In the past few months we’ve talked with independent operators about sales calls they’ve made on small, local advertisers. To no one’s surprise, many business owners have said they are holding tight to their surplus cash. If they do decide to invest that cash in advertising, it will have to be in a medium that has shown a proven return. Of course, because digital billboards are the new kid on the block, most local advertisers have yet to try us, and don’t have experience to fall back on. Instead of a roadblock, we view this as an opportunity.
In recent years, tax laws have been very favorable for billboard operators who want to invest in digital billboards, and 2012 is no different. Congress reinstated the bonus depreciation deduction and Sec. 179 expensing limits, providing a favorable expensing climate for qualified property acquired and placed into service by the end of 2012.
Interstate 70 Business at Main Street in Grand Junction, Colo., is the location of the city's first digital billboard, installed by Mile High Outdoor and manufactured by Watchfire Digital Outdoor. The 10' x 30', 19mm digital billboard replaces a static billboard in the same location.
The first six to twelve months after your digital billboard went live were great. The newness of the location helped create buzz and advertising sales were strong. But as those first long-term contracts begin to expire, there may be a few advertisers who pull back on their budget and don’t renew at the same level.
This an excerpt from one of my recent blog posts at Digital Signage Today. I think this is an important topic because digital billboard operators who set their rates based on their static boards or on gut instinct could miss out on a significant revenue opportunity.