Americans are moving in a big way from urban centers to suburban and exurban alternatives, and that’s putting more cars than ever on rural roads. In this Billboard Mastery podcast we’re going to review the concept of rural roads and how to make profitable investments in advertising on them. There’s money in every seismic shift of the U.S. population, and this is definitely a time to re-explore billboards that are a little farther out.
Episode 24: Harnessing The Power of Rural Roads Transcript
The COVID-19 pandemic has changed a lot of things in America, and one thing it has changed a lot is the patterns of the population of where it's going. Right now the way it's going, it's moving from urban markets to suburban and exurban markets, and it's putting a lot of power back into rural road billboards. This is Frank Rolfe, the Billboard Mastery Podcast. We're talking about how to make money with those good old fashioned wooden telephone poled signs out there along rural roads outside the big city limits.
Now, that's where most of the advertising world came from in the world of signs because at one time in American history there really weren't any urban markets. It was kind of all rural, kind of all agricultural back in the 1920s and 1930s. So as a result, most people who cut their teeth and got into the billboard business out in those more remote areas. All the big companies today all had their start from those old wooden telephone poled signs. So how can you get your start there? How can you take advantage of this new shift in America with people moving out of urban cores out into suburban and exurban markets?
First thing you have to do is you have to identify what the roads are in question. We all know the interstate highway system and of course there's always opportunities on the interstate highway system outside the city limits. But if you look there's also these state roads. Some of these state rods carry pretty good traffic. So a good starting spot would be to get your highway traffic map from your state highway department. This will show you all of the roads that are large enough to be studied by the state and what the traffic counts are. You'll find some of these rural roads are doing 24 hour traffic counts of 2,000, 5,000, 10,000 vehicles a day. That's a pretty good amount of traffic. So first thing you have to do is identify what those roads are.
Number two, you have to learn what the laws are on your state regarding rural areas. In cities, billboards typically have to build on commercially zoned tracks. In rural areas, there's a whole other set of rules. You have to have what's called an unzoned commercial. Unzoned commercial can be two businesses side by side in some states. It can be just one business in some states, but you need to find out what those rules are. Now you'll find rural roads can go through not only unzoned areas but also they can also cross into cities who have zoning. You want to study that road and where that road goes, and how far out the traffic goes that's worthwhile. Create some targets there.
Now obviously if you're going to succeed in the world of billboards it's all about selling ad space, and there need to be advertisers as well. Normally, fortunately there's a correlation between traffic and advertisers. Where there's lots of people going down the road you'll have lots of different people selling goods and services to all those consumers. But you want to get a good handle on where those sources of advertising are.
Let me give you examples of all those signs I built out in east Texas. So what happened was you have Dallas, then you have the loop around Dallas, there's LBJ Freeway, and then beyond that you have what are definitely suburbs and what are called exurbs, the next ring of cities beyond the suburb. There are many roads leading out of Dallas into these areas. Some are interstate highways, some just regular state highways. But in all cases you can see very clearly patterns of where you would want to be. What I did was I focused on all those small towns out there. Places like Forney and Kaufman, I knew all the towns and I studied who all the advertisers were, and exactly what was going on. So I knew there would be demand if I could just get signs out that way. So I learned what the Texas laws were as far as billboards go, and then I sought out those roads with sufficient traffic. Then I went out there and started looking for locations. Now, you'll find it's a lot less competitive when you get out into those rural areas. You'll go around and say, "Oh, there's a sign location there, there's another one there. Gee, I wonder why they haven't built them?" Well, that's because out in the rural areas since there are more available locations, you have to be a lot smarter about what you build. You're going to want to build locations that have great visibility, curve in the road is awesome when you have a head on curve in the road exposure, that's great stuff. You wouldn't want to build a billboard that's blocked by a bunch of trees or a bridge overpass. So you need to be more selective in your location from that regard.
