How to Set Advertising Rates
The potential for revenue with digital billboards is greater than with static billboards. This video will help you understand how to set rates and keep advertisers happy.
Researching other media rates in your market and using CPM calcuations can help you set digital billboard advertising rates. Remember that advertisers tend to be more successful when they use digital outdoor and keep their content fresh.
A little homework is required to set billboard rates that give you a good return on your investment but also compare well to other forms of advertising in the area. Start with some solid research in your market. Look at rates for other digital billboards in your market. Check out who is on the billboard and talk to those advertisers about what rates they’re paying.
No other digital billboards in your area yet? No problem. Look at the cost of traditional media in your market. The cost of a full page ad in the Sunday paper is a good starting point for spots on your digital billboard.
Once you’re in the ballpark on rates, get a traffic analysis done for your board’s location. Use the figures from the traffic analysis to calculate the cost per thousand impressions – or CPM – for your customers. This figure lets them compare your rates to traditional media. They’ll see that your digital billboard offers a significantly lower CPM than any other form of advertising.
A key aspect that often gets overlooked is educating customers on the real value of digital advertising. Spend time learning about and understanding the capabilities and advantages that digital billboards offer over static boards. Things like ad timeliness, day-parting and dynamic content are all huge selling points that will sway many customers away from static media.
Once you get advertisers interested in the power of digital billboards, don’t charge them for creating content. Instead, build that cost into your rates and offer content help as a value-added resource. This gives you the opportunity for a lot of interaction between sales and customers and really strengthens relationships. Businesses that change their content more often during a contract are far more likely to renew.
A final thought on setting rates – always begin with a rate that’s a little higher than what you initially calculate. 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 competition requires it.
Remember, the CPM of your digital billboard is going to be far lower than any other advertising medium. Doing a little research up front ensures you won't start too low and miss out on a lot of revenue potential.