Outdoor Looks To The Age Of Electronic Billboards

For generations, outdoor advertising signs were created the old-fashioned way: They were hand-painted on location by dozens, even hundreds of artists in each market. Production was costly, with lead times of four to eight weeks. Ads generally stayed up for at least a year.

About 15 years ago, hand-painting was replaced by digital images printed on vinyl. Lead times were cut dramatically, and advertisers started buying space on billboards for periods as short as 30 days. Now, the spread of electronic outdoor signs is taking the medium through another sea change—to a time-sales-based medium in which advertisers can target different groups of people at different times of the day with messages that can be changed instantly via computer.

It won’t happen overnight, however. Some states, like Texas, have banned electronic signs, concerned that they’re too distracting.

Still, the medium’s buyers and sellers say outdoor’s future is electronic. “I call it the digital out-of-home revolution,” said Stephen Faso, director of new media for Outdoor Services, a unit of Interpublic Group. “It’s creating more space and inventory for clients with new formats on a more versatile, targeted, high-resolution canvas.”

It also has the potential to exponentially boost per-sign revenue for outdoor ad companies, said Sean Reilly, COO of Lamar Outdoor. Reilly said Lamar charges an advertiser $2,500 a month to be the sole customer on a traditional vinyl billboard on the main highway that passes through Baton Rouge, La. For an electronic sign in the same market, the price is $1,800, but the advertiser has to share it with 8-10 other clients.

But the new electronic signs—both the big highway bulletins and slightly smaller surface-street posters—are not cheap to deploy or advertise on. “These are for major advertisers that want to reach the entire market, not for the mom-and-pops giving directions to their store from Main Street,” said Stan Gier, general manager of Lamar Pittsburgh.

Clear Channel Outdoor, the nation’s biggest outdoor ad company, with about $2.7 billion in revenue, is launching its first full- market foray into electronic billboards later this month in Cleveland. Seven signs are being deployed that together will cover the market, said company CEO Paul Meyer.

Meyer said the current plan is to sell packages at $40,000 a month to seven advertisers that would get time on a rotating basis on all seven of the new signs. The ads would rotate every eight seconds. “We’re selling time instead of space,” said Meyer. “It’s a lot like a broadcasting sales model, without the consumer avoidance” such as channel zapping and mute buttons.

Some agency executives believe the model needs work. “I think digital will have a big play in the space, but I also believe that the best outdoor model is one where billboards are permed out to a single advertiser,” said David Matera, CEO of OOH Pitch, the outdoor buying arm for Publicis Groupe’s Optimedia. “When you have seven advertisers sharing a sign, I believe there’s real dilution in value,” he said.

Faso agreed that for many outdoor advertisers, locking up exclusive signage in certain locations is key to their marketing strategies. “But in some high-circulation areas like chokepoints on a busy highway, I don’t mind sharing, especially if I can keep the message fresh,” he said.

Viacom plans to unveil its first electronic bulletins in San Francisco in the fourth quarter, said Jodi Senese, evp of marketing at Viacom Outdoor. “Outdoor is probably the best medium for branding, awareness and frequency, but it could never deliver a changeable message for timely promotions until now,” Senese said. “Think about banks that can promote different interest rates or Starbucks adjusting a message to address different mind-sets, like a rush-hour crowd in need of a jolt versus a weekend crowd relaxing with a cup of coffee.”

Indeed, electronic signs allow advertisers literally to change ad copy at their desktop computers. That timeliness should allow the outdoor business to tap into an area—retail—that it has had a hard time cracking up until now, said Meyer. “If you’re a retailer running a big sale through the weekend, and Friday night you realize there are products you wish you could push harder, this is the only medium that can react to that kind of change,” he said.

Both Clear Channel and Viacom are playing catch-up to Lamar Outdoor in the display of electronic billboards in multiple markets. Over the past couple of years, Lamar has quietly deployed electronic outdoor bulletins and posters in about a dozen markets, including the launch last year of a 10-sign network in Pittsburgh that Lamar said has a daily effective circulation of 350,000, equivalent to the two daily papers in the market combined.

In Pittsburgh, Lamar has two long-term advertisers—Western Pennsylvania Toyota Dealers and P&C Bank.