Billboard Mastery Podcast: Episode 87

All About Renting Non-lighted Signs

Some signs have lights and some signs don’t. But a non-lighted sign should not necessarily spell doom for getting it rented to a good-quality advertiser. In this Billboard Mastery podcast we’re going to drill down on the topic of non-lighted billboards and offer some productive tips to help you get them rented faster and for more money.

Episode 87: All About Renting Non-lighted Signs Transcript

Some billboards have lights and others don't, but that's not the end of the story when a sign does not have lights on it. This is Frank Rolfe of the Billboard Mastery Podcast. We're gonna talk about running and operating and renting ad space on non-lighted signs. Now, if you look back at books, you'll see the earliest signs out there, all of them didn't have lights, because to have lights, you'd have to have electricity nearby, and many of your signs back in the early days on rural roads and even bigger roads, there just weren't a whole lot of power poles back then around, so most signs were not lighted. So that was the early roots. It's not like they all started off with light fixtures on them. And then over time, they added lights to them, because as America grew and people became more active, they wanted to reach traffic at night on the roads because you wanted to direct them to your motel or direct them to your restaurant, so as a result, having lights on the sign became beneficial, and many advertisers were adamant they wanted to have lights on their sign, if you owned a early motel, it wouldn't do you much good, right, if there were no lights on the sign, 'cause when it got to be night time, you couldn't read the ad copy, and as we all know, in the winter it gets dark really, really early, so you wouldn't reach anything.

But the problem is that not all signs must have lights to be effective. Some advertisers, some billboard owners believe that without lights, their signs are somehow deficient and no longer attractive. But the truth is a huge percentage of billboards today still do not have light fixtures on them, and yet they still have advertisers. They operate just fine. So what are some of the things you need to know about renting the ad space on a sign that has no lights? Well, number one, remember that anywhere you are in America, other than perhaps Alaska, you have a whole lot of daylight each day, so what time does the sun come up? Oh, I don't know, maybe 7:00 AM, sun goes down maybe 7:00 PM. About half of the day, about 12 hours a day your sign is lighted and is lighted with sunlight. So a sign that has no lights doesn't mean it has no lights all the time. About half the time, it doesn't need lights. You've got those daylight hours. And also when you have a sign that is non-lighted, it's still going to reach people during the peak hours of the day in which they do things.

So most people in America get up at a certain time of the day, typically when the light is out, and they tend to stop all activities for the day and go home typically when it gets dark. So without lights, you're still reaching people at kind of the important part of the time when businesses can actually sell products. So once again, the non-lighted sign still is okay, because it's got lights when the customers are actually doing things. The difference you find between the non-lighted sign and the lighted sign really boils down to the product category you're talking about. Because a lot of businesses close at night, almost all your retail businesses are closed at night, and if they're open at all at night, it's just a little bit. The businesses that really, really need the lights out there are the businesses that sell a lot at night. So let's think about those for a minute. What are some businesses you can think of that sell a lot of product at night? Well, obviously, the number one is hotels and motels because they're mostly are a business about the night time because you sleep in the hotel, you don't sleep in the hotel during the day. You have to leave the hotel and check out typically 10:00 or 11:00 in the morning, so if you don't have lights on a hotel sign, that's a big hit. I think we would all agree with that. If you had a 24-hour restaurant, like an IHOP...

Okay, that's a problem, because most of the IHOP traffic comes in after hours. IHOP is typically not your number one dining destination, but if you want to go have bacon and eggs at 3:00 in the morning, it's probably the only place that's open. So those all night restaurants, they really need lights, so there's another one, or if you have a truck stop, a whole lot of truckers drive at night, so if they wouldn't know where the truck stop is or where they could get gas, wouldn't do you much good to be a truck stop if you had a sign that had no lights on it. So any business that is reliant on night time traffic, it really needs a lighted sign. So to try to stick them on your non-lighted sign, well, it's probably not gonna be an advertiser who's gonna renew very much, probably not gonna be totally happy with what they've done, probably gonna jump off your sign onto the first lighted sign they can find. But for all the other advertisers out there, and there's a ton of them, being on a lighted sign is not really essential.

Now, one thing you'll find when you're trying to rent a non-lighted sign is it's very much more helpful if all the other signs on the highway are in fact not lighted. So if you're on a rural road where there isn't any power, none of the signs are lighted, well, then having non-lighted signs is no big deal at all. But if you're on a major road and every other billboard on the entire street has lights on it, and you're non-lighted, that's a big hit, because it makes your sign look lesser important, makes your sign look not as effective as all of its peers, which are big and have those big beautiful lights on them. So when you're trying to sell a non-lighted sign in an area where the other signs are lighted, your key weapon revolves around just one item, and that's price. So how much do you have to rent a sign for with no lights versus a sign with lights? Well, if you look at most advertising contracts, you'll see that there's a provision, if the lights go out in the lighted sign, it reduces the value by 25%. So, those contracts would try and give the impression that a 25% reduction is the difference between the lighted and a non-lighted sign's value. But of course that's not really entirely true. The billboard company is trying to tell the advertiser that in the contract, because if they cashed them with the lights off, they only would have to give them a 25% discount.

But it's questionable that you can actually get someone to rent the sign at only 25% less between lighted and non-lighted. Among other issues, the lighted sign reaches traffic twice as long. It's lighted typically for the 12 hours that all the other signs have no lights, so you can read the lighted one twice as long or twice the amount of time as the non-lighted. So that would suggest a 50% discount. But then some would argue, well, but the traffic at night, it's not of any value to you because what's the point of the Arby's reaching that traffic at midnight when the Arby's is only open till, let's say, 8:00 PM. And again, that would be true. So once again, it really boils down to the type of advertiser that you're going to put on the sign. If it's a night-based business, if it's a hotel, it's a motel, if it's a 24-hour restaurant, if it's a truck stop or gas station, it's more probably than 50% decline if the thing has no lights because that's the most essential part of the day to them. But for all other businesses, you can try and get away with a reduction of 25% or 30% or 35%.

But that's the only way you're gonna get the advertiser to go on your non-lighted versus the lighted is through a price advantage, where they say to themselves, well, the sign's got no lights, but gosh darn it, it sure seems cheap. Maybe the other signs have lights, but this sign is cheaper still, and I don't really mind because I don't really do that much business at night anyway. Price is a strange thing because price can make almost anything attractive to people. You can have an old broken piece of junk in your yard and at the right price someone will probably buy it. Old, rusted bicycle, you want to sell it for $1? Probably some people would say, oh, for $1 it's gotta be at least worth $5 in scrap metal or maybe I could just take the wheel off it and sell that to a bike shop for $2. So with non-lighted signs, a lot of time it just revolves around price. But even if you can find somebody willing to pay that low price, it makes sense as a billboard owner to get renewal, and to get renewal, what you have to do is you have to involve advertisers who will get enough value that they wanna keep on that sign over and over.

So once again, if you have a non-lighted sign, try and steer towards advertisers where the absence of lights is not really a big deal. That way you'll have a win-win relationship with people who use the sign, like the sign or renew year after year. This is Frank Rolfe of the Billboard Mastery Podcast. I hope you enjoyed this. Talk to you again soon.