By Neil Bell, New South Outdoor

During the downturn of 2008, I remember feeling quite a bit of pressure to try to cut deals to get local customers back advertising. While cashflow was very important during that time, experience has shown me that offering heavy rate concessions makes the revenue hole tougher to climb out of in the long run. Working to raise rates back to pre-downturn levels took years – especially when the opportunities to do so only come at renewal time. Also, many customers who received a heavy discount were resistant to making the jump back up to market rate.

I have learned the hard way, but I have since found a solution. In my experience, the better strategy to increase sales without dropping rates is by giving additional value.

Instead of giving deep discounts, we hold our rate and offer an additional unit or units on a space available basis. If that bonus space is later sold to another advertiser, their ad will then be moved to another unit with availability. This is very easy to do if you have multiple digital units in a market area, but it can be done if you have available bulletins or posters as well. Digital incurs little to no cost to do it, but production and install for the static inventory could still work if those costs could be paid by the customer.

By doing this, we have seen a number of positive outcomes:

• It will help keep your market panel rates at desired levels.
• It will give you flexibility to resell the bonus space to someone else at market rates.
• The bonused units will feature better copy than just a promo.
• Most importantly…it will give your advertiser more impressions and reach (which should make for a more effective campaign).

The customer gets more for their money, the advertising is more effective, and the operator has the flexibility to fill the bonused space for market rates to other advertisers. When ad dollars begin to come back, the outdoor plant is in a better position to generate higher revenue.

I don’t know about other plants, but I seem to always have space available somewhere (As an aside, it is my belief that if all of our inventory is completely full, we aren’t charging enough). I have found that it is better to bonus on your surplus inventory to keep panel rates stable and resist the urge to discount.

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