What Wikipedia Can’t Tell you About Billboards
Outdoor Advertising is considered a mass market medium, like TV and Cinema advertising. Outdoor or OOH (out of home) refer to those advertising spaces outside. They are usually used to convey broad messages and support campaigns. We all see billboards while driving to work, trying to persuade us to get a mortgage or try a new medical clinic. But have you ever thought how much these huge commercials cost? Or do they even see ROI?
Billboards are considered a premium advertising space. They are everywhere and have a powerful branding impact. With digital (online) advertising becoming the most popular medium, it’s important to know why companies are still using billboards AND how much they are actually paying for them.
Renting a Billboard
Billboards are managed by OOH or Outdoor media companies. These companies are run like a real estate company. They usually own boards in several locations and rent them out on 4-week cycles. Rentals are usually done by ad agencies or companies directly. Looking for prices on the operator’s website is hopeless, as most of the prices are negotiable and change based on size, the time of year and demand. Just like in real estate, an operator with an empty board will decrease prices substantially, and an operator with a high demand will spike up the cost.
How is the Cost Calculated?
Billboards use a rating system called GRP (Gross Rating Points). The term refers to the total number of impressions in duplicated exposure delivered by media schedule expressed as a percentage of a market population. WAIT- what? Basically, this calculates what percentage of the adult population is exposed to the ad. GRP 100 = 100% of the adult population. This rating system provides a convenient way to communicate the audience coverage in terms that advertisers can understand. There are also more complex metrics such as CPM (cost per thousand) and CPP (cost per rating point), but for now we will stick to the basics.
GRP helps us understand the effectiveness of the boards visibility, and is a base for pricing. Billboard pricing usually isn’t very transparent, as we wrote earlier, and it can fluctuate due to supply and demand. We did some research and these are some of the prices we found: Depending on the location, you can book a billboard for as little as $350 up to hundreds of thousands. See the infographic below for indications.
This is another important factor in billboard advertising. Like in real-estate, rent is charged per month, and expenses are not included. Similarly, billboards are non-inclusive of production fees, which are printing the ad (usually vinyl sticker paper) and installation. This is a one-time fee and an ad might stay up for 3 months, but the productions costs are only charged once. This price is calculated based on the size of the board and the location. If the billboard requires ropes and harnesses to install, prices may be significantly higher.
Choice of Supplier:
Choosing a supplier can impact the price greatly. It’s important to shop around and get the best possible deal. You can use the OAAA website or Billboard Insider to find suppliers in any area. In the world of billboards, cheap isn’t always the most effective. Look at ratings and value. Location should be takin into account when choosing a board, and your target market of course. In our next article we will discuss how companies calculate ROI and the effectiveness of billboard advertising. Stay tuned!