Memo From Frank
The Invasion of Normandy – also known as D-Day – began in June, 1944. It was the largest single event in world history, as far as the number of men involved. The strategy involved was staggering, and pushed the envelope as far as tying together a huge number of operations into a single day. While your billboard effort may not be as large as D-Day, it should still have the same level of planning and coordination. Before you even begin to look for legal billboard locations, or signs to buy, you should have a strategy in place to work smart and efficiently. The greatest billboard empires began with a strong sense of planning. Focusing on fertile areas with usable sign ordinances is a key component, as is learning the laws and being able to quickly spot potential sign locations that meet them. There is an old adage “act like a man of thought and think like a man of action”. Action without planning is never a good idea. D-Day was a success because it included a huge amount of strategy. Your billboard efforts should follow suit.
The Successful Use Of Burma-Shave Tactics
Back in 1926, the Burma Shave Corporation began erecting unique billboards along the nation’s highways. Instead of a single message on one sign, they built multiple messages that – once combined – gave the message. This was such a unique marketing gimmick that “Burma Shave” became the standard term to describe this advertising ploy. But what made it so effective?
The concept of “bunching”
Burma Shave was the first American advertiser to take advantage of the marketing concept called “bunching”. “Bunching” is a theory that having a viewer see repetitive ads rapid fire makes them more memorable. You see this on TV all the time, where there will be two identical commercials back to back. The very shock of seeing the same thing twice makes you remember the ad much more. This is a standard feature of marketing today, but was unheard of in the era of Burma-shave.
People are naturally fascinated with billboards that ask a question on one sign and then answer it on another. They also love riddles and sayings that require you to read the next sign down. People would read the Burma-Shave advertisements simply because they were eager to finish the riddle. There is a similar series of billboard for the University of Missouri on I-70 that has single words like “spirit” that culminate in “Mizzou” on the final sign. Very effective stuff.
Sending a lengthy message
Sometimes the advertiser’s message is simply too long to be contained on just one billboard, and requires a series to make it work. For example, a successful Burma-Shave structure for a car dealers that carries many different brands would be to have similar ads for Ford, the Chrysler, then Chevrolet and then the name of the Autoplex and location. You can break down more complicated businesses into this concept and it leads to a better billboard performance.
But don’t use too many words
One of the strengths of Burma-Shave was the use of only a few words per sign. Don’t think that writing a short story on the signs is a good idea. Try to keep the total number of words down to 5 to 7, and keep the letters huge. You can’t read that many words traveling at 55 mph, so don’t push the envelope. Keep copy huge and simple.
Or get too complicated
You should also steer clear of messages that are too hard to understand or figure out. Motorists like simple things – they are too busy with the complicated task of driving. Be more kindergarten than intellectual. Remember the old adage “KISS = Keep It Simple Stupid”. Don’t be on a mission to make messages that are so sophisticated that nobody can figure them out.
Burma-Shave was a pioneer in some marketing gimmicks that are common place today, but completely radical in the 1920’s. These signs were so effective and popular that the original sign program went on for four decades – probably the oldest continual billboard design in American history. It kept going because it was highly effective, and still works for advertisers the world over.
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You don’t have to go back a hundred years to find classic billboard moments. Volkswagen was a pioneer in classic billboard designs back in the 1960s. Using catchy slogans and creative copy, they were able to grow sales enormously with almost a cult-like following. You could spot a Volkswagen billboard from a mile away – even before you could read the copy. These classic billboards today resemble works of art. Although most people think of the 1920s to 1940s as the Golden Age of billboard design, great billboard designs were still happening two decades later.
How To Make Money With Abandoned 8-Sheets
Most investors think “big” when they think of billboard signs. But there’s also big money in the smallest standardized size, known as the “8-sheet”. These signs, constructed predominantly in urban areas and fronting simple surface streets, can often be purchased for as little as $500 from sign companies that abandoned them when tobacco advertising was removed from the billboard advertiser pool. So how do you do it?
