Billboard Mastery Podcast: Episode 40

Making Money Simply Through A Better Use Of Space

Some billboards are focused and efficient and profit is maximized. But others are a terrible waste of space. In this Billboard Mastery podcast, we’re going to review the many ways to simply find billboards with poor utilization, take control of them, and profit from the inefficiency.

Episode 40: Making Money Simply Through A Better Use Of Space Transcript

Underutilized is defined as not being used enough. That's maybe a little over simplistic. To me, it's more than just not being used enough, it's not being used in its most maximum form. This is Frank Rolfe, the Billboard Mastery podcast. We're gonna talk about billboards that are underutilized and how you can make money from observation and harnessing the power of that underutilization and bringing it up to a full market renting potential. Let's start off with abandoned signs. Now whenever you drive by a sign that has just been let go, it has no ad on it or an ad that's all torn and faded with time, maybe a political ad from five years ago, that sign is definitely underutilized 'cause it's bringing in no revenue at all.

If you can find the owner of that sign, if you can buy that sign, if you can lease that sign from the existing owner for next to nothing and then go out and rent it to a real paying advertiser, that's a great way to make money from something that is absolutely underutilized. I think we would all agree that a sign that's there with all that cost spent in building it and it's sitting there with no advertiser on it, that is the most significant form of underutilization. So whenever you see those opportunities, those are opportunities. Whenever you see a sign that's sitting there with no advertiser on it, you wanna jump on that sign because there's definitely money in that. Then you've got the sign that has an ad on it, but it's got a second side that's not utilized at all.

Maybe when they built the sign, they never thought of putting the second face on it, or in other times there was a second face on it, but they just let it go. Maybe in some cases it blew off in a wind storm. You see that frequently where you've got someone who built the sign for one specific use, let's say, for a Holiday Inn, and they only put the sign and the ad up in the direction of the Holiday Inn, but the other side, they didn't care at all. So kind of like the first example of the sign that has no ad on the sign whatsoever. In this case, it's a working billboard. It's got revenue, but it only has half the revenue that it could typically have. So what do you do there?

Go to the person who owns the sign to see if you can sub-lease that underutilized side and then go out and find an advertiser for it. If you play your cards right, you may be able to get that abandoned sign for next to nothing because what do they care? They only built the sign for the one directional sign. They don't really care about the other. They might be perfectly fine to rent it to you at an insanely small monthly amount, maybe $50 a month, and then maybe you can put the ad back on that side and rent that for $500 a month. There's a third kind, and that is when you have a major obstruction, which blocks the sign. I'll give you the perfect example of that. It was a landmark concept for somebody that was an incredible coup. It was a billboard on a very, very busy road where the ad rents were extremely high, I think like $4000 a month ad rent, but the sign had been abandoned because of a tree obstruction.

So they went to the person who had abandoned the sign and said, "Hi, I wanna buy the sign," and the person said, "Well, no. I don't know if I really wanna sell it because I'm hoping one day I can do something with it, but it was never gonna happen. That tree just wiped to sign out." So they said, "Oh, come on. Let me sub-lease it from you." So in the end, they went in there and they sub-leased the sign with the tree block, each for $500 a month, and then they went to the person who had the tree on their property, and they paid that person another $500 a month to chop the tree down. And now with a total expense of $1000 a month, they rented the sign at for $5000 a month. So basically off that one sign, they were pocketing about $4000 a month in revenue, less those two $500 a month commitments they had made, sheer genius.

When you see obstructions on signs, you can sometimes go in and get a hold of that sign, take control of that sign for a very low amount because everyone's lost hope. They don't think it has a whole lot of value, and then all you have to do is remove the obstruction. I did that on a sign in downtown Dallas once. It had a sign right smack in the middle of the billboard, and it was just for advertising for you to come and park your car in the parking lot beneath the sign. It basically just said, "Park here," as I recall. I was able to get the billboard for next to nothing. It seemed to be worthless. Who would ever rent a sign with another sign in front of it that said, "Park here?" But I went to the guy with the parking lot before I had even bought the sign and said, "What would it take for me to have you lower that sign down?" And he said, "Well, if you'd pay to lower it, I'd be happy to lower it because although it blocks the billboard in one direction, the billboard blocks it in the other. I'd like to have my sign lower than the billboard."

It was a win-win for everybody. The parking lot owner was happy, and I was happy because I obtained that sign for next to nothing, and then with the obstruction fixed, I was able to rent it for a whole lot more money. Another type of under-utilization is when you have a premise sign along the highway, advertising a business which no longer exists or advertising a business that's so very far away that that sign is of very, very little importance. I once bought a whole lot of signs from Stuckey's because the Stuckey's that owned the signs that advertised Stuckey's, the Stuckey's didn't exist anymore. The Stuckey's had been gone for a long time, yet the signs were still there. All the ground rents had been paid. All the licenses had been paid.

When you spot these things, when you spot a premise sign advertising a business that you no longer see, what's happened is there's been a disconnect. It's kind of like one end of the snake doesn't know what the other end is doing. So the sign is still there. They're still paying the rent, but there's no business to advertise on the sign. Sure, Stuckey's is a great example, but I see the same thing frequently going down the road for other businesses. I'll see a motel that is shut down, never to re-open, but there are still signs advertising the motel or the fast food that's gone out of business. And again, all I see there are opportunities. You can go in and go to the person who's got that premise sign, which is now of no value to them whatsoever, buy it from them or sub-lease it from them and then rent it out to a higher-paying customer.

Finally, you see signs frequently that have very low-paying advertisers in areas that are worthy of much, much better. When you have a billboard on a highway and down from that billboard, there's an interchange with a lot of potentially high-paying advertisers like McDonald's and maybe a hotel, but instead, it's just advertising some goofy thing like 300 miles into the future is a drive-through wildlife park, what's happened here is whoever owns that sign or rents that to that advertiser has no idea about all the new progress, all the new development on the road. Someone is completely asleep at the wheel. What you would do then is go to whoever owns that sign, has got that advertiser and see if somehow you could again sub-lease the sign when that contract ends and then go out and rent it to one of those higher-paying advertisers.

If you look across America, when you drive around, you'll frequently see these anomalies of signs that are stuck in the past. They've had the same advertiser on them for 20 or 30 years, and they don't even know how things have changed. When I had my billboards out there in East Texas, they opened a whole series of casinos at Shreveport Louisiana, but apparently no one had bothered to notice. People were still advertising little, rinky-dink, Western ware stores when they could be renting those signs to things like Harrah's Casino. I noticed the change. I was more than happy to go in and take over every sign I could find and rent it out to the casinos and all the supporting businesses. But always watch for these things because what happens is, life is always changing. New things are being developed. New things evolve, and often those are higher-paying advertisers.

The bottom line to it is every underutilized sign you see along every road and highway in America is a chance to make money, every single one. And you can make a lot of money simply by having the thought of being the middleman that ushers into the progress of the new higher-paying advertiser on what is currently not being used enough. This is Frank Rolfe for Billboard Mastery podcast. I hope you enjoyed this. Talk to you again soon.