The Digital Billboard Explosion

Out of Home magazine recently featured an article by Darrin Friskney, Vice President of Digital Outdoor at Watchfire, about the recent explosion in the number of digital billboards in the United States.

In the article, Darrin outlines five contributing factors that are putting digital at the foreground of the Out of Home advertising industry. Here is a summary:

1. Lower cost of acquisition: LEDs are more affordable and in greater supply now than they were just a few years ago. In 2007, a 14’ by 48’ digital billboard was roughly $350,000. Today the purchase price is closer to $180,000. With lower up-front costs, more operators are able to make th initial investment in digital.

2. Lower cost of ownership: Increased energy efficiency in LEDs has reduced the energy use of new digital billboards by more than 50% compared to units manufactured just five years ago. Today a 14’ by 48’ display requires less than 50 amps of service at the jobsite, compared with as much as 150 required amps in 2007.

Lower operating costs mean lower monthly expenses and more positive cash flow. With access to more cash, an operator can invest in more digital billboards and begin to generate even more revenue. This is the power of compounding, and successful operators understand this concept and use it to grow their company quickly.

3. More favorable regulatory environment: Digital billboards are serving a vital role in communities all over the United States; they display Amber Alerts, Silver Alerts, emergency weather alerts and public-safety messages. The FBI and other law enforcement agencies have captured dozens of criminals after posting their profiles on digital billboards.

Towns and municipalities see the public service and economic benefits a digital billboard can provide, and as a result the permitting and zoning processes have gotten easier. There are more permittable locations today than there were five years ago.

4. The media landscape is changing and digital outdoor is in the mix: Advertisers have come to realize that they can achieve a more targeted presence when they add digital outdoor advertising. Media utilization has changed as print readership is in decline and there are now hundreds of options for television and radio consumers. DVR allows users to completely opt out of commercials and local media outlets now compete with subscription-based commercial-free alternatives.

Digital billboard advertising offers a flexible and cost-effective way to target a specific geographic area. Advertisers can change messages frequently, even showing different messages based on conditions ranging from the weather to the time. With digital outdoor, smart advertisers can mitigate the effects of media dilution with targeted advertising at a very low cost-per-impression.

5. Advances in conditional content technology: Conditional content allows advertisers to create campaigns that can be triggered to run in specific situations. Simple “if-then” statements can allow a client to advertise umbrellas when it is raining or ice cream when it is hot. Fast-food restaurants are using this new technology to craft responsive campaigns that promote different menu items based on the outside temperature. To name a few examples, conditional content can be based on sports scores, social media feeds, weather conditions or stock quotes.

Operators who adopt digital sooner rather than later will have a significant competitive advantages as their increased ROI allows them to invest in more digital faces and rapidly grow their business. Are you ready to put these trends to work for you?