As unlikely as it may seem, I’m actually a fairly big supporter of billboard advertising. Not because the cost per impression is necessarily much better than say, traditional media outlets (like TV & radio), but partially because billboards capture an audience that is:
- Already out driving, and
- (When used correctly,) already near the business
The later explains the difference between both a radio ad and a billboard sign. Many businesses plan hard to ensure their storefront is in a prime, visible destination spot. That is, if you’re a furniture retailer, best practices tell you that you need to be huddled around ‘furniture row’ where all the big players play. If you’re a clothing outlet store, chances are there’s a great outdoor mall strip with foot traffic that you’d best find a vacant space in.
For niches that typically huddle around a retail hub, having a business location outside the hub means being generally unpatronized. For example: think, “If I need running shoes, I’ll go to the mall. If I spend all day in the mall until I’m exhausted, what are the chances I’m going to drive to a separate, free-standing FootLocker when I’m done?”. Not likely. What this typically means is that drive-by traffic (as opposed to “ad driven” traffic) makes up a large percentage of store patrons.
Unfortunately, due to time constraints and sheer limited amount of patience & energy, customers don’t typically make it into every shop in a retail plaza. The businesses that garner the most traffic in those plazas are the ones with:
- The most recognizable brand names
- The most compelling offers
- The most signage
Here is where billboard advertising comes in.
In many cities, local laws govern the amount of signage a building is allowed to have. Typically, the signage is a given number (in Sq. Ft.) in proportion to the amount of store front parallel to the road it’s being displayed against. This is typically done to reduce the amount of tacky & unnecessarily promotional signs that read along a state road. A large building with 300 ft. of storefront, for example, may only be allowed 50-100 sq. ft. of logo signage between both the roadside sign and the logo on the building. As a side note, this is typically why the larger firms will purchase entire plazas & name the plaza after themselves. Making an impression on passers-by once with your road sign, and then again with a large plaza sign reinforces the retails location and business size.
Billboards, however, are a way to combat these local signage restrictions. The typical 30-sheet billboard is 12′ x 24′, with larger freeway billboards closer to 14′ x 48′. With no limit to the amount of billboards you can purchase up (only to the location) store signage is boundless–and making enough of the right impression with additional ‘signage’ may swing customers to patron your business instead of nearby competitors.
Being smart with the location is key here. The idea is to capture prospects that are already in the market for your good or services.
We’re not trying to create demand, we’re just trying to capture a piece of the pie.
Consider a Verizon store that is right next to an AT&T store. The Verizon store is aware that the AT&T store does a significant amount of local advertising in an attempt to drive business to their location. Their advertising is typically radio, TV, & newspaper and always gives the location of AT&T’s freestanding building within the ad. How successful then would advertising the same way for the Verizon store be?
Let’s say between a TV, newspaper, and radio campaign, we’re average about $.008 an impression with a $10,000/month budget.
Our average instore traffic off the ads (let’s be generous here) is 0.15%/impression.
($10,000/month) / ($.008/impression) = 1,250,000 impressions/month
(1,250,000 impressions/month) * (0.15% thru traffic rate) =
1,875 unique visitors/month
($10,000/month) / (1,875 unique visitor/month) =
$5.33 cost per unique visitor Did I mention how generous that thru-traffic rate was?
Let’s now assume actually AT&T is actually garnering this type of fictitious traffic.
Verizon, in response, hoists a billboard next to AT&T’s locations which reads:
“Shopping for a new cellular plan? Come check out Verizon’s competitive, low rates!”
Considering again how close in location the two retails are (and for the purposes of this example, we are considering them close), how likely then is it that an AT&T patron will shop the Verizon store to compare rates?
80%? 70%? 40% over a long-run? Hard to say exactly. But let’s go conservative and say only 40% of AT&T shop visitors have any interest in checking out Verizon’s comparable pricing and services:
Assume cost of billboard sign per month to be $2,500. Actually, let’s make it “$2,500 per 4 weeks” since that is now the industry standard for selling billboard advertising;
Fictitious traffic to AT&T per month = 1,875
Percentage of cross shoppers to Verizon from AT&T = 40%
Number of cross shoppers to Verizon from AT&T = 750
Cost per unique visitor per month = [($2,500 per 4 weeks) * (Avg. 4.3 weeks per month / 4 weeks per billing cycle)] / (750 unique visitors) =
$3.58 cost per unique visitor
Cost Per Impression
Unfortunately, measuring cost per conversion isn’t always a function of how much business you can steal from your competitors. But what then does billboard advertising usually cost?
Here’s another element I like about billboard advertising, impressions are measured by an industry standard metric called EOI.
EOI is short for Eyes On Impression. Formerly, outdoor media was sold using a metric called DEC. DEC measured only circulation of a billboard–that is, the total number drivers 18+ that passed by a billboard daily. Unfortunately, this didn’t take into account the demographics of the driver, the size or visibility of the sign, or even which side of the road the sign was on. Obviously, this led to billboards with comparably high DEC, but low visibility and small size selling for far greater than their true worth.
EOI, on the other hand, is a metric devised by the Traffic Audit Bureau (TAB), an independent auditor of out-of-the-home media. EOI, by comparison with DEC, took into account visibility, size, distance from road, and traffic on road to establish a rough, but largely more accurate, scale of the amount of 18+ drivers/pedestrians that actually looked at the sign.
Unfortunately, numbers like “what percentage of people actually TIVO through commercials on a per station basis” or “what percentage of people change a radio station during commercials on a per station basis” are largely unavailable or hidden. With outdoor media, these numbers are more readily available. That being said, it would be ideal if they hired professionals to actually stand and watch passers-by, counting whether drivers looked at a given sign or not; but in actually, TAB simply uses what they call ‘Visibility Adjustment Indices’ (VAI) to discount the DEC. In my opinion, that’s a not a huge problem since all things even out over the long run, no?
As for pricing: whether you’re looking at a 14″x48″ or a 10″x40″, you’re typically looking at about 0.3¢ per impression. That is, if a given billboard sign has an EOI of 500,000 (which is on a per week basis), expect to pay close to $6k per billing cycle (which is on a four week basis). Often, you’ll try to get sold the increasingly popular “Trivision” signs (a fun euphemism for “you have to share your signage with 2 other businesses”), but these cost/impression are typically higher than you might expect. Whether it’s a rotating board or digital sign, expect to pay 0.15¢+ for a 1/3rd share of a given sign.
Always do your math first, advertising should be taken on a case-by-case basis. But I’ll be honest, I’m a rare, sometimes lonely fan of outdoor signage given the right niche. If you’re considering moving forward on advertising & looking for a bit more help on deciding the right media outlet, you can always find resourceful help and honest opinions here.