An Introduction to Billboards
This question compares up a lot. How much does it cost to rent a billboard? Well, it depends on four significant factors: format, circulation, demographics, and impressions. These are concerned with CPM (Cost Per Thousand Impressions) and CPI (Cost Per Impression) data that will determine the billboard's overall OOH rating; how it performs.
An outdoor advertising sign, in the form of a billboard, consists of at least one display panel and its supporting framework. Billboards may be freestanding, mounted to buildings, or attached to other structures. Modern billboards conform to engineering standards and are typically constructed of steel, while older billboard structures are made of wood or angle iron frames.
A billboard may be smaller than the permitted size. This allows for the addition of a cutout or extension within the square foot envelope of the permitted area. Billboards vary in display position and size, but the industry standard display faces include:
12 ft. x 25 ft. = 300 square feet
10.5 ft x 36 ft = 378 square feet
12 ft. x 40 ft. = 480 square feet
14 ft. x 48 ft. = 672 square feet
16 ft. x 60 ft. = 960 square feet
20 ft. x 50 ft. =1,000 square feet
Billboard Advertising - Recent Price Trend
Up until 2017, the price of billboard advertising has been increasing at an estimated annualized rate of 1.1%. This growth has primarily been anchored by rising demand for services. For example, the number of businesses in the United States has increased as the economy has grown. Many of these new companies have chosen to market their goods and services through billboards.
Billboards make up 66% of the OOH advertising market. Across the U.S., 370k billboards are in full effect with about 15k new ones added every year. They're owned by at least 1.2k vendors who generally lease them out to advertisers on a 4 week basis. This type of billboard advertising makes up about 7% of the total ad spending marketing mix. There has been a 35% increase in ad spending dollars towards OOH billboards since 2010. And, by 2021, billboards are expected to grow to be a $33 billion industry.
Billboard Advertising - Total Cost of Ownership
There are few hidden costs for billboard advertising services that buyers will need to pay. Most costs, including setup, lighting and repairs, are included in the purchase price of the product. The most common additional cost is buying design services for the billboard advertisement because the supplier typically does not provide these services within the ad price.
Traditional billboards will cost around $250/month in rural neighborhoods, $1500-4000 in small to mid-size cities, and upwards of $14,000 for larger sectors. Digital billboards can cost more than $10,000 depending on the location. It's important to track your ROI when installing a billboard to manage what's working and what isn't.
Format, Circulation, Demographics, and Impressions
When calculating costs to rent a billboard, it's vital that you look at these factors.
1. Format- has to do with the size and area code that your billboard is placed under; costs will depend on the geographic region and the scale size of the billboard; the more urban the environment, the more you will pay
2. Circulation- the total volume of traffic that passes the billboard; taken from transportation authorities; it does not, however, include whether a passerby sees your ad or not
3. Demographics- the segmentation of age, gender, and income level of people who pass a billboard; you will need to pay more to advertise to people with higher income levels
4. Impressions- the number of people who see the ad, based on size, visibility, and speed at which people are passing by the billboard; this comes from the circulation and geo-positioning of the billboard
Construction and design costs are separate factors from the ones listed above.
The Cost of a Billboard Continues to be Complicated
Cost is always top of mind when thinking about building execution. And this is doubly true when it comes to advertising. Everyone wants the most bang for their buck. But following this mantra, when promoting your business, can literally be the difference between success and insolvency. Savvy advertising drives business and grows revenue, while stale or misguided campaigns can drive a business into the ground.
I say all this to underscore that when people ask me “How much does it really cost to make a billboard?,” I totally understand their plight.
However, like all things in business, it’s not all that simple. Asking how much a billboard cost is like asking how much a sirloin steak costs. It depends on the restaurant, the butcher, the cut, and numerous other factors that come into play. It's not a fixed answer. There are financial implications behind all of these meaty decisions, just as there are factors that determine the price of running your ad on a specific billboard.
Though extraneous factors can affect billboard price, it’s easy to remember factors like format, circulation, demographics, and impressions when introducing a new billboard into the world.
With this is mind, you can be able to solve the cost of your billboard related to your vision of it.