There are few income streams more passive than owning a billboard. In this Billboard Mastery podcast we’re going to explore how you can make outdoor signs into your own version of “mailbox money” as well as strategies to get started.
Episode 134: Why Signs Are As Close To "Mailbox Money" As You'll Ever Find Transcript
There's an old expression about an income stream that comes to you passively without a lot of effort, and it's called mailbox money. This is Frank Rolfe with the Billboard Mastery Podcast. We're gonna talk about why billboards may be the closest to mailbox money that you will ever find in the real world. Now, mailbox money alludes to the idea of a check literally coming into your mailbox every month that is like manna from heaven because you didn't have to really do a whole lot of active work to get that check. If you have a day job, you know that you go to work, you work eight hours a day, five days a week. And every two weeks you get a paycheck. But that's not really mailbox money because you knew the cause and result of you getting that check and it required effort, getting up, going to work, doing things, hitting certain templates of goals. But mailbox money is something you can just rely on that this date every month, bam, there it is in your mailbox. And most everyone wants mailbox money. That's living the dream is mailbox money.
When you retire, Social Security is effectively mailbox money. You don't have to operate the government, you don't have to write the check. You just have to be 62 years old or older, and there you go. On the same day every month, there is a check. But now billboards, when it comes to things other than Social Security, are one of your best shots at regular mailbox money. And let me explain why that is. It's the actual nature, the way the business model works. Because when you have a billboard, you typically rent the ad space for long periods of time. The average is a year, but sometimes you can go longer. I've had billboards where the initial lease was for three years in length. And most people never accept deals that are shorter than six months. So the way the advertising metric is, it's long-term. If you look at all the other forms of advertising like a newspaper or radio, those are for like one day. Or one insertion in the newspaper.
But they're typically not residual like billboards are. So the first part about constructing a mailbox money concept is that you only have to rent that ad space once a year. Let's use that as an example. And at the same time, once you get that ad up on that sign, you don't really do anything. The billboard does. You're just like the agent for the billboard. The billboard's like a big old salesman on the highway who's telling all the cars on the highway, oh yeah, at that next exit, there's a McDonald's. But you don't do that. You don't stand out there on the highway. The billboard does. Yet you still get the residual of the billboard's labor every month. So you don't take that active a role in the billboard producing its service to the advertiser. Now, that doesn't mean you can't go out and check the billboard periodically to make sure that the lights are working. That maybe you should go out and check on it if you see on the news there was a horrible storm in the area.
But by and large, you don't really put in the hours to do anything. You just sit back and the advertiser pays you every month, not because you did anything, but simply because you own the billboard. It's almost like a feudal right. So when you mix the two, something where you don't have to put out a lot of effort on with the fact that the advertiser pays you every month just because the contracts are long-term in nature, that's pretty close to mailbox money. In fact, that's about as close from any of the different options you can do out there as far as having money that comes in outside of Social Security is a billboard. Now, the beauty of mailbox money, though, expands even beyond the rapidity of the confidence of it coming in, Which is that when you have a business model that doesn't require a lot of direct involvement, it gives you the ability to expand it much more easily. Because if I don't have to put in any effort on one sign.
What stops me from building and owning 10 signs and still putting in basically no effort? And now instead of one check of mailbox money coming in, I have 10. And of course, if you think about it, once you're at 10, well, there's nothing holding you back to getting from 50 or 100 of them. So the ability to scale the billboard industry is one of the huge benefits of the fact that the income is fairly passive in nature. And that's really neat because that allows you to just keep building on your success with more and more signs. But another thing that needs to be acknowledged is many, many advertisers renew every single time on those same billboards. So it's not like you're out there beating the streets once a year to find the advertiser. Often, that same advertiser will renew year after year after year. I had years in which the renewal rate was 80%. So that means out of 300 billboards that I had, I only had to rent ad space on 60 of them each year.
And the other 240 would just automatically renew. So when you're out looking for advertisers for your signs, try and be the matchmaker who finds the correct advertiser for that sign. It's typically a business that's down the street that you can say the words exit now on, those typically are the most successful. And look for the name brands that are well-heeled with good amounts of money in the bank, things like McDonald's, Burger King, those name brands. Because that way you know that mailbox money won't cease. They're going to go ahead and continually pay you. The bottom line is if you're looking for the new year at an income stream that is dependable and passive and just arrives every month, there's probably no concept you can come up with better than a billboard. This is Frank Rolfe, with the Billboard Mastery Podcast. Hope you enjoyed this. Talk to you again soon.