Visibility Adjusted Contacts) becomes a key metric. VAC represents visibility‑adjusted contacts that take into account how exposure actually works in real life. When we calculate contact cost per VAC, we get a CPM metric that can be meaningfully compared with other channels, despite the environments being fundamentally different.
Creative solutions – when higher contact cost is intentional
Creative (D)OOH solutions (for example, JCDecaux’s Station Domination in metro environments, or bespoke executions on stand‑alone units and bus shelters) deliberately deviate from standard logic. Here, the cost per contact is higher, but the objective is often to:
- Strengthen the brand
- Create experience and attention
- Generate PR and organic reach
- Deliver impact
In these cases, contact cost should not be assessed in isolation, but in the context of the campaign’s strategic role within the overall communication plan.
A practical workflow for (D)OOH costing
A simple, practical workflow for analysing how OOH is costed is:
Step 1 – Secure the net price
Always work from net price, not gross price, when you compare or optimise.
Step 2 – Calculate contact cost
Calculate CPM per contact/VAC for different networks, cities and formats.
Step 3 – Compare across networks, cities and environments
Compare contact cost levels together with:
- Reach and frequency
- Quality of environment (e.g. bus shelters vs motorways, city centre vs peripheral areas)
This enables you to identify which combinations of networks, units and environments deliver the best reach and quality within a given budget – without losing the quality of exposure behind a single price index.
