Digital Billboards: A Growing Opportunity for the Display Business
As was demonstrated in the March issue of InformationDisplay magazine, advances in technology have allowed large-area displays to have a dramatic impact on the digital signage industry. The benefits to the outdoor-advertising industry of shifting to dynamic electronic signage seem obvious, but it is the benefit to the bottom line that is truly driving these advances. And that makes this niche a strong market for display makers to target.
Indeed, these are revolutionary times for the outdoor-advertising industry. Once considered the least targeted of marketing tools, billboards are poised to join the digital revolution, taking on characteristics such as flexibility and immediacy of broadcast advertising, the Internet, and e-mail in one package. Not bad for a medium that's been around for more than 100 years.
Digital billboards - display ads using light-emitting diodes (LEDs) - are expected to rival other advertising media in the coming years, including TV and radio, across many crucial metrics, everything from market coverage to ease-of-updating timely messages. Unlike traditional static billboards, advertisers with time-sensitive offers now can consider outdoor advertising an option. "Going digital" addresses many of the drawbacks normally associated with billboard advertising.
Traditionally, one of the biggest complaints about billboard advertising is that it is a cumbersome approach to reaching an audience. Digital billboards address this problem with ads that can be formatted as static JPGs that are sent to signs via a high-speed Internet connection and scheduled with user-friendly software. Now, viewers can see messages that are time-and date-specific and are designed to deliver immediate results.
For example, a fast-food restaurant can display messages by time of day, running one message in the morning promoting breakfast sandwiches and another during the evening drive home featuring entrees with a dinner message. Advertisers also will be able to test messages for timing and impact, and then tweak their billboard messages for maximum return on investment (ROI).
With so many mediums vying for the attention of customers, digital billboards hold an advantage. Unlike television and radio, there is neither an attention-seeking alternative nor a digital-video-recording mechanism such as TIVO where users can record programs and then skip over advertisers' messages. Unlike the Internet, there is no pop-up blocker or delivery filter. However, the primary drawback to traditional outdoor billboard advertising has always been the ability of the audience to walk, drive, or ride past the ad without it engaging them. Today's customers expect to interact with brands. Static, vinyl billboards do not allow that.
Advertisers are just starting to imagine how to leverage technology to make digital boards interactive. A good example is the Mini Cooper car manufacturer. Mini Cooper's marketing group equipped their billboards with a chip reader that recognizes "Minis" as they pass the signs, then sends personalized messages to drivers. The goal is to foster feelings of community and being part of a special club of Mini drivers.
Last summer, CBS used Bluetooth-enabled billboards at New York's Grand Central Terminal to beam video clips from its fall primetime lineup to Bluetooth-enabled cell phones, smart phones, and PDAs. The video was only downloaded if the consumer accepted.
Digital billboards are seen as a boon for outdoor-advertising companies. They allow multiple advertisers to share a single billboard and enable day-parting or dividing the day into several time-specific sections during which a different ad is shown that is appropriate for that time and audience. Advertisers generally are willing to pay about the same amount for one-sixth of the time on a digital billboard as they had previously paid for traditional vinyl or paper boards. This leads to an increase in monthly revenue for outdoor advertising companies that can go as high as 8-10 times the initial monthly fee. A traditional board worth $4000 a month converted to digital can be worth up to $40,000 a month. Best of all, for the advertiser to reach a consumer, digital billboards are usually just a fraction of the cost of other electronic media, such as television and radio. Costs to advertisers are measured in what is known at the cost per thousand (CPM), which measures how much it costs to reach 1000 persons in the audience. For billboards, the CPM can be as low as $2 vs. television where CPM is typically $15-$20.
Many municipalities have ordinances that prohibit outdoor companies from erecting new billboards without first taking down an existing board. These "cap and replace" laws have limited the amount of income that an outdoor-advertising company can achieve. Digital billboards that serve multiple customers address these restrictions without adding additional display sites.
Outdoor advertisers can give back to the community by running Amber Alerts and other public notices, making digital billboards an important part of a city's public notification system. This spirit of cooperation will encourage state and local governments to review and write ordinances to permit digital billboards.
As advertisers' recognition of the value of outdoor display-based advertising continues to increase, the demand for such displays will grow along with it, making this sector an intriguing one for display manufacturers.