Not Enough Digital Outdoor Billboards?

There aren’t enough digital outdoor boards to interest major advertisers like Procter and Gamble ^[1], says Alan High, president and general manager, Clear Channel Spectacolour ^[2] and Mall Divisions.

^[3]High told the Scala ^[4] Connected Signage Conference audience in Philadelphia this week that, while the outdoor industry’s advertising is about 60% local-40% national, advertising on digital billboards is about 96% local because of their lack of critical mass.

“There are only about 2,700 digital outdoor boards across the U.S. out of a total of about 60,000 outdoor boards,” High said. “The big guys don’t buy much outdoor as it is, but they want national coverage.”

Those figures garnered a lot of discussion after High’s discourse on the revenue roadmap for digital signage.

High said that the total DOOH industry in the U.S. is between $1.5 billion and $2 billion, with more than 200 networks, 900,000 displays and a 20% growth rate.

“About 40% of DOOH networks are completely revenue dependent and another 20% are partially revenue dependent, meaning that over 50% of DOOH networks, or upwards of $1 billion, are being funded by advertising,” High said.

Among the positive factors affecting revenues are:

• Hardware costs have been declining, while offering better quality and longer life;
• Software sophistication is increasing;
• There is considerable depth of expertise.

But on the negative side, he said:

• There is a lack of understanding of the variables driving DOOH revenues;
• There are inadequate or poor strategies;
• There is still a lot of thinking that ‘if you build it, they will come’.

“As you become more revenue dependent, the bigger the risk,” said High, who gave the audience dozens of questions to mull that can affect revenue such as: What do you want to quantify and qualify? Is the location quiet or noisy? Do you have a transient audience? Is there venue competition? Are there legislative restrictions?

“Keep in mind that landlords overvalue real estate,” he said. “And don’t forget to factor in equipment replacement, wear-and-tear, and changes in technology.”

Along with giving a great view of the variables affecting revenue, High said that the industry should strive for standardization as being promoted by the Digital Place-Based Advertising Association ^[5], as well as “research big time”, as also being pushed by the DPAA.