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Is There a Place for Billboard Advertising in your Business?

Written by: Brian Smith

Do you notice the billboards along your daily commute?  How about when taking that family road trip or long business trip?  Are you influenced by the message delivered to you while you drive past?

For years companies have been asking this question in an attempt to understand the value of billboard advertising.  Unlike newspaper, direct mail or magazine ads, a billboard ad is really similar to shooting a shotgun at a target too far away to measure accuracy.

While it can be almost impossible to measure the return on investment for a billboard, the fact is that there are certain businesses and locations where a billboard can be cost-effective.  But, with the advent and maturation of GPS technology, mobile phones, and XM Radio, one must question the general value and long-term viability of Billboard advertising.

Today, we limit advocating billboard advertising to companies either extremely isolated along a highway or within communities where the advertiser might have a niche or singular resource for a common consumer need.

For example, a rural town can be isolated and have limited resources for a number consumer needs.  Take hotels; when driving down the highway, one might actually notice a billboard for a hotel coming up in the next 50 to 100 miles.  Once in that small town, you might notice a billboard for the local Tire Center or Wal-Mart, which might be the only options for car repair or shopping for hundreds of miles.  Due to the distances between towns in certain areas, billboards may have a decent return on investment (ROI) to the advertiser.

However, in more suburban areas or cities, that ROI may plummet. Areas with denser populations offer more options to consumers and require a more sophisticated approach towards reaching the consumer.  Have you ever noticed how often the billboards change in these environments, could it be ROI is not working out for the advertiser?  Using cellular or GPS technology to push virtual billboards may work better for suburban or city businesses, as choices for the services they are looking for may be more plentiful and provide an environment where they can stand out in the crowd.

Measuring ROI for any physical billboard is extremely difficult.  In some businesses like hospitality, there is an opportunity to efficiently understand if a billboard prompted a guest; Wal-Mart would have a difficult job collecting data about its customers.

The billboard companies also vary.  There are a number of smaller companies like Stott and Meadows that are generally regional.  These regional companies are generally higher in cost and have very restrictive agreements that can end up costing you more in the end.  Other companies like Lamar or CBS have larger organizations and may offer you an opportunity to try a billboard for a limited time without getting burned by a long-term agreement or expensive exit clauses.

In the end billboards may end up being an effective branding tool and not an effective measurable revenue driver.  Make sure you weigh the cost of the billboard against what other marketing and advertising media options you have.  Resign yourself to the fact that tracking ROI from a billboard may be next to impossible.  Watch out for restrictive agreements from regional companies and make sure you understand you’re deliverable and that it is your message on the billboard.

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