The U.S. economy is well known for its cycles, from boom to bust and back again. Two quarters of negative GDP growth is the definition of a recession, and America officially entered that zone just a few days ago. Having successfully guided 300 billboards through the horrific Texas depression of 1987 to 1991, I am pretty well qualified to talk about how to successfully rent billboards during recessions. Here are some thoughts.
Focus on renewals – which means who will benefit the most
The best way to rent billboards during a recession is to not have to rent them at all. And they way to achieve that is by having a lot of renewals – situations in which the existing advertiser stays on the sign for a second, third (or infinity) term. To get renewals you have to find the right advertiser for the sign, and that means the ideal customer who will do so well with the sign that they will never want to get off.
It’s an investment, not an expense
In a recession most businesses are trying to cut costs, so trying to rent them a billboard may seem the exact opposite of what they’re trying to do. However, the key is to promote the sign as an “investment” and not an “expense”. Any billboard that can sell more of your advertiser’s product – and accounting for their profit margin – than it costs will be seen as a way to make money and not cost money. And a sign that fits that role will be renewed over and over as they literally become an extension of the business.
Create great creative so the advertiser makes money
There’s nothing worse than finding the right advertiser and then ruining it all with a lousy ad. It’s happened to me a thousand times, and typically the problem is the ad agency the client uses doesn’t have a clue how to make a billboard. They think a billboard is simply a print ad blown up really big, and don’t realize that a billboard read at 60 mph is a whole lot different than a page in a magazine read at 0 mph. Effective billboards need exciting graphics and few powerful words. If the advertiser gives you some bad ad design, you should push back on it and not just put it up on the sign.
Understand what types of advertisers “stick”
There are some basic industries that work on billboards and they hold that status for several reasons:
- Potential to sell either a lot of low margin items or a few high margin items. If the purpose of a billboard is to make money for the advertiser, then the profits it creates must outstrip the cost. A McDonald’s franchise, for example, can sell thousands of burgers at 50 cents profit a burger, and that can pay for a lot of billboard rent. Or a homebuilder can sell just one house in a year and feel the billboard was a big moneymaker. These type of businesses include 1) fast food 2) hotels/motels 3) restaurants 4) homebuilders 5) car dealers 6) apartment complexes 7) gas stations with convenience stores 8) truck stops and 9) amusement parks.
- Located near your billboard and preferably at the next exit. The most powerful words on any billboard are “Exit Now”. If you can direct all that traffic on the road or highway to your advertiser’s business at precisely the time they should exit then the sign will be hugely effective.
- Travel related businesses are particularly effective. In the list above you can see that many of the best advertisers on billboards are, in fact, travel related. Things like truck stops and hotels are reliant on reaching only those consumers within a short distance of their business, unlike a magazine ad that reaches people all over the place.
Conclusion
You can still rent billboards in recessions. They basically serve to sharpen your sales skills and strategies. Focus on the needs and profits of your customers and you’ll be fine.