Billboard Monthly

April 1st, 2016

Memo From Frank

My small town in Missouri has two billboards, one facing each direction, that reaches traffic on Interstate 55. It advertises our historic downtown area. The town pays about $500 per month for each billboard, and they reach about 30,000 viewers per day. The town recently voted again to renew the signs, which it does every year. So why do they always renew them? Well, let’s do the math. Those signs cost the town $30 per day for both combined. They reach 30,000 viewers per day. If only .0001 of that traffic decided to exit, that’s 3 people per day. If those 3 people spent a total of $20 for foot, souvenirs, museum admission – anything – that’s doubling the money invested. And .0001 is an incredibly low hurdle. It’s probably more like .001, which is 30 people per day. And that would make the billboard deliver a 20 for 1 return on investment. That’s what makes billboards so successful – they offer an outrageously attractive return on investment for the advertiser. Compare those same stats to radio, television, newspapers, etc. Billboards have always been the lowest cost advertising source in the U.S. And that low price opens doors that remain shut to other types of marketing.

Why Billboards Are So Easy To Do Well With

Bell Game

Have you ever noticed that some Midway games are so difficult to win? Have you ever seen anyone actually make the basket, or knock down the milk bottles? How about land the ring on the end of the bottle, or shoot the center out of the star? But then there’s easy games that everyone always wins at, like breaking the balloon with the dart. Billboards are more like those Midway games. But what makes it so easy to win with billboards?

Simple business model

First of all, billboards have an outrageously simple business model. It does not take a rocket scientist to figure out that you are basically renting land, building a sign, and renting out the ad space. Since the model is so easy, it’s also easy to become really, really good at it pretty quickly. Have you ever played a simple video game like “Pong”? Now compare that to “Call of Duty”. Simple things are easy to master and become an expert at. Complicated things take a huge amount of time to master – if you can master them at all.

Low competition

Another reason that billboards always win is that the competition is so low. How many people do you know that are in the billboard business? I have never met a billboard owner at school, church, parties – anywhere. Nobody knows about the business or has much interest in learning it. As a result, if you get involved in the billboard business, you’re one of very few that know anything about it. And that’s great because it keeps the competition low.

Plenty of demand

Billboards are one form of advertising that everybody wants. When you go out to the marketplace to rent a sign, all you are really doing is acting as a stockbroker to see who will pay the most for it. Because it’s a given that every business on that highway – and off the highway – wants to be on there. This makes renting ad space extremely easy if you know what you’re doing. I developed a ten step method to keep my billboards 100% occupied, and it works because of the high level of demand to begin with.

An established road map

One reason that success in billboards is easier than most things in life is that there is a pre-established road map of winning that was blazed decades ago. Billboards are not a new industry. It’s not like cell phones or websites, in which nobody knows what happens in the lifecycle of the product. Since the 1920’s, the business model of building and renting billboards along roadways has been in full swing. You don’t have to re-invent the wheel – you just have to follow what others have done.

Strong economics

Billboards have an outstanding economic formula. A wooden billboard can have a return level as high as 100% per year, and steel monopoles can do 20%+ consistently. This is a great platform, as even a sign that is an underperformer still will outstrip most any other competing investments. If your target is 50% return and you miss that mark by half, you’re still at 25%, which is phenomenal.


If you like to win, then you need to play games in which success is attainable. That’s the type of game the billboard business is. If you like to take risks and lose frequently, then you might try to shoot out the center of a star at the Midway. I’ve never seen anyone win that game in 50 years.

Abandoned Signs Can Be Great Opportunities

vacant billboard opportunity vacant monopole billboard opportunity

Do you see these type of items along the highway? If so, then you’re looking at some of the best money-making opportunities out there. There are probably higher rates of return on abandoned or forgotten billboards than any other type of investment out there. All you have to know is how to spot them, how to negotiate them, and how to bring them back to life.

