What Factors Influence the Cost of a Billboard?

By Frank Coutinho | May 07, 2018
Photo by: Pexels What Factors Influence the Cost of Billboards?

According to Inc, billboards are still an effective form of advertising, despite being considered a more older, traditional form of advertising. Researchers have been assessing whether billboards still provide a positive return on investment for marketers, and the results have been overly positive, with approximately twenty-four percent of participants in a study saying they immediately visited a business because of an outdoor ad message, and with thirty-two percent of study participants reported visiting a retailer they saw on a billboard later that week. There are many different factors involved in determining billboard advertising costs, such as the location of your billboard, the size of your ad, lighting, visibility of your billboard, the level of competition in your area, impressions, the production of your billboard, among others. In this article we will be deconstructing some of these costs in greater detail to help you understand how these costs may be determined when you advertise will billboards.

 

Location

Billboards in cities often cost more to rent than billboards in the countryside. This is obviously due to increased traffic and higher impressions. In terms of geography, you are also likely to pay more for billboards in larger cities compared to smaller cities. For example, the cost of billboards in New York City ranges from around $3,000 to $20,000, while Los Angeles billboards costs can range from $2,000 to $15,000. Chicago billboards can cost between $2,000 to $12,000, while San Francisco billboard advertisements can cost between $2,000 to $12,000. Just for comparison's sake, Philadelphia billboards can cost between $1,500 to $12,000. Freeway billboards usually cost more to rent than state highway billboards. State highway billboards on the other hand usually cost more to rent than secondary road billboards.

 

Lighting

You can get a billboard with lighting, and without lighting. A billboard with lighting can go for a 25% premium over a billboard without lighting because the billboard will be available to many more viewers during nighttime. The billboard’s lighting leads to more impressions. Casinos and all-night restaurants are especially interested in billboards which are lit all night. Cracker Barrel and some retail stores sometimes ask billboard companies to turn off the lights on a billboard prior to store closing times so they don’t have customers pulling up to the establishment at closing time. Of course, billboards with lighting also require more maintenance and upkeep than billboards without lights.

 

Size

A larger billboard means that it is more visible, and easier to see, and is in greater demand to be rented. Naturally, if there are more buyers lined up for larger billboards, then the pricing will go up because the buyers can compete amongst themselves for the placement of the billboards, similar to an auction.

 

Impressions

A typical billboard sells for a CPM or cost per thousand impressions of $5.21. A freeway billboard which can get around 500,000 impressions in a 4-week period can be priced at around $2,000/period. However, a billboard on a country road with only 30,000 impressions a month will rent for much less, approximately $600/period. You can usually acquire impressions data from your billboard company to verify or determine what CPM you are paying.

 

There are many advantages to using billboard advertising, and despite being considered an old-fashioned form of advertising they are still providing an ROI to advertisers. You may have been wondering what was involved in buying billboard advertisements, and now you know some of the factors that will determine the pricing of your outside display ads.

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