One in three Billboard Insider readers constructed a static billboard in the past year and one in three Billboard Insider readers intend to build a static billboard during the next year.  Here’s how to create value constructing a static billboard.

Double your money

You can get a return of 20-30%/year on capital by building statics.  This means that your billboard is worth twice the construction cost when complete and rented.  See our financial model below.

The middle column shows the performance of a small market static build –  a 10′ by 20′ or 10′ by 30′ two sided steel monopole with construction costs of $30,000, sales commissions of 10% of revenues, lease costs of 20% of revenues.  Revenues are $550/month and occupancy is 80%.  The return on capital is 23%.  What makes the small market returns work is low construction costs.  If the small market board cost $80,000 the board would generate a return of only 8%/year and the value of the board would be less than construction costs.  Now you know why companies like Huntington Outdoor build there small market signs in house.  They need to to keep costs down and returns up.

The right hand column shows the performance of a large market static. – a 14′ by 48′ two sided steel monopole, construction costs of $80,000, sales commissions of 10% of revenues and lease costs of 20% of revenues.  Revenues are $1500/month and occupancy is 80%.  The return on capital is 24%.  In larger markets the construction, permitting and leasing costs go up but revenue per face goes up as well so the returns are still good.

What makes a good static location.

Huntington Outdoor Founder Justin Powell has great advice on what makes a good static location: First, unless it’s a very special case, don’t bother with a location with less than 5,000 a day traffic count. Obviously, more is better. Second, look for what I call “CISD” locations (I always say “KISSED locations”). Here’s what that stands for: you want locations that are either at the end of a Curve, at an Intersection, Slow traffic, or you have Demand from advertisers wanting a billboard at a certain location.

Left hand reads harder to sell.

Age Advertising’s Andy goodman says left hand reads can make sense but harder to sell: There can be good left-hand reads especially on the outside curve.  You’ve got nice visibility to the sign.   A lot of times it looks like it’s dead ahead of you in the center of your windshield.  The disadvantage of a left read and especially if it’s a low billboard you’re not just fighting the traffic heading in the same direction for visibility, but you’ve now got a problem with the opposing traffic blocking the view.  In California you may have to look across 10 to 12 lanes of traffic to see a left read.  If it’s less than 40 ft in the air you might not see it.

Static billboards don’t sell themselves.

Static billboards don’t sell themselves.  You need to put effort into sales.  That means joining the local chamber of commerce and visiting local businesses.  You will struggle if you try to sell a rural out of home plant remotely without frequent visits to the market.

What are your thoughts on static billboards?  Email davewestburg@billboardinsider.com or use the comment form below and we’ll run a followup article.

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