The very first step of any Out-of-Home (OOH) campaign is buying the medium you wish to advertise through. And more likely than not, you will be using a billboard to advertise your product or campaign. So, to do that, you must first buy the billboard and see how that cost fits into the budget you have to produce the advertisement.
In this article, I will be going through the information required to understand how much to costs to buy a billboard and the overarching process involved in purchasing one.
The Price of a Billboard
Billboard costs are represented as cost-per-mile (CPM), or cost-per-thousand impressions. This criterion is the main one used when identifying the success of your ad. And it is based off the difference of how much it costs to produce the ad and how much you made off the ad.
There are many factors involved with purchasing a billboard. Including, but not limited to, the format, circulation, demographics, and impressions. For example, if you would like to buy a physical billboard in a rural area, it would cost you roughly $250. However, if you wanted to purchase one in a mid-size city, it would cost you between $1,500-$4,000, and if you wanted to buy one in a large city, it would cost you up to $14,000. As you can see, the location greatly differs the amount you would need to pay. Moreover, a digital billboard can cost up to $15,000, but, this too, depends on the area in which you would like to have your billboard advertised. All of these estimates are on a per-month basis.
Other costs to keep in mind is the price you pay to get the billboard designed and the cost of building a physical billboard. Billboard production usually ranges from $300-$500 for a standard vinyl board. Secondly, designing the billboard, which is a crucial step in attracting new costumers, can range roughly from $150-$1,000, this is usually done through hiring a design firm.
As vinyl is the most common material used for billboards, it is most likely what you will use to place your ad on. It is the most popular for physical billboards as it is weather resistant and cheaper than digital billboards. You should expect to spend 50 cents per square foot. Which, on average, is around $300-$500 for the entire billboard.
Physical Billboards vs Digital Billboards
The advantages of using physical billboards include the following: more options in terms of placement, cheaper, more inventory, no glitches. Physical billboards have been around for a lot longer than digital billboards. So, understandingly, there are more places in which you can place physical billboards as opposed to digital ones. Furthermore, as mentioned earlier, the prices run a lot cheaper than digital billboards, making it the smarter decision for smaller business who do not have the most significant budgets for advertising. Moreover, since physical billboards are ubiquitous, there is a lot more infrastructure in place for physical billboards. Finally, Since physical billboards rely on static ads, there is no risk of any glitches occurring while the ad is being advertised.
Now, digital billboards, too, have their own advantages. Digital billboards can have many different ads being screened on the same billboard. And these ad times can be pre-decided, so you can figure out how many seconds or minutes you want your ad to be advertised for. Moreover, you will have no problem promoting your ad at night as the LED screens used today on digital billboards are quite powerful, and potential costumers will have no problem viewing them at any hour of the night. These features make digital billboards more flexible and dynamic when compared to their physical counterparts.
Furthermore, digital billboards are also a lot more eye-catching than physical billboards at a staggering rate of six times. Making it a lot likelier that someone sees a digital billboard as opposed to a physical one. Since you can pick what is shown and at what time, you can target a specific audience that you wish to interact with the ad, meaning an increased chance of getting positive interactions. For example, advertising a restaurant at lunchtime. Another advantage is that you can remotely control the ad, meaning, if you wanted to, you could make live changes to the ads at any point during its advertising cycle. These options will be sure to give you certain advantages when using digital billboards, making its higher price range easier to swallow.
Three Factors that will Affect Your Billboard Costs
There are many variables to keep in mind when trying to execute a successful billboard campaign. Three of the most important includes circulation, impressions and demographics. Circulation: This is interpreted as the total number of volume of traffic that passes by your billboard, you get these numbers from the transportation authorities. An important note to point out is that this data does not specify whether or not the driver interacted with your ad or not. Impressions: This is the likely number of people who actually saw your ad, and had some level of interaction. This number is derived from the circulation and the location of the billboard. Demographics: This is the different categories of people who go past the ad. For example, age, gender, income level, etc. An interesting variable to point out is that it costs more to advertise to those in higher income brackets.
Understanding these three factors will be sure to help you get a more comprehensive grasp on what the numbers relating to circulation, impressions and demographics actually mean and how to accurately interpret them. Having this knowledge will set you up really well when successfully executing a billboard ad campaign.
