Why outdoor’s going digital

July 18, 2008 by Dave Haynes

Trade publication MediaWeek rang up some of the big fellas in the outdoor business to chronicle where they’re at right now in digital deployments, and determined just a teeny fraction of the potential stock has gone from plywood and paper to LED walls.

By year’s end, the big three outdoor companies in the U.S. will have nearly 1,600 digital boards sprinkled around the country. That’s a mere fraction of the 275,000 billboards Lamar Advertising Co., Clear Channel Outdoor and CBS Outdoor currently have in the market today.

The article suggest that pace is slow and could slow further if the economy continues to putz along. It kinda ignores that these big boards cost at least $500,000 (and typically a lot more when the superstructure and labor are factored in) to put up. So if I am doing my math right, that industry has already written POs fort about $800 million in LED boards.

The big three billboard companies say they will be putting up more because the numbers work.

“Out of all the out-of-home products we sell, clearly the fastest growing [revenue stream] is digital billboards,” says Paul Meyer, president and COO of Clear Channel Outdoor.

Tommy Teepell, chief marketing officer at Lamar, notes that the digital billboards currently represent only about half a percentage point of all the company’s billboards—800 out of 150,000 boards. But they’re making about $84 million in revenue a year, or about 7 percent of all of the company’s $1.2 billion billboard revenue. “In the famous words of Sean Reilly, our president, ‘I can do that math all day long,’” says Teepell.

Typically, digital billboards deliver about six to eight commercial messages in a loop that lasts about a minute, raising the inventory of a given board by hundreds of percentage points. And according to Jodi Senese, executive vp of marketing for CBS Outdoor, if the board is in a prime location, the ad rates can be as much as three times that of a static billboard.

The article also gives some interesting insight on the raised value of digital versus static ads.

Bob Martin, the founding partner of Bob Martin Media Consulting, who specializes in out-of-home media, puts the average cost-per-thousand rate for the 18-plus demographic at $2 for a static billboard, and $4 for digital. But while that is a doubling, “it’s nothing compared to the CPMs for cable TV, magazine or radio,” he says.

  1. Fabio Aversa says:

    Dear Dave,
    very interesting article, I also read the publication on MediaWeek.

    I find they were still missing some of the advantages of digital billboards, which I believe are the following:

    Eye Catching: moving messages have been proven to catch the human eye’s attention up to 8 times more that a static advertising billboard.

    Visibility: the increasing brightness of LEDs, allow digital billboards to stand out of the crowd both during the day and at night.

    Sharpness: increasing resolution (and cost lowering) is transforming outdoor LED screens in huge “high-resolution” monitors

    Entertainment: their video capabilities allow digital billboard to broadcast news, weather-forecast, live videos etc.

    Targeting: the possibility to feature multiple advertising messages allow advertising companies to run multiple test-campaigns on the same screen, targeting specific hours and changing the campaigns with a few mouse clicks

    Cost Effective: digital billboards completely eliminate the need to produce large vinyl printed ads and get a crew to put it on

    Remote Control: you can change the ads with just a mouse click allow advertisers to launch ad campaigns very quickly and until the very last minute.

    Kind Regards,
    Fabio Aversa

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