Find the property owners
The first step in getting an 8-sheet is to contact the owner of the land where the abandoned unit resides. Most of these signs have been sitting there with no land rent paid for decades, and the property owner can tell you the whole story of the sign and if they have been given title in lieu of rent. To find the property owner, all you have to do is get the property address and find the owner via the tax assessor’s website. Send them an initial letter telling them that you are interested in bringing the sign back to life, and take it from there.
Buy them cheap
The typical cost of old, used 8-sheets ranges from free to $1,000. Often the property owner will let you take over the sign at no cost, if you start paying ground rent. It’s a very low-cost way to get into the billboard business. You are basically acquiring billboard units at far less than the cost of construction.
Find the right advertisers
8-sheets are typically located in urban environments, often blighted. But that does not mean that there is a shortage of potential advertisers. Attorneys, doctors, community colleges – and hundreds of other business types – are interested in reaching this audience. You simply have to work diligently to find the right grouping of potential candidates. Often the best way to do so is to start out with a direct-mail piece to the advertisers in the zip code the sign is located in, and then see who responds.
Before the invention of vinyl, 8-sheet advertisements were installed like wallpaper – that’s where the name “8-sheet” came from, as they required 8 sheets of ad wallpaper. Vinyl wrapping is not only much easier and long-lasting, but it also makes the ad size significantly larger, as much of the 8-sheet was the “border” that went around the ad itself.
One interesting strategy with 8-sheets is to create a market-centric plan to rotate advertisements among a number of locations every 60 days. This will increase the value of your advertisement, as advertisers will reach a much larger number of customers than simply with a static sign on a single unit.
It’s all about volume
The average 8-sheet rents for around $200 per month per face, and the only operating cost is the ground rent (typically $83 per month or $1,000 per year) and another $20 per month for vinyl installation (the advertiser pays for the ad printing). That means that the normal 8-sheet can earn roughly $3,000 per year in net income. That means 10 signs can make you $30,000 per year. And 30 can make you $90,000 per year.
8-sheets can make great billboard investments, at a very affordable price. There is probably no way to create significant income at anywhere near this small a level of cost.
How To Rent Signs In Extremely Weak Markets
There is never an excuse to have a blank sign. There is a perfect advertiser for every billboard – but it’s up to you to find them and convince them to sign up. So how do you find the right advertiser in an extremely weak market?
Lower the price to a more compelling number – don’t hold firm
Before you begin to market the sign, the key question is “how low can I price this sign and still meet my obligations?” In a weak market, holding firm at impossibly high rents is suicide. You can always raise the rent later when the market returns. But what’s important right now is getting an advertiser up on that sign and re-starting your cash flow.
No ad rent amount should be considered “firm”. Everything needs to be negotiable 24/7. Encourage advertisers to make offers, not just say “I can’t afford it”. When they say things like that say “what could you afford?” Every discussion should be with the attitude of “make me an offer”. Sometimes you will be amazed at how little a discount the advertiser really wants.
The best approach in a weak market is to “break out of the box” and try new things. Nothing is worse for a weak market than stale thinking. You know things are bad out there – so how can you make them good again? Think of radical advertising ideas for advertisers like offering a sweepstakes or making fun of the current recession.
Many a sign has been rented in soft markets using an approach called “combo”. What you do is find two advertisers who share a common exit, and rent them each half the sign with the common exit line across the bottom. Basically it’s a 50% rent reduction as far as they are concerned, and sometimes the combo can be more powerful than the stand-alone ad, such as a “combo” of a gas station and a fast food restaurant.
Explore the potential of coops
Some products offer an incentive system to promote their brands, such as Justin that often pays 50% of any western wear store billboard as long as the Justin logo and boot is pictured. You also find these arrangements typically for auto parts stores and pet supply stores – but many different product types are available. If the advertiser is able to get the billboard at 50% off, that’s a total win.
Check into “barter exchanges”
For some vacant signs and markets, another possibility is to simply trade the sign for “barter units”. These units can then be used to buy products or services that you need. For example, if you had a vacant billboard that rents for $1,000, you could trade it for 1,000 barter units and use those to get your car fixed. But make sure that the barter exchange has things you would actually wanted, and has been in business a long time, so you don’t up with worthless barter units.