How Much Profit Do You Want to Make?
The entire reason you are considering a billboard and advertising a brand or campaign is to make money. That is your ultimate goal. Your success solely depends on how much profit you make. So, when setting out to buy and advertise through the use of billboards, you will want to calculate your revenue, cost, and profit. A successful campaign should see you making 20% cap rate of return; this is similar to your return on investment (ROI). So, as long as you are seeing a high return, you will be safe in regarding your billboard campaign as a resounding success.
Consider Your Billboard-Competition
With any business venture, you must always consider your competition. Understanding who your competitors are and their methods will be sure to help you have a better grasp on the market you are in or want to enter. For example, it would be beneficial to know that a billboard in an area with a lot of other billboards tend to be cheaper as opposed to billboards in less populated areas. The average distance between billboards, in many cities, is 1,5o0 feet. This number is usually set by the city to make sure there are not too many billboards right after one another. However, some cities do not have any such rules in place. Thus, in some areas, there are some billboards that are only 500 feet away from each other. Having many billboards right after each other will significantly decrease the cost to purchase a billboard, so it must be taken into consideration. The difference between in price between a highly concentrated billboard area compared to a low concentrated area can vary from $300 to $1,500 a month. Given the significant variance in price, this can greatly impact the amount of money you spend on a campaign and, ultimately, the amount of money you plan on making from the said campaign. Thus, you must always conduct research on your competition to be able to move forward while being in the most financially advantageous position possible.
Points to Remember When Buying a Billboard
There are many factors that go behind purchasing a billboard, things you might not have considered as necessary at first. For example, you must pay attention to the ground lease. This is an important document that you must sign once you have purchased a billboard. Firstly, you should never sign a ground lease that is longer than the amortization of your note on the sign. Meaning, you should not have to pay for a ground lease that you will have for a more extended amount of time than the amount of time your ad will be advertised.
Furthermore, look at the right of termination that is placed on your agreement. A ground lease is only as good as the right of your landlord to terminate your lease. You do not want the landlord to have the ability to terminate your lease at their discretion. So, to make sure this does not happen, make sure you have a permit for the billboard. Once you have your permits in order it will make it illegal for the landlord to terminate the lease before the duration of the lease is over. A billboard without a permit is virtually useless, as just mentioned, an agreement with no permit puts all the power in the landlord’s hands, leaving you with no options. However, if you make sure that you have a permit that is authorized by the state or province, you will be in a safe position.
You must always understand the market you are entering prior to beginning an ad campaign. Buying a billboard is a huge investment and must be dealt with meticulously. You do this by learning about all the other billboards on the highway you want to purchase a billboard on. Doing this will give you the information you need to know, such as how much the other billboards are being rented for, and whether or not that specific market is on the way up or down. You can discern such information through learning if there are any road expansion plans being made for the highway. Finally, the most important thing to consider is the amount of money you will make back after your ad campaign is completed. Regardless of how hard you try, if your preliminary research tells you that you will not make a satisfactory return on investment in a specific location or through the use of a particular billboard, then you must look elsewhere. There is no way to nudge the numbers in your favour; as such, you must be as objective as possible when deciding the placement of your potential ad.
In Conclusion
Given all the information presented, you should be in an advantageous position to start looking for the best billboard for you. Should you do the requisite research, you will have all the information required to make an educated purchase. All in the hopes of having a successful advertising campaign; leaving you with more customers, high brand recognition, and greater profits.
Keywords: Billboard advertising, Costs, Prices, Return-on-investment.
References:
https://fitsmallbusiness.com/how-much-does-billboard-advertising-cost/
https://www.obuniversity.com/articles/how-to-buy-an-outdoor-billboard.php
https://broadsign.com/blog/how-much-does-a-billboard-cost/
https://grasshopper.com/blog/billboards-for-small-businesses-7-reasons-to-think-twice/
https://smallbusiness.chron.com/billboard-owner-32969.html
https://dashtwo.com/blog/how-much-does-billboard-advertising-cost/
https://dashtwo.com/blog/what-you-need-to-know-about-billboard-pricing-in-2019/
