Billboard signs are pretty much the only form of advertising that does not have to provide content. So why is that a big deal? In this episode we discuss why having a captive audience is much more attractive than having to capture their attention. And much more profitable.
Episode 16: The Beauty of Not Providing Content Transcript
Wikipedia defines information as content. So what is content? What is that information? It's what gets you to read that magazine, read that newspaper, watch that television show, check out that website.
Thankfully, billboards don't require any of it. This is Frank Rolfe of the Billboard Mastery Podcast. We're going to be talking about why, thank heavens, billboards don't require content or content to at least make you look at the billboard.
Let's imagine, for example, that you owned a magazine. You wanted to sell advertising space in your magazine. But no one's going to read your magazine and, as a result, no one's going to look at the ads unless you provide content in that magazine for them to read.
We have to have stories to put in the magazine. We'll have to hire writers to write the stories. We'll have to hire an editor to review those stories, and also come up with the stories to begin with. And of course, we'll have to hire a photographer to take the pictures to also put in the magazine. As you see, we're rapidly staffing up with various people and various labor cost, salaries, healthcare, all those kinds of items. It gets pretty expensive.
Let's say you have a television channel, same story. You've got to have someone to come up with the ideas, what will be on television today. You're going to have to have someone to write the materials, someone to go ahead and talk about the material on the air. And you got to have a cameramen and it racks up again pretty steeply.
If we really look at it, most people who sell advertising, they had a lot of upfront costs to create the content to make you read whatever it is enough to even see the ads. Kind of scary, kind of risky having to put all that money on the front end to create the content without even knowing if anyone will read it or anyone will buy the advertising on it.
Billboards, on the other hand, they don't have to provide content. Now, how do we get away with that? How come billboards don't have to provide content? That's because our viewership is stuck. They have no other choice. It's a captive audience. All they can basically do is they can either elect to look straight ahead at the road or to look at the billboard. But they're bored. There's nothing else to look at.
The average commute in America is roughly about 30 minutes each way, one hour a day on the road with nothing to do, nothing to entertain. So what do those drivers do? Well, they look at the billboards, of course. It gives them at least some pleasure, some entertainment while they're sitting there in traffic. But the important thing is that the billboard company does not have to provide anything, not an iota, not a salary, not a person, not a news story to get the driver to look at the sign.
Now let's look at that from a profitability standpoint for a moment. When you own a billboard and you rent the ad space, you have to pay a few things. You have to pay the ground rent for the ad space, typically 15 to 20% of revenue. You may have to pay the cost of production of the advertisement, but that's not a whole lot. Maybe some electricity, a little bit of insurance, a little bit of repair and maintenance, a little bit of taxes, but you're escaping the biggest portion, cost of every other form of advertising, and that is the content.
That's one item you don't have to worry about. Why? Because the highway is creating the captive audience and provides the content. Your viewership can go up, even if you don't provide any meaningful articles, or great writing, or great photographs, or great camera work, simply because the traffic increases on the highway.
Highways have grown in stature as far as traffic has to unbelievable levels. There's highways in America that used to do 10 or 20,000 cars a day. Now they're up in the 250,000 cars a day variety. All that additional viewership, all this additional eyes on the ad without one shred of content provided by the sign company. That's a fantastic position to be in.
You better believe all those other media groups out there, all those television, newspaper, cable channels, they so envy the billboard owner because a billboard under doesn't have to worry about any of that stuff. They don't make any money on it, bear in mind. All that work that they do to craft those stories to get you to watch, to gain viewership, it's only there to sell you the ads. No one's paying for the content itself. So basically, it's a big albatross around their neck that they have to continually write, edit and create for no other reason than to sell that ad space. But with a billboard, you don't have to do any of it. You sell the ad space simply because people are a captive audience to your sign.
Then flipping that around for a minute, that's also why billboards are so effective because you don't have to compete with any other content. When you have an ad in the newspaper, what do you see when you open a newspaper? You see just a flurry of information, sensory overload. Just in one page of a newspaper we might have 14 ads and the stories and the photographs. It's easy to get lost in all that.
How many people actually see your ad? You may have a circulation on that newspaper of 500,000 readers. How many of those actually ever even see the ad and how many read the ad? How could they? They're drowning in content?
The sign, however, has no competing content. When you look at a billboard, what do you see? You basically only see a few billboards, trees, buildings, maybe some cars, maybe some waterfront if you're in an area that's got a lake, or a river, or an ocean, but that's all you see, but nothing to really take the viewership away from the sign. That's another very important point to advertisers is the fact that your ad sits there solo, completely focused. You don't have to compete with any other extraneous noise of any other content in the publication.
One more item that makes billboards unique equally better, but at no cost to the owner of the sign. That is the fact that it is a point of purchase advertising tool. If I put on that sign, McDonald's Exit Now, no newspaper, no television ad, no radio ad could possibly replicate that because they can't possibly time the ad when you're driving by the McDonald's exit. Only you can do it.
Another unique feature of billboards is the fact that they're the only form of advertising that can actually physically direct people to your business. Newspaper can't. Internet can't. Nothing else can do it.
The bottom line is the billboard industry is strengthened. It's made most attractive by its unique feature that it doesn't have to produce content. What makes it so different from the other medias is what makes it so special and so much more profitable.
You don't have to host big staffs, big office buildings, health insurance. All the things that go with running those big media empires, you escape all of it because you don't have to provide anything to make someone look at the ad. People look at the ad because it's a captive audience driving down the road, and not because you've got some great photographs or great articles to convey. Again, the fact that you don't have that again makes your sign even more valuable because there's nothing to compete with it. Then you throw in the directional point of purchase aspect, and that's why advertisers love billboards.
This is Frank Rolfe with Billboard Mastery Podcast. Hope you enjoyed this. Talk to you again soon.