Talk to the property owner about a trade for ground rent
Another concept to consider on a vacant sign in a weak market is to exchange the ad space to the landowner in lieu of ground rent. I once had a vacant sign that I exchanged to the owner of an apartment complex that owned the land where the billboard was located. He traded $1,000 per month of land rent for the sign, and it was a win/win for both parties. He liked it so much that the trade never ended, and he’s still on the sign to this day – 20 years later.
Be persistent and never give up
One of the key attributes of successful ad sales in a tough market is persistence – the ability to never let rejection stop you from trying once again. What all top billboard owners have in common is the ability to never give up until the correct advertiser is found. Look at your job as finding the right advertiser for every billboard – and one that will do so well with the sign that they will renew for decades. You are essentially helping these businesses prosper, not just trying to collect rent.
Weak markets should never stop a billboard from being rented. If you use your street smarts, are creative and persistent, and never stop searching for the right advertiser despite initial setbacks, you can always find the right advertiser for every sign.
Have you ever seen a sign like this one?
If you’ve driven anywhere around the United States chances are you’ve seen a sign like this one. I see them everywhere. Granted, I’m specifically looking for signs like these but the fact is there’s a ton of signs out there just like this one. About 6 months ago I started driving past this sign daily. I didn’t think much of it at first; I had a lot of things going on. As time went by and another panel fell off I thought…… I gotta figure out what’s going on with that sign. The first thing I did was get out of my vehicle to inspect the sign and see if it had a permit tag or not. It didn’t have a permit tag. I wondered is this a billboard or is it an illegal sign???? I didn’t know. I wasn’t from the area. I didn’t know how long the sign had been there or anything about it. A few weeks went by and I didn’t think about the sign unless I was driving past it. One night I was doing some research and realized that the sign was inside the city. This may seem insignificant but to the seasoned billboard veteran it’s a huge distinction. Billboard rules inside cities are totally different than the rules outside cities. Furthermore, I thought this sign is probably at least 30 years old. It may be 50-60 years old or even older. The point is when this sign was built it didn’t need a permit so it would be classified as a non-conforming sign and probably wouldn’t need a permit plate. This isn’t a universal rule but it’s reality in many cases. After realizing all this a few more weeks went by. I kept driving past the sign every day. One night I finally decided I’m going to get that sign. I found out who the property owner was and knocked on the door the next day. They literally lived right behind the sign, which often is the case. No one was home. I came back the next day. No one was home. Finally, I stopped on a Saturday and I caught the owner. It was literally like this guy had been waiting for me to stop and talk to him for 20 years. We sat and talked for 3 hours and I walked out with a management agreement to manage his sign. This sign will rent for $400-$500 per month. Recently, I was approached by a private equity firm wanting to purchase my signs and to my disbelief they were willing to pay 6x for management signs. That means every $100/month you make on management signs is worth approximately $7,200 in the eyes of this private equity firm. It took me less than an hour to do the research, less than an hour to knock on the guys door, and 3 hours to get the deal done
It took me about two hours to fix the sign and install the available vinyl. So for seven hours of work, ahhhh common really the only work I did was the two hours to fix up the sign. For two hours of work I’m going to make thousands of dollars per year and probably make that same amount for many years into the future. That’s the great thing about billboards. Once you do the initial up front work there’s not much to do but go to your mailbox and cash the checks. I’m always on the lookout for other businesses that could be as good as billboards in this respect. I’ve yet to find one with residual cash flow potential like the billboard business. Maybe Mobile home parks and storage facilities, but you can’t get into those businesses for $300. That’s what it took me to do this deal. A couple hundred for an available vinyl and a hundred for gripper rod and straps. I run into people all the time that ask “is that a good business??? There’s a lot of empty billboards”. My reply is “I have 500 billboards over 400 of them are filled up.” People always ask me “how many empty billboards do you have” instead of how many billboards do you have filled. One other great thing about billboards is if you structure your business and your deals right they don’t really cost you much when they’re empty. The overhead is stupid low especially if you work on them