Abandoned signs are pretty obvious if you just keep your eyes open

You can find abandoned billboards all around you. I can’t go on a road trip without seeing a dozen. Watch for signs that have no advertising faces, signs in which the ad is faded or torn, or signs that have an advertisement that is outdated (I once found an abandoned billboard with a circus ad for an event three years earlier). How can these still exist if they’re such a good opportunity? Basically because there are so few people who know anything about billboards or that you can make money with these things.

How to negotiate them

You first step is to contact the property owner. Say “I noticed that you’ve got an abandoned billboard on your property – can you tell me what you know about it?” They will then typically tell you the whole story of how it came to be built and why the billboard company ran off. Once you know the facts say “I’m interested in bringing that sign back to life. If I pay you $____ per month, will you let me take it over?” In many cases, the property owner will say “sure, that’s fine with me, but I don’t know much about it.” Then you write up a ground lease that stipulates that the property owner is giving you whatever rights he has in the sign structure in exchange for you paying him a certain amount of rent for a period of years (try for as long a term as you can – maybe 30 years if you can get away with it).

If the landowner is getting paid – even though the sign is abandoned – then contact the sign company

There are some strange situations out there. For example, I once bought some signs from Stuckey’s that they had been paying rent and permit renewal fees on for decades, even though there were no restaurants. It seems that they tore the restaurants down, but never shut the signs off. That kind of stuff can happen in big companies. You can typically buy these type of signs for around $1,000 to $2,000. But make sure to get the ground lease extended before you do so.

How to bring it back to life

In most cases, all the abandoned sign needs is a new plywood face and the vinyl advertisement. In other cases, you may need to upgrade the lighting or make minor structural repairs. But the key is to only bring back to life signs that are in overall good structural condition. Since you don’t really know anything about the engineering or who bought the sign, getting involved in signs that are of questionable design is out of the question.

Be ready for the unexpected and keep your risk low

When you deal in abandoned signs, weird things happen. Old sign owners suddenly show up and demand “get off my sign”. Or the city and state tells you that they think the permit has expired. Because of these risks, you don’t want to invest more in the sign than you can afford to lose. If you’re going to simply install a vinyl on the old plywood face, then that’s around $1,000. If the sign rents for $300 per month, then you are going to get your money back in about 4 months, so your risk is slight. But don’t put $10,000 into an abandoned sign unless you are 100% sure that the property owner is the true owner of the sign and the permits are 100% active.


Abandoned billboards are often a great opportunity. When you see them, write it down. Call the property owner and get the story. Don’t just let them sit there.

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Lamar’s Stock Is Up Ten Fold Since 2009

lamar billboard

Lamar Outdoor Advertising is a very interesting company. It was founded in 1902 by J.M. Coe and Charles W. Lamar, which makes it one of the oldest in the U.S. In 1908, the partnership was not going well, and they decided to dissolve their three-year partnership using a coin toss to divide their assets. Up for grabs were two assets: 1) The Pensacola Opera House and 2) The Pensacola Advertising Company. Charles W. Lamar lost the toss and was left with the less-lucrative poster company, which he renamed the Lamar Outdoor Advertising Company. That was a great stroke of fortune for him, as the Pensacola Opera House was destroyed by a hurricane in 1917. Lamar into one of the largest billboard companies in the world, with more than 325,000 displays in the United States, Canada and Puerto Rico. It also has the largest network of digital signs in the U.S., with over 2,400 LED displays.

What’s probably more interesting about Lamar these days is their gigantic stock price appreciation. If you bought a share of Lamar on March 6, 2009 it would have cost you $5.59. Today, around 7 years later, it’s priced at $61.50. That’s ten times more! In other words, if you’d bought $10,000 of their stock in 2009 and held it to today, it would be worth around $100,000. That’s a very impressive track record.

An Amazing Billboard From The 1920's

studebaker billboard

This billboard for Studebaker was found by a reader in Sevilla, Spain. It’s a fantastic glimpse into the golden age of outdoor advertising, in which the signs were all works of art. This sign is made of ceramic tiles, which is one reason it has endured nearly 100 years and still maintains great coloration. It’s a shame that modern billboards do not have nearly as much glamour or attention to detail as these old signs.

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