At Advertising Week, amid conversations about agents, creators, and combating fragmentation, an unusual topic kept coming up: out of home.

The relatively fusty advertising channel has, in recent years, taken on renewed relevance. Out-of-home advertising, an industry catchall for media including billboards, wheatpastes, leaflets, and other in-person formats, has benefited from a surprising confluence of tailwinds.

Its digital counterpart, somewhat unimaginatively called digital out-of-home media (DOOH), is increasingly seen as offering the best of both its digital and analog components: unskippable, yet targeted and programmable.

The numbers reflect this renewed interest. U.S. out-of-home advertising revenue grew 10.7% year over year in the second quarter, reaching a record $3.16 billion, according to the Out of Home Advertising Association of America. Digital-out-of-home grew even faster, rising 18.5% and accounting for nearly 40% of the category’s revenue.

Taken more broadly, the resurgence of out-of-home reflects a potentially more consequential shift in advertising: As the internet becomes less trustworthy, less trafficked, and increasingly mediated by artificial intelligence, physical space is becoming more valuable.

Dedicated readers of On Background will recognize part of this dynamic. For media companies, in-person events have been one of the few consistent bright spots in an otherwise challenged advertising environment. Publishers from Condé Nast to Semafor to ADWEEK itself have invested significantly in their events businesses, which in some cases now make up more than half of their revenue.

There are several explanations for that growth. The rise of remote work has created a more distributed workforce with fewer consistent opportunities for networking and convening. Events solve that problem neatly.

More broadly, in-person media offers something increasingly scarce: a tangible, memorable experience, rather than the ephemeral one of scrolling past a display ad or skipping through an ad read.

Now, a host of new factors are making that distinction even more meaningful.

The rise of artificial intelligence has unleashed an onslaught of low-quality content—often referred to as slop—whose provenance will only become harder to discern as the technology improves. Consumers are already growing more skeptical of what they encounter online. According to a 2024 Adobe report, 87% of U.S. consumers said the rise of generative AI has made it harder to distinguish fact from fiction online.

That erosion of trust was one of the reasons Mariano Jeger, the former executive creative director at Droga5, cited for his departure to Outfront Media when I spoke to him this past  September. As digital and social content become easier to manufacture and harder to authenticate, brands have new reasons to reconsider the relative value of appearing in those environments.

But AI is changing more than just what consumers encounter online. It is also changing whether they need to visit the open web at all.

Answer engines such as ChatGPT, Claude, and Gemini increasingly answer questions without requiring users to visit the websites from which that information originated. For publishers, that threatens to reduce referral traffic, shrinking the audiences—and ultimately the advertising inventory—that the open web can offer.

Agents could accelerate that shift. Products like Muse and Dots promise to accomplish tasks on behalf of consumers, potentially bypassing not just websites themselves but the advertising that subsidizes them.

Last week, for instance, Amazon blocked Muse from crawling its website. Whatever the specific motivations behind the dispute, it highlights an existential problem for advertising-supported destinations: An agent can extract the utility of a website without ever seeing the ads that help pay for it.

Taken together, these forces—the declining trust in online content, the growing ability to bypass websites, and the rise of intermediaries that don’t consume advertising—could make parts of the digital ecosystem less valuable to marketers.

At the same time, out-of-home advertising has become considerably more sophisticated.

New, eye-catching creative can appear on digital screens programmatically, giving marketers some of the targeting and flexibility they have come to expect online while retaining a defining advantage of physical advertising: You cannot scroll past a DOOH display.

And as more companies have embraced the logic of becoming media businesses, the opportunity has expanded further. Ride shares, airlines, grocery stores, retailers, and other businesses with physical footprints and captive audiences can increasingly turn those environments into advertising inventory.

In a sense, the logic of retail media is escaping retail. Any company that controls a physical space where people spend time has the ingredients to become a media owner.

But the same forces making physical space more valuable to advertisers risk making that space less pleasant for everyone else.

In New York, the phenomenon can already feel like a scourge, as public spaces increasingly give way to kiosks and screens featuring a constant stream of advertising. In a recent episode of his podcast, New York Times journalist Ezra Klein bemoaned the situation.

“A column I have wanted to write—and have not written, in part because I’ve been afraid of the reaction to it—is that as a newcomer to New York City (I moved here three years ago) I find the presence of the advertising on the New York City subway and on the buses really sad,” Klein said.

The natural counterargument is that those advertisements help subsidize public transit, keeping it more accessible for riders. But the M.T.A. receives only about 1% of its operating revenue from advertising, according to Klein. He raises an intriguing question: Would transit users swallow a modest price increase in exchange for an ad-free subway system?

The question points to a tension that will only grow more important if the out-of-home boom continues.

In nearly every advertising channel, marketers must balance reach against frequency. Show someone an ad too many times and its effectiveness declines; eventually, familiarity becomes annoyance. Online, advertisers can use frequency caps to limit that exposure. And consumers retain an even simpler option: They can set down their phones, turn off the television, or put away the magazine.

Out of home is different.

As more of the physical world becomes advertising inventory, consumers have fewer ways to opt out. A person can close a browser tab or delete an app. They cannot close a subway platform.

For two decades, advertising followed consumers from the physical world onto the internet. Artificial intelligence may now be helping push some of that value back in the other direction.

The question is how much of the physical world consumers are willing to give it.