Billboard Monthly

One great part of the Holiday Season is the opportunity for personal contact with friends and family. All too often, in a modern America, we have substituted human contact for on-line shopping, texting, and postings on Facebook. And that’s a shame. We all need an outlet for social interaction. And in many ways, billboards offer the owner just that outlet. Between talking to property owners to build a sign on their property and advertisers to rent the billboard faces, outdoor advertising is definitely a great refuge for “people persons”. And on that note, we’d like to thank everyone who reads this newsletter, participates in our forum, and is a member of our circle of friends and acquaintances that advances the narrative of investing in the outdoor advertising industry. So let’s raise a glass of eggnog and toast the Holiday Season. We’re glad you’re a part of ours.

There’s a definite learning curve between the American public and the billboard industry. The average American has absolutely no clue as to the money that billboards can produce – or that there is a “billboard industry” at all. How is this possible?

Nobody knows how a billboard is built

Billboards come in four formats: 1) wooden telephone pole 2) steel I-beam 3) steel monopole and 4) vinyl wallscape. Steel signs require sophisticated engineering to make them stand up, while the others are so simplistic that any hobbyist could figure it out. Nevertheless, most Americans have absolutely ho idea what these four types of signs even are.

Nobody knows how much they cost to build

Wooden signs and vinyl wallscapes cost around $3,000 to $5,000 while steel signs cost around ten times more. But, just as they are ignorant on the types of signs, the typical American is also clueless regarding the costs of construction.

Nobody knows how much they rent for

This is one category where Americans are completely lost – what billboard signs actually rent for. They think it’s a few hundred dollars when the truth is that many signs rent for 10 times that much. And there are a few signs in some markets, such as Chicago, where the signs can rent for $10,000+ per month. The bottom line is that the rental figures are huge.

Nobody knows the profitability percentage on that rent

Virtually zero Americans know what the actual profit and loss statement looks like for a billboard. Signs have just a few cost centers: 1) ground rent 2) electricity 3) repair & maintenance 4) taxes 5) insurance 6) the cost to install the advertisements. All of these things combined equal about 40% of the revenue, so the profitability of most signs is around 60 cents on the dollar. That’s very high.

But they do pay attention to what goes on them

Despite their total lack of knowledge concerning billboards, the one item most Americans know is what billboards say. That’s because the American public is commuting back and forth to work an average of 30 minutes+ each way, and they pass literally hundreds of billboards as they go and have nothing else to look at.

Conclusion

Americans know less about billboards than almost any other part of U.S. culture. They are clueless on rents, prices and profitability. And that’s what creates the opportunity for those who do know.