Tips for new digital billboard operators (Commentary)

By Darrin Friskney, Watchfire Digital Outdoor

Traditional billboard advertising is dominated by a handful of major players, which is why the digital billboard industry is so