The cost of billboard advertising is variable and depends on several factors, including location, circulation, size, format, and demographics. According to PJ Solomon’s Media Monthly report for March, 2021 you can expect to pay an average of anywhere from $2-10 per thousand impressions for a static billboard ad, and between $9-32 per thousand impressions for a digital billboard or OOH ad.
This variability means it’s important to understand just where and when you want to reach people with an OOH campaign before you go to set a budget. Do you want to catch the attention of people waiting for the bus or running to catch a plane? Or maybe do you want to put up a billboard ad at a prominent downtown location to stop pedestrians in their tracks?
OOH inventory is found in cities, at roadside, in malls—they’re a part of our daily landscape and provide a level of visibility not available to other types of media. And unlike popular digital formats, there’s no off-switch or ad-blocker people can use to avoid seeing your messages.
In spite of these benefits, according to the Out of Home Advertising Association of America (OAAA), media buys for OOH advertising are roughly only 4% of the average business’ marketing budget, despite the average person spending more than 70% of their days away from home (in a non-pandemic year).
So how best to price for billboard campaigns and think about ROI? To start, you’ll need to understand a little more about the specifics of the medium, as well as the unique opportunities it has to offer you.
Static billboards: Tried and true tools for mass messaging
Quickly, let’s set the scene for what opportunities exist for buying billboard ad space.
First, you have traditional or static billboards. These are still very much a part of today’s OOH landscape, even as digital billboards are popping up all over. Traditional billboards are usually pretty simple; you buy up space and a single ad will appear in that space for the amount of time you agree upon with the seller – typically at least a few weeks.
Static billboards are incredibly popular choices for big and small brands alike, and in particular those with large or all-encompassing target audiences. Since billboards are so highly visible, they present an excellent opportunity for you to reach a lot of people at once, provided you’re not looking to connect with only a very specific niche audience.
And there’s no beating the longevity of a static billboard ad. It would cost significantly more to buy up a comparable amount of ad time on a digital billboard, and that ad time would be split up into many smaller slots. If you want to hit the same audience with your message over and over – maybe while they’re back and forth on their daily commute – a static billboard is a great choice.
For buyers, static billboards are also much more available than digital billboards most of the time – there are just many times more static billboards out there than digital ones.
Digital billboards: Targeted buying outside the home
With digital billboards, you get the same giant format to deliver beautiful creative to a mass audience as you would with a static billboard – you just also get a little more technology to work with.
Along with the rest of the digital out-of-home space, digital billboards offer the ability to deliver messaging tailored both to the audience and to whatever conditions you want to establish. You can book up ad time and show a different ad if it’s sunny or if it’s rainy, or automatically show an ad only if the hometown team wins. With ads scheduled and delivered lightning-fast by connected computers that drive the billboard’s display, there’s incredible flexibility and creative potential in digital billboard advertising.
Beyond that, digital offers tons of potential for self-serve campaign management using software like Campsite. These tools provide full control and flexibility over the campaigns you want to run —a handy tool for developing impactful out-of-home and omni-channel campaigns. Buyer-friendly tools like these facilitate the process of running a DOOH campaign, and can allow you to go from idea to execution in a matter of hours, or even minutes.
Example: This campaign in support of a climate march was conceived of and executed in just hours
By getting creative up and running in minutes, you’ll have the power to proactively target audiences based on criteria like demographics or location. Not only that, but you’ll be able to whip up a campaign to quickly respond to current events, if you need. This can ensure a successful and memorable campaign that speaks directly to your audience.
Digital billboards also afford your business the opportunity to get more playful with the format. Through digital, you can explore the possibility of animation, video, and even incorporate interactive elements. All of these are effective ways to engage your audience through digital displays. And the bright displays don’t hurt, either. Unlike with static billboards, no additional lighting is needed on a dark night. Colourful, eye-catching screens have the power to mesmerize and, more important, get the message across in a big, hard-to-miss way.
For these reasons and so many more, digital billboards are considered hot-ticket items. Fewer tools at your disposal have as strong an impact on a passerby’s attention than billboards, especially given that many people across the world spend a good chunk of their days commuting either in their cars or in public transportation (yes, even during a pandemic).
Billboard CPM & impressions, explained
Like other kinds of advertising, billboard ads are typically priced according to a number known as the “CPM.” CPM means cost per thousand (or mille, the word for “thousand” in Latin), and so represents the cost that advertisers have to pay to reach a thousand impressions/views with a billboard ad. One impression is meant to correspond to one person viewing the billboard one time.
On average, the CPM for a billboard varies, but is typically significantly lower than other formats. Per a PJ Solomon report released in 2021, the average CPM of a bulletin (the largest-sized billboard) ranges between $2 and $7 per thousand impressions. For posters (smaller-sized billboards), CPMs tend to be within the range of $2-10 per thousand impressions. Digital is a little more expensive, falling between $9 and $32 per thousand impressions.