yourself like I do. I find that people who hate on my industry are usually people that wouldn’t know their head from their ass when it comes to finances or making money or they are the privileged few that haven’t ever had to work a real day in their life. Next time you see a sign like this give it a whirl!!!! Try to find the property owner and figure out what the deal is with that sign. Anyone can do this business if you manage signs. You can literally be living in poverty and become a millionaire within 5-10 years if you do nothing but manage signs. The problem for most people reading this article is they don’t want to give up their 8 hours a day of TV watching time. The problem for the others is your going to let the people around you beat you down and tell you “you can’t do it!!! That’s ridiculous!!! Why would you even try that???? You should just sit here at the bar with us!!! Don’t waste your time on that!!!” My advice is if your planning on starting a billboard business keep your plans and your dreams to yourself. People in this world love to beat you down. It’s a mean world. THE FACT IS ANYONE CAN DO THIS BUSINESS. I’m not a smart person. I work hard. That’s all it takes. No one can take my hard work away from me. That is what America is and always has been about. Your ancestors came here because they would be judged by their work not who they were. It doesn’t matter who you are, where your from, what color you are, what your family has or doesn’t have. In the United States if you work hard and are persistent you can find people that will respect that. Don’t let the haters beat you down. Quit sitting around watching TV!!! Start your business today. If your willing to work harder than the next guy there are literally opportunities everywhere!
By Adam Schober
The Importance Of Building Billboards Ahead Of The Market: And How To Do It
This is how Detroit looked around 1750. The population then was about 300, and today it’s 4,302,000. True success in building a billboard portfolio often involves constructing signs at low land rents and then letting the city build up around you, increasing ad rents significantly while keeping costs low. So how do you engage in this most profitable plan of action?
Understand the direction of growth
If your goal is to build signs ahead of future development, you must first figure out what direction that future growth is going to take. In Dallas, for example, that direction has been east and north for the past half century. How would you know that? If you simply mapped out where the Walmarts are located, and tied in where the Highway Department’s future roads are being built (a copy of the book is available at almost every state Highway Department central office) you can easily the path, just as I did back in the 1980s. It’s just as hard to build signs in the future path of expansion as in the wrong side of town, so there’s no excuse not to do the work to figure out where the growth is going.
Build the structure that will be valuable in the future
If the goal is to build for the future, then you should also consider the type of sign structure that will be most valuable years from now. That means that you should stick with the standardized configurations that the largest billboard companies use (as that’s who you will be trying to sell to some day). The standard sign sizes are 12’ x 24’, 10’6” x 36’ and 14’ x 48’. If you build signs that do not meet these dimensions, the value of your holdings will diminish as most giant companies like to standardize their equipment – and so do advertisers so they only need one design.
Long term leases are essential
Since land rent is based on ad revenues, if you think that the area is going to explode in the years ahead, you want to lock on to low ground rents now, while you can. Shoot for 30 years leases with annual renewals thereafter, so you can have huge profit margins as the area grows. The perfect example is the company that opened the first motel and restaurant inside Yellowstone National Park. They knew the tourist spot would be huge someday, so they made their lease insanely long (like 100 years with the right to renew) and today make nearly $100 million per year of profit simply because they locked their lease payment on what it was in 1920.
Watch the rent comps carefully
In areas of rapid growth, advertising rents can change virtually overnight. That’s why it’s essential that you constantly monitor your competitors rates to watch for opportunities to boost your own. I once had a billboard at a $300 rent that rose to $1,200 per month within four years. That’s the type of movement that you have to harness. Don’t know your competitors’ rents right now? Then you need that data immediately.
One of the most successful billboard strategies has always been to build signs ahead of the growth of the market. To do this, however, you have to be able to figure out the direction of growth, create long term leases that lock on low land rents, build the right size sign, and to monitor local ad rents. When you can do these steps successfully, you will not believe how much profit you can make.
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