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Learn the basics of digital billboard rate setting

For many operators, the digital billboard business is new territory. Whether you own the first digital billboard in your area, or are starting with a new digital board in an already established market, rate setting is at the very heart of your success.

December 4, 2015 by Darrin Friskney — pr for Darrin Friskney, Clarus Communications

For many operators, the digital billboard business is new territory. Whether you own the first digital billboard in your area, or are starting with a new digital board in an already established market, rate setting is at the very heart of your success. Set your rates too high and you might scare away prospective advertisers, but set them too low and you're leaving money on the table. Every market is different and there are no one-size-fits-all rates for digital billboard spots, but with some simple research, competitive rate setting can provide a good return on your investment. Getting started just requires different skills from those used to marketing static forms of outdoor advertising.

Start with some solid research. If other digital billboards are in operation, see what advertisers are on billboards in the area. Talk to them about the rates they pay and how satisfied they are with the return received on those dollars. If your digital billboard is the first in the area, turn to other more traditional media as a reference for setting digital rates. Any advertiser using other forms of media to promote timely, relevant marketing messages is a perfect candidate for the strengths of digital billboards. For example, look at the cost of a full-page ad in the local Sunday newspaper and the advertisers using it for timely content that might be a perfect fit for digital billboards. The newspaper rate is a good starting point for setting rates on digital spots — and the digital billboard will be much more cost effective in terms of cost per thousand impressions, better known as CPM.

Get a traffic analysis done for each board's location. By using figures from the analysis to calculate the CPM for advertisers, you can compare the value of digital billboard advertising to local, traditional media. You'll be able to demonstrate the significantly lower CPM that digital offers compared to other forms of advertising that don't have the same dynamic features.

Educate customers on digital's capabilities. By understanding the advantages that digital billboards offer over static boards and other traditional media, you can help customers see significant increases in traffic and business. Features like ad timeliness, dayparting, and dynamic and conditional content will change the way your customers envision their advertising campaigns and convert them to repeat digital customers.

Provide assistance with content. Unlike static boards, creating content for digital billboards allows for more creativity and responsiveness to market changes. Charging for help with content creation will limit opportunities for both you and your advertisers. Instead, build the cost of creating content into your rates as a value-added resource. This gives you the opportunity for increased interaction between sales staff and advertisers, and strengthens the relationship you have with each customer.

Encourage content changes during campaigns. It's been shown that businesses that utilize the dynamic capabilities of digital billboards during a contract are far more likely to renew. This happens because the dynamic features are effective, and when advertising works, advertisers renew. Digital outdoor combines interactive and responsive messages with proximity marketing to powerfully promote advertisers and their products.

Reward lengthy commitments. If you can secure billboard spots with the same advertiser for a longer period you'll spend less time and energy finding new customers for those spots. Give advertisers a price break on the cost of longer contracts and you'll see more success.

Begin with a slightly higher rate. If you set your initial rate too low, you'll find it's very hard to increase it later. It's easier to start high, then discount your rates if the market or competition requires it.

Remember, the CPM of your digital billboard is going to be far lower than any other advertising medium. Be strategic in your rate setting and sales efforts, and you'll see measurable results for you and your advertisers.

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