Digital may be the future for media products – but is it a good idea for billboard signs? That’s a question that every billboard owner and builder wonders from time to time. Here are our thoughts on digital billboards at the moment.
Digital signs have a big price tag. They always have. It costs around $200,000 to put a digital sign face on a 14’ x 48’ structure. That’s as much as 400% more than the sign itself cost. When you install a LED sign face you have pretty much bet the total limit as to what a sign can cost. And with the greater investment comes much greater risk, as well as drag on your net income.
And they wear out
One big problem – that few people realize – is that LED sign faces wear out over a span of only around 10 years. So that huge investment is not permanent but rather temporary. Where that really hurts is that you will have to make sense of that $200,000 investment over an investment horizon of only around 10 years – not 30 years plus.
Hard to rent the ad space
Digital billboards are sold per second, not annually like a regular billboard sign. The standard digital ad is 8 seconds, and is shown at that frequency with six other advertisers every minute of the day, for a run of a prescribed length. This means that a digital billboard may have literally dozens of advertisers per month, as opposed to just one. And that’s a huge drain on sales time and pressure.
A normal billboard is rented one time per year with a vinyl advertisement placed up on the sign once or twice per year. Digital signs require constant management with dozens of advertisements needed to be created and made ready, and then the perpetual worry as to if the sign is operating properly. That does not even count the disaster when the LED breaks or there’s a weather emergency.
Finally, LED signs are not cheap to run. They use a huge amount of electricity with a 14’ x 48’ LED sign using an average of 162,902 kw hours per year, which is the same consumption as 15 single-family homes. In addition, you have potentially huge repair and maintenance exposure, sales cost, running the computer, etc. The bottom line is that LED takes the traditionally low operating cost of a standard billboard and then transforms it to a whole different level.
Digital billboards were an exciting technology when they came out, and remain state-of-the-art today. However, they do come with a huge amount of risk and cost and should not be taken lightly. Before you even think about transforming a billboard into a LED unit, give it very serious consideration.