How to Set Digital Billboard Rates
Over the past year I've talked with operators around the country who are actively developing digital billboards. Nationwide, a frequent topic of conversation revolves around setting rates. Those new to digital outdoor, whether they have experience with static billboard faces or not, seem to struggle with how to price their digital space.
Many factors are involved which vary from market to market, making it difficult to set a hard and fast rule for pricing. Location, demand and competitive media in the market all play a role in shaping appropriate market rates.
My advice: Index your pricing to the other forms of electronic media in your market. They tend to be higher than instinctive prices operators usually consider. It is far easier to tweak your rates downward at some point in the future than it is to try to raise them if you start too low.
If you are installing the first digital billboard in the market, advertisers have no baseline comparison – so your rate sets the bar. Even at a seemingly high rate, but one that’s appropriate based on other forms of electronic media, there will be forward thinking advertisers who will recognize the value of digital outdoor.
When upgrading your billboard in an already competitive market, you'll need to find a unique selling proposition that justifies your asking price. For example, prospects could be swayed by the fact that your billboard is located close to heavy retail activity, along a major interstate with lots of exposure, near their target market or across from a competitor. Think like a sales prospect, identify their motivations and soon you’ll be able to meet their needs.
Lastly, be flexible and learn what the market values. Balancing rate and occupancy is the name of the game in outdoor advertising sales. Keeping space rented at attractive market rates is the surest way to make money, because in the end it still comes back to supply and demand. When you demonstrate demand by keeping your board full, it can be easier to get premium rate when a new advertiser wants to buy a slot.
Watchfire customers can who have questions about setting rates and selling digital inventory can benefit from the customized consultation in our Preferred Program. Watch this video to see how our Preferred Program can help you become successful faster.