How Much Money Should You Spend On Billboard Advertising?
by Arnab Dey Advertising 20 July 2022
Out-of-home, or OOH, marketing is one of the oldest forms of marketing that is still being used today because it simply is effective. OOH, media can be everything from a billboard to a taxi cab using a branded wrap to advertise a business.
Any kind of media that a potential customer can experience outside of their home falls under the banner of OOH media. The most famous example of this is Billboards.
Billboards have been used for decades and continue to be an effective and high-yield marketing strategy for businesses to expand brand awareness and reach new potential customers. One of the main reasons that this form of marketing is still going strong, is that it’s the most cost-effective way to reach a wide audience.
Billboards provide a platform that can reach thousands, hundreds of thousands, or even millions of people a day. Not only do billboards have the ability to interact with a high volume of people, but they also bring a certain sense of validity to a brand.
The largest, most successful, and loved brands on the planet have used billboards as part of their marketing strategies throughout the years. By using the same method, you can alleviate your business and bring a certain sense of validity to your brand.
Billboards are an incredibly powerful marketing tool, but they absolutely do not come for free. Billboard costs, as you might expect, are not always going to be uniform either.
There are a variety of factors that can impact the cost of a billboard that has to be taken into consideration. While some billboard options may be more expensive, they could also have advantages that justify the risk of investment.
Most Important Factors To Remember When It Comes To Billboard Costs:
1. Population and Location
The first factor to take into consideration when it comes to the cost of a billboard is the population surrounding the billboard and its placement. It’s no surprise that since a billboard passively shares information with potential customers that areas with high circulation and foot traffic would naturally be considered premium and more pricey.
For example, a billboard in a small rural town of 18 thousand people in the midwest will have a drastically lower price than one located in central New York City.
The more people that can interact and see the billboard, the higher the premium on that location will be. The same goes for placement, even within larger cities.
It’s always going to be a higher cost to place an advertisement where more people will naturally be located.
The good news about advertising in a large city like Chicago, or New York City, is that there are other options aside from billboards if your budget doesn’t allow for an expensive placement.
For example, options like urban panels outside of subway stations, or OOH media at bus stations can still be an effective way of reaching a large population that may cost less than a billboard.
2. Type of Billboard
Another factor that can impact the price of your billboard is going to be the type of OOH media that you choose. For example, there are digital billboards that may be much more expensive than non-digital, and even spectacular billboards which are high-end digital boards with more capabilities.
The advantages of investing in a digital billboard may be worth the cost. High-quality digital screens are able to display eye-catching advertisements in ways that traditional billboards struggle to compete with. Not only that, but spectacular billboards oftentimes have the capability to use special effects, video, and in some cases can even be interactive.
How Do You Justify Billboard Costs?
To figure out what kind of budget is justifiable for a billboard takes knowing the ‘impressions’ that it is making.
An impression is a measurement of the impact that a billboard has based on its location, the kind of billboard, or format, as well as the foot traffic or circulation around the billboard. The higher the estimated impression, the higher the cost.
These analytics that quantifies impressions are measured in CPM, which stands for cost-per-thousand impressions. Based on the projected added cost, the CPM will be higher or lower.
So if the projected CPM is five dollars, and the expected impact will be 100,000 impressions a day, then the total cost of the billboard would be $500.
This breaks down into three things, total cost, CPM rate, and ad impression. The total cost of the billboard over a set amount of time is the result of the cost of its projected impact.
The CPM rate is the cost of the campaign per 1000 exposures. The ad Impression is then the combined total exposures projected over the set time frame.
Billboards are a powerful way to spread brand awareness and build brand validity. There are a lot of factors that affect the cost of a billboard, and thankfully a lot of options to choose from as this is still a very popular form of marketing. With a little work, finding the billboard that fits your budget is something that you and your team can absolutely do.