I find it more than a little ironic that over the years, the digital signage and DOOH industries have spent countless hours and huge sums of money talking about the best way to advertise, the best way to inform and the best way to get noticed, yet we almost never talk about these things in one of the best possible contexts — where we have hard data about what works and 50+ years of compiled data on best practices. I'm talking, of course, about the great outdoors. In that environment, large-format displays like LED billboards inherit the mantel of traditional out-of-home advertising, and routinely generate more money per screen than some whole networks of indoor digital signs ever will. While I know a lot of folks think those big, roadside displays have nothing at all to do with their business, I think many could benefit from learning a bit about the business models and content practices that make them tick.

The benefits of out-of-home messaging on LED billboards

Obviously, the main benefit of outdoor advertising is the sheer size of the potential audience. The large LED billboard on the stretch of I-95 near my home probably catches the attention of several hundred thousand people each day. The much smaller display near our city hall probably sees several thousand. In contrast, aside from our local supermarket, most of the stores in my town would be lucky to see 50 patrons a day, making them poor venues for advertising upcoming events and important notices.

Additionally, there are a wealth of resources to help the display's manager create impactful messages. While outdoor displays may have large audiences, they are typically fleeting. Thus, brevity is paramount (meaning I'd be terrible at it), and things like screen contrast and color choice are critical. A lot of our content best practices for digital signage actually originated from best practices for billboard advertising, and were tweaked as we learned what special tricks digital displays could do.

Finally, if you're in the advertising biz and not just trying to show public service messages, the typical business model for outdoor LED billboards reinforces our survey finding that advertisers really like reach-based pricing models, such as CPM. While I'm sure there are some digital billboards out there that aren't profitable, many, many are. In fact, I've heard from a number of billboard owners who replaced some static displays with digital screens and saw revenues multiply. In one memorable case, the owner was charging around $2,000/month for a static billboard, but was able to charge that same $2,000/month seven times to the seven advertisers whose content rotated on the screen. I don't know if that's a typical result, but where the indoor digital signage market seems to be comprised of a few successes mired in a sea of failures, in the digital billboard market, it seems to be quite the opposite. Granted, the digital billboard market is also home to some deep-pocketed network owners, but I still think the point is a fair one.

If digital billboards are so great, why isn't everybody installing one?

If you were to judge the popularity of various types of digital signage by the number of comments my blog articles attract, then LED billboards would far and away be #1. An article on Electronic Billboard Pros, Cons and Safety Information that I wrote back in 2004 has attracted an astonishing 145 comments over the past 8 years. Admittedly, most of them are from far-east manufacturers of the displays looking for some cheap publicity, but still…

And yet, for all that, there are probably only a few thousand large-format LED displays installed across the US right now. Why? Two reasons:

1. The displays are expensive — and most folks in our industry are cheapskates.
2. Installation requires wading through bureaucracy — municipalities can set their own rules about what outdoor displays can do, and obtaining the necessary permits can take months.

Behold, the LED Billboard Cost Estimator

All of this brings us to the big question: how much do LED billboards actually cost? Until recently, that wasn't a question that I could answer. In fact, I didn't know a whole lot about these screens until I started researching them a few months ago, and I was astonished by the number of variables that affect both the price and the amount of time it takes to install a display. So, armed with information from a number of seasoned vendors and users, we put together an easy-to-use tool that can help guesstimate what it would cost to install LED billboards of various sizes into different environments:

If you equip yourself with a better understanding of the various cost components, and you team up with a vendor who's capable of actually delivering all of those components (or at least helping you get them all together), a large format LED display project doesn't have to be nearly as horrible as it used to be. And that's a good thing, because there's still a lot of low-hanging fruit in the LED billboard market for crafty VARs to grab.

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