When I first got into the billboard business I was always searching for areas that had plentiful billboard locations to examine. And then I found a small town in a very desirable area that only had one legal billboard location and I realized that having a complete monopoly was not a bad idea, either. I have learned that the tougher the billboard laws, the better for sign owners. Why is that?
The simple laws of supply and demand
This first reason is pretty obvious. The fewer the number of billboards in any area, the more they will rent for and the more valuable they will be as a result. Additionally, in areas with fewer sign locations, the fewer advertisers you need to get them all full. I once had a billboard that was a part of a line of 60 identical units. When it went vacant, I was calling advertisers saying “my sign is the 23rd vacant one on the left” – pretty hopeless, right?
I’d rather be a big fish in a small pond
When you have tight restrictions on signs and very few available, it opens doors to even bigger advertisers – even national ones – that would typically be beyond your reach. And these bigger players pay bigger dollars. I once rented a 10’ x 40’ billboard for $1,200 per month to a national advertising agency – that’s six times what I had budgeted when I built it. Due to a small supply, when this big agency needed a billboard for a client, I was the only game in town.
The more desirable the area the fewer the legal locations
It’s a simple fact that most of the best areas do not have many sign locations. It makes logical sense as more expensive neighborhoods have little commercially zoned land and they are extremely concerned about their aesthetics. If you can get a foothold into these type of areas you will be overrun with advertisers wanting to reach these high-demographic shoppers. Even if zoning will only allow smaller and shorter signs, the demand will still make that location a winner.
When it comes to building a buying a successful billboard, areas that have low levels of supply are typically superior as investment locations. Don’t be disappointed when a city has difficult sign laws – it’s that difficulty that creates the value.