Tim O’Connell (who spent 21 years at Adams Outdoor including stints as CFO and Corporate Controller) has the following suggestion after reading 5 out of home metrics which matter:
One measure which I learned in the hotel business but applies well to billboards is “Average Revenue per Available Unit”. This can be calculated two ways: total revenue for a period divided by the total number of billboards available for sale, or average rate per billboard sold multiplied by the total occupancy percentage. What I like about this metric is that it increases with every incremental revenue dollar, and reminds us that there is an infinite combination of rates and occupancies to achieve any particular revenue level.
Additionally, if we have impressions data for our billboard inventory we can calculate CPM (cost per thousand impressions) which allows easy comparison to other advertising media (and highlights the value of OOH!). Another fun metric is impressions occupancy (percentage of total impressions sold) – since we tend to sell the “best” units first, this percentage is often higher than occupancy calculated by faces sold.
Trends are very important in all of these metrics, so measuring over a time period – such as trailing twelve month averages – lets us know how we are doing!
Tim is in Charlotte and is open to return to OOH. You can reach him at 704-577-2455, toconnell0317@gmail.com
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