For the sake of comparison, a broadcast TV ad can have a CPM of anywhere between $10-32. Online display ads seem like a relative bargain at just $1-3 per thousand impressions, but audiences have largely tuned these out in recent years, making ROI a challenge.
Want to dig into OOH metrics a little deeper? Check out this blog post.
How impressions work in OOH
A specific billboard’s price will largely depend on a few key pieces of data, including the number of impressions it receives over a given timeframe. Other factors include the size, placement, proximity to viewers, and expected dwell time (the time that a viewer spends absorbing its messaging). In general, it is the impression count that tends to be the most important influence on a billboard’s price, though the way in which this is calculated is a little different than in other advertising media.
Unlike with search or social media advertising, OOH ads do not have a 1:1 ad placement to impression ratio, meaning one person is served one ad at a time. OOH ads are instead a one-to-many medium, which means that each ad is going to be seen by many people at the same time. For this reason, it doesn’t make sense to count a single ad placement or play as one impression. The solution is to assign an “impression multiplier” to each ad.
An impression multiplier is just a representation of the number of people expected to see an OOH ad over the course of its display, and is used for planning and purchasing campaigns. In smaller locations, the multiplier might be a relatively low number, reflecting the tiny foot traffic going through the area. For prominent areas, a CPM might be in the tens of thousands.
These impression multipliers should not be created out of thin air. Leaders in the OOH space have made amazing progress in recent years in adopting precise audience measurements that allow for fair transactions of OOH campaigns.
Common tools for this purpose include software solutions like Linkett and Quividi, which can be used to monitor on-location traffic trends and real-time activity. Other practical solutions to track out-of-home analytics come from organizations such as Geopath, which specializes in researching audience location data and often partners with OOH businesses looking to harness its insights for pricing their inventory.
There are many more methods of measuring audience number and traffic flow, and some businesses will even combine numerous sources to paint a more comprehensive picture.
Understanding the location factor
It should come as no surprise that one of the major elements that determines the price of a billboard is its location. After all, a prominent and highly visible location constitutes a decisive benefit for your business—the right spot means your messaging can reach thousands.
Billboards can be found everywhere and anywhere, but they’re mainly made to be in the most obvious parts of our landscape, including:
- In cities
- Along highways and major roadways
- In or near public transport terminals
If a billboard is located in a premium area like an urban centre, that’s going to cost a little more than it would in other locations. Similarly, if a billboard advertisement is put up along a major roadway, this will affect its pricing too. Also, the side of the road your OOH signage is located on will also have an impact, as the signage will either be directly visible to oncoming traffic or not.
The “right” location for an ad is going to depend heavily on what is being advertised. While a fast-fashion ad will feel right at home in the heart of Times Square, you wouldn’t likely be purchasing space for the same product along a rural highway.
Exposure by circulation
Yet another consideration in the pricing of billboard advertising is circulation. This metric tracks the number of passersby exposed to a billboard or out-of-home signage in a specific region or market. Media owners work with local municipalities and transportation authorities to count the number of cars going by, tracking the circulation rate, while considering certain elements. For example, if the vehicle is travelling past the billboard in the morning, it’s typically presumed that the driver is alone in the car as they are likely commuting to work. That means it’s a single view.
Increasingly, more companies and third-party software providers are performing deep analyses to achieve a more accurate assessment of a billboard’s circulation.
Demographics & pricing
As is the case with many different advertising formats, demographics are going to play a part in the pricing of your signage.
Demographics determine the breakdown of age, gender, purchasing habits and of course, income bracket for potential consumers. Pooling and analyzing these metrics can help advertisers recognize who is more likely to be seeing their ad.
An example of when audience demographics come into play is when you have a billboard that’s positioned near an affluent part of town, or in an environment in which a lot of affluent people work. These billboards will be more likely to cost a little more, given that the neighbourhood’s residents probably have higher disposable income.
The benefits and cost of creativity
Though it may sometimes seem as if it were the case, the best billboards don’t just pop out of thin air. Like any form of advertising, careful planning and a team of creative experts are typically key ingredients for a billboard’s success.
Whether you have an in-house marketing department or you count on the expertise of a trusty creative agency, plain or mundane billboards won’t get you noticed. Effective copy and striking design are two major considerations when bringing your billboard to life. These elements will add to the overall cost of your billboard advertising project — but the right creative can be the difference between a strong or weak billboard.
Beyond the basic creative costs, there can also be additional expenses related to executing more complex digital campaigns. Whether you’re looking to have visuals that change dynamically in response to a data feed, or you’re trying to create an interactive experience for the audience, you might find it takes a fair bit of work by a team of technical experts to bring the vision to life. It’s totally worth it – nothing stops an audience in their tracks like a gorgeous, clever ad that makes great use of technology behind the scenes. It’s just also the kind of thing that will cost extra to make happen.
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