Digital billboards in the right locations drive big revenue

Digital billboards in the right locations drive big revenue

By Vince Miller, General Manager, DDI Media

Digital billboards have been around for more than a decade now, so I'm always surprised when I read or hear comments bashing digital billboards as risky or too expensive. The truth is, digital billboards can be a great investment — in the right location.

As the general manager of DDI Media, an outdoor advertising company in St. Louis, we made our first investment in digital billboards in 2009. Today we have 17 Watchfire digital billboards and soon will install two more. Our total digital network will be 21 faces.

While digital billboards make up a very small portion of our outdoor inventory — currently just 19 of about 1,150 total faces — they generate 10 percent of our revenue. That's because we're strategic about where we place digital billboards, our sales staff understands how to sell digital space, and our advertisers are taking advantage of the unique marketing communication that digital billboards enable.

Static billboards are still a great choice for many locations and advertisers — we have hundreds of static faces and many advertisers who find them to be perfect for their marketing goals — but digital billboards are able to help us in areas where we do not have enough supply to meet demand. Since outdoor advertising is a heavily regulated industry, digital can be a key vehicle to grow our inventory. Converting one static face to digital increases our inventory by a factor of six.

The key to success is having advertisers understand the unique benefits of digital:

Digital is flexible. Advertisers can buy short increments of display time on a digital billboard that's not possible on a static billboard. In fact, we sell six figures annually just in roll-over lottery business. This is inventory that the lottery buys when jackpots reach predetermined thresholds. That's new revenue for our company that wouldn't be available to us if we had only static boards.

Digital can be changed frequently. Advertisers that need to change messages often weren't traditionally prospects for outdoor advertising. Now, advertisers like convention centers that host frequent events can switch out their ads for a fraction of the cost of radio or TV. We've had events like concerts and gem and jewelry shows buy digital space with us that would have never come our way if we couldn't offer them shorter runs bracketing their event dates.

Digital networks deliver targeted coverage. Our 19 digital faces can cost effectively deliver coverage market-wide or to specific areas in St. Louis. We think the network we've built is more cost effective than any advertising alternative for advertisers who want to cover the whole market and at the same time can be hyper-targeted with one or two faces for advertisers drawing customers from tightly-spaced geographies who don't want the "waste" that would come from buying broadcast coverage on radio or television.

Digital is quick. We can get a digital message up within 30 minutes, compared to 24-48 hours for other media. This fast turnaround is crucial for time-sensitive advertisers.

Digital billboards aren't for every location. As a former CPA, I do a pro forma to show the revenue we can expect to generate for a prospective digital location. This involves first reviewing the supply-and-demand needs of the area. For the forecasted digital rate, we use the static face rate at a modified percentage we've found to work in our market, and multiply that by six slots. We then calculate the incremental cash flow that the digital billboard will generate. We look at the cost of the board and decide if it makes sense for that location. We meet with our real estate and sales staffs to discuss their analysis of the location. Not every location we've considered has made the cut, but those that do have been the primary drivers of our company's growth.

Finally, and not incidentally, digital billboards allow my company to be more supportive of community events; something that isn't cost-effective on static billboards. We use unsold slots to advertise messages for nonprofit and community events, including anti-drug messages for schools and Crime Stopper programs for local police departments.

As with every billboard, I have some digital billboards that are more profitable than others, but each has been a good investment. The key comes down to the right location, supply and demand, and finding the right advertisers for the unique benefits that digital billboards offer.

Vince Miller is general manager for DDI Media, the St. Louis-based one-stop resource for billboard advertising throughout the Midwest. For more information go to: www.ddimedia.net.

Cover image courtesy of DDI Media.


Topics: Advertising, Digital Billboards, DOOH Advertising, Trends / Statistics


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