Billboard Monthly

May 1st, 2016

Memo From Frank

I was on a road trip recently through an area of Kentucky that I had not been through in years. And I suddenly found myself searching for billboards to let me know what there was to see along the way. I ended up in Vienna, Illinois because I saw a billboard that promoted visiting their historic downtown. And that’s what billboards are all about – informing drivers as to what’s available at the next exit or next town. We’re all consumers of billboards when we drive, regardless of who we are, and that includes environmentalists. Groups like Scenic America are complete hypocrites when they are on the road themselves and need to find food or entertainment. Billboards let you know the information you need when you travel, and do so in an entertaining fashion. It’s hard to imagine a world without billboards. I’ve been to Vermont, where there are very few. It’s a disaster as a traveler, as you have no idea where anything is. Billboards definitely serve a purpose in our society, and have done so for over a hundred years.

How To Properly Negotiate A Ground Lease

Negotiate A Billboard Ground Lease

The first step in any billboard’s life is obtaining a ground lease. It’s an unusual art form that is never explained in any high school or college. But there is a definite method to successfully obtaining ground leases.

Be an expert

Landowners respond well to individuals that know what they’re talking about. If you take charge and exude confidence, this will make a property owner more likely to sign your lease. You have to earn that right, and that’s hard when you start out. So initially you may have to add a little Hollywood to your personality and act confident even if you are extremely nervous. But there’s one sure fire way to be come off as an expert: learn everything about the local billboard ground rents and market.

Have a consultative approach

Many people approach a negotiation with the incorrect assessment that there’s a clear winner and a clear loser. They see the land owner and the billboard owner as being on opposing teams. However, a better strategy is to be on the same team with the property owner. Think from their perspective, and imagine yourself in their role and how you’d want to be treated. A “consultative approach” means that you should act like you’re the property owner’s trusted employee, advising them on the best way to make money with a billboard. This approach disarms even the most grumpy owner, and improves your odds of success immensely.

Think win/win

Why does there have to be a winner and a loser in a transaction? The better idea is what’s called “win/win” negotiating – basically striving to make sure that both parties are winners. If you want to pay a ground rent of $200 per month, and they want $300 per month, the win/win solution might be that you pay $200 in the first five years (giving you time to learn about the market) and then $300 the next five years. Or maybe you trade paying that extra $100 per month for a term that’s ten years longer. If you approach every problem as though it can be amiably solved, it’s hard for a deal to derail.

Don’t be afraid of honesty

Most property owners react well to simple truths. They are uncomfortable with small talk and don’t like to waste time. When you first meet with the property owner, you should immediately launch into an explanation of “here’s where we want to put the sign” and then proceed straight to a review of the lease. Most property owners appreciate the direct approach.

Conclusion

There is a definite approach to negotiating a ground lease for a billboard. By taking a more creative approach, you’ll be able to break down the walls that separate the property owner and the billboard company, ands reach deals that are win/win for all parties.

When Is A Billboard Too Far Off The Road To Be Effective?

far left billboard

When you find a legal location for a billboard, you always want to tie it up with a ground lease and permit. But there are some sign locations that, even though they are legal to build, may be so difficult to see that they may not be possible to rent the ad space. One of the most frequent concerns is if the sign is too far off the road for the ad content to be legible or effective. So when is a billboard too far off the road?

At least 500’ of clear read

The average measure of a decent sign is having 500’ of visibility (also called “clear read”) for the viewer to absorb the advertisement. 500’ of read, at 55 mph, is about 5 seconds of visibility. That’s not a really long time to begin with, so any sign that has less than 5 seconds of visibility really dampens its attractiveness for an advertiser. A sign that is so far off the road that you can only see it for two seconds is going to have a really hard time getting leased.

Legible copy allows for enough words

Another issue for a sign that is very far off the road is the size of lettering that is required to make it legible. If you need to use copy that is 5’ tall, you will only be able to have two lines of copy and about four words and a logo. That’s OK if your advertiser just wants to put “McDonald’s Next Exit” on there, but if it’s much more it would render the ad impossible. This greatly limits what type of advertisers you can rent to, and their excitement about renting such a sign.

The “V” is extremely important

One thing that can save a sign that is too far off the road is the size of the “V” – the angle of the sign to the road so that you can have a longer visibility period before the sign is at a 90 degree angle to the viewer. The most effective “V” in these cases is where the sign is nearly parallel to the road – but that’s not economically feasible on most signs. If the sign is going to be one-side only, you should build the sign at an extreme angle for best results.

But can you convince the advertisers?

All of this is great in theory, but can you really convince the advertiser to rent the ad space in the real world? There are various factors that can affect the reality, including how many competing signs are nearby that have good exposure, how many advertisers there are in the market, and how important this road is to an advertiser. If you are in a market where even the signs with good reads are vacant, then you may be smart just to pass on this difficult location.

Conclusion

Not all signs should be built. Show caution on signs that are too far off the road. Remember that building a sign is only half the battle: you have to rent it to make it into an economic success.

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Clear Channel Is Working To Make Traffic That Goes By Billboards Trackable

Clear Channel has announced that it is working on a project to track customers using mobile phone location data. The program is called Clear Channel Outdoor Radar, and using the same technology that other industries use to track customers, only related to the billboard sector. Said Andy Stevens of Clear Channel “one weakness with billboards in the past is there’s been a lack of intelligence about who the campaigns are reaching. This gives a level of granularity advertisers are used to in other forms of technology”. However, consumer protection groups are declaring the concept “creepy and invasive”. To battle privacy concerns, Clear Channel is not tracking individuals, but only the macro flow of customers. The end result, if successful, should allow billboards to be marketed with the same consumer data as radio, television and other media types.

A Reader Shares A Sign That They Just Built

We received these photos from a reader who had just spent two days bringing this abandoned sign back to life. These type of signs can be among the most profitable of any billboard type. You can often find them in a form which only requires replacement of the ad face and installation of a vinyl or, in some extra lucky cases, all you have to do is put the vinyl on. As a result, you’ve eliminated the cost of building the entire structure, and that’s why these signs have such a giant return on investment.

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