Billboard Monthly

September, 1st 2013

Memo From Frank

The best way to approach billboards is to think of them as giant salesman. In order to get paid, they have to sell more of the advertiser’s product than they cost. Just like a salesman, they get paid monthly, and they normally stop selling and go to sleep about 8 hours a day when the lights turn off at midnight. In order for the salesman to sell, he’s got to have a good sales pitch – the advertisement – and reach the right clientele passing on the highway. If you work it right, the billboard proves its worth, and the giant salesman has lifetime employment. But the most important thing to remember is that every billboard must make more money than it costs. Work hard at matching the salesman to the correct product line, and making sure that the sales pitch is compelling. Don’t let your salesman down. You hold the key to making your “salesman” the next Zig Ziglar.

The Benefits Of Local Advertisers Over National Ones

Somebody recently said to me “have you noticed that all the rural billboards are full, but the city ones are empty?” Well, I noticed that fact about 30 years ago, and built my billboard company around it. What this person is seeing is not the difference between rural and urban billboards, but the difference between national and local advertisers.

Local advertisers are easier to find than national advertisers

I learned, on my first billboard, the difference between these two types of advertisers. Prior to trying to rent billboard ad space, I assumed that you could simply call up McDonald’s home office and say “OK, I’ve got this billboard to rent” and they’d jump all over it. I found out, however, that national advertisers are almost impossible to rent to. After about fifty rejections by the big advertising agencies that represent these national accounts, I realized the error of my ways, and re-focused on local advertisers. I found them to be easy to reach, interested in what I had, and willing to sign a contract. There are a 1,000 local advertisers for every one national. Every business that is near the billboard has the potential to be an “exit now” client. You can probably only think of 20 national brands that might be players, in contrast.

Local advertisers renew most of the time while national advertisers don’t

Local advertisers are able to gauge the impact of their billboard, and realize the contribution to their business. As a result, a successful billboard – like a successful salesman – has lifetime employment. I averaged 80% renewal rates at my billboard company, which was comprised almost exclusively of local advertisers. That’s not to say that they are pushovers. If the sign is not productive, they will tell you immediately. However, they are very loyal to billboards that perform, almost thinking of them as extensions of their business. National advertisers, on the other hand, never even know your name or where the sign is exactly, and have no interest in repeat business. They run their ad campaign for the new McChicken sandwich, for example, and when that run is over, there is zero possibility for renewal until they need you again. They have no tangible evidence that any sign worked on the micro level, only macro level sales statistics to see if the campaign worked.

Local advertisers are negotiable, national advertisers aren’t

Any reluctance by the local advertiser in renewing is often overcome with a price concession, over the phone. National advertisers could care less. The decision has been made from the top and “they are just carrying out orders”. Even if you offered the sign to them for $1, they would refuse. That’s because you can’t ever talk to the decision maker on the national level. However, you can reach the decision maker on the local advertiser in one call or drop by.

Local advertisers sign longer leases than national advertisers

Local advertisers are willing to make big commitments – they really need the billboard to work for them and are willing to take some risk. I’ve signed hundreds of multi-year leases and one year is the norm. With the national advertisers, however, they favor 6-month agreements. That makes it at least two times as hard to rent a billboard with a national advertiser as it is with a local advertiser.

Local advertisers are more profitable, when you take vacancy into consideration

From my experiences with national and local advertisers, there is one thing that I think many a billboard owner has come to figure out: $500 per month from the local advertiser for 12 months is infinitely better than $1,000 per month from the national advertiser for 6 months and then 6 months vacant. Why? Because you have to factor in the time and expense of re-renting the space, as well as the trauma your banker will have driving by a blank sign. Renewal is a very powerful tool, as it saves you from a ton of time and trouble to re-rent the space. If you fill your billboards with local advertisers who renew continuously, you can theoretically almost get out of the ad sales business, except when you build a new sign. That’s a great position to be in!


Sure, national advertisers pay higher rents than local advertisers in most cases. However, when you take into account the ease of sales, the potential for renewal, the reduced vacancy and the ability to build a life-long partnership with a local advertiser, the local is always the better choice in my book.

A Billboard Story

When I built my first billboard, I was so proud and fascinated with it, that I’d drive by it every day. On my first date with my wife, I took her out to look at the billboard. I would stop down the highway and stare at it from my car, while eating a McDonald’s hamburger. I virtually memorized every other ad on the highway, and could tell if the lights had just come on by the brightness of their glow. Sure, it was weird. Sure, it probably freaked the people at McDonald’s out that somebody was stalking a billboard. But I’ve just always like the billboard business. As I built more billboards, I didn’t have the time to visit that first sign as much. When I got to 300 billboards, I didn’t go by it at all anymore. But I sure remember those good times at McDonald’s, staring at my first sign.

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