How The Cost of a Billboard Is Determined

“If the 20th century was known in marketing circles as the advertising century, the 21st may be the advertising measurement century.”

Stuart Elliot of the New York Times wrote in 2007 about the problems and solutions that outdoor advertising agencies have compared to other forms for quantifying hard and reliable statistics about the people that look and remember advertisements. Now, TAB OOH (“Out Of Home”) Ratings is the standardized research program that reliably calculates the effectiveness of out of home advertising. This information is essential because it ultimately helps determine both the price of the board and the real value of the advertisement itself. This is important, because before TAB’s system OOH advertising was using something called DECs. That means “Daily Effective Circulation”, but the system was severely lacking compared to more accurate measuring methods used in other advertising mediums.

So what does this mean? The price of a specific billboard varies because of the many different factors that change how many people see the billboard and how many are actually paying attention to the advertisement. Location is obviously the biggest factor here, but height, whether the board is illuminated at night, and any major obstructions to the view could influence the effectiveness as well. Upkeep cost is relatively cheap, all things considered. What needs to be quantified here is how long the eye is on the advertisement. A strength of outdoor advertising is the inability to be ignored, so a key spot near a road with high traffic or at a red light so people have no choice but to stop and look at it means the advertisement and product has a consistent and reliable exposure. Is it near a key exit on a highway? That means high traffic and is a very valuable spot. Illumination on a billboard means your advertisement would be able to stand out even in the night, would you want your advertisement wasting space unnoticed during dark hours or do you want to maximize the rented space by being constantly visible? Placement near the drivers are also convenient; you would rather the billboard be closer to eyelevel of the driver than some arbitrary or otherwise inconvenient height. It’s also important to consider which side of the road your ad would be on, since it effects who is looking at it and just how many are looking at it.

Not only are numbers of people important, but placement concerning demographics are also important to consider. That’s another really useful feature of TAB’s system: they figure out where the best place to reach your target audience is. Now, it’s the ad agency’s responsibility to provide context to the numbers for clients to make informed decisions, but with that context the advertisement can exceed expectations and bring success to businesses, no matter the size.

So, are billboards effective for small businesses? Certainly. It’s even effective enough to pull attention away from other media. Some advertisements can be innovative and creatively combine different media, and it’s now encouraging for advertisers that never even used the medium before. Below are some links providing examples and some data about the reliability and approval of the TAB OOH system, and how effective billboards can be and how many factors can change the price of a spot.

Share our post with your friends!


Explore Our Blog