Also, you've got to find land owners who will allow you to build a sign. Many farmers often won't let you build a sign because they frankly don't want to bother with it regarding their cattle or moving their tractor around when they plant their corn or whatever the case may be. So you want to have a very good number of targets. Then what you do is once you jump into that market, once you build that first sign, you go to all the advertisers, you'll start getting comments and questions from the advertisers saying things like, "Hey, you know what, I don't really need that sign, but I'd take a sign on this road coming into town." Or they'll say, "Yeah I'll take that sign but I want another sign coming from the other side of town. Can you get me a sign there?"
In fact, a lot of the signs I was building out in the rural areas were things that were by request, kind of like some musician who says, "Is there another request from the audience here?" I have some advertisers who tell me, "Yeah, I like that sign but I want one on each road coming into town. Can you do that?" Of course the problem is I have to rent the ad space going the other way too, so sometimes I would say, "I'd love to build you that sign, but I can't find anyone to rent the other side going out of town." In other cases I would build just a one sided sign if I could find the right opportunity. The bottom line is it's very much a different market when you do billboards out in those smaller towns, those smaller suburbs and exurbs. Suddenly all of the issues you have in urban markets of finding locations that can be tough, finding advertisers kind of aloof, all of that becomes very much broken down and life becomes a whole lot simpler.
Another part that's a lot simpler is just the kind of sign that you build. Out in rural areas you're typically building a sign made of wood. It's the most inexpensive type of sign. Wooden telephone poles, 2 x 4 stringers and plywood faces. So capital commitment to get into the sign business in the rural areas is far, far lower than it is in the city which is typically a big steel monopole or something similar, and I mean by a lot. It might be 10 or 20 times more per sign to build that big metal sign in city boundary than it is to build that sign out in that smaller rural area. That's again very attractive, because the rates of return therefore are much higher in the rural signs. Some people who could build signs in the city, they like just to do the rural anyway because they like the fact it's a lower price point going in. It just seems a lot more secure.
Remember that those rural signs don't rent for huge amounts of money, typically $200-300 a month. Signs in the city might go for 10 times that, but when you're only talking $200-300 a month, there's a whole lot more advertisers who can afford that who want that kind of advertising opportunity so it makes renting the ads so much easier, so much more consistent, much greater renewal rates, much better retention rates. It just makes life a whole lot happier and easier. In fact that's what a lot of rural America is all about is the fact it's lower stress. Same is true with billboards. Sometimes doing billboards in those smaller markets can be a whole lot lower stress on you, the billboard owner because it doesn't cost you as much, you don't feel like you have as much risk when you build them, and they rent so much more consistently. You can see people on rural signs who have been on that sign for 10 or 20 straight years, never coming off. They feel there's a very good balance between what they pay and what they get. As a result, they have no desire to ever leave that sign. You rarely see that in the big city.
Normally a one year commitment, maybe a couple years if you're lucky. But then they move on to some other form of advertising. In those rural markets you can go really long periods of time. Also, they're just so many more rural areas of America than cities. Look at your map. Look at that footprint of America, all 50 states. Look how tiny that little mass is of those big cities compared to that big old state. So when you have rural in your blood, looking for rural signs, you're going to find there's a whole lot more of those rural markets out there than there ever were of the urban. That also gives you great confidence. There's more opportunities for you to find the right sign to build, and to scale up your billboard company to something larger that meets whatever the scale is you need of income. It's really nothing wrong with rural.
Don't let people try to put you down when you do small town signs. There's a lot of guys out there who do small town signs and make a lot more money than those who do it in the big city. The bottom line to it all is we're in the middle of a mega trend right now in America. A whole lot of people coming out of COVID have now realized they don't like living in the city that much. They like the physical separation of being in a smaller town. They like the ability to perhaps make friends and find more inexpensive things and not go to restaurants, and not go to clubs, not do those kinds of behaviors. A lot of people are finding they like the suburban/exurban markets more as far as raising a family. They like the urban market when they were young and single but now it no longer works for them. Whatever the case may be, we're seeing a huge migration right now in America from people leaving the big cities, moving into suburbs, into exurbs, and that's putting all kind of pressure and opportunity on new things you can do with billboards using some very time proven traditional methods. This is Frank Rolfe, the Billboard Mastery Podcast. Hope you enjoyed this. Talk to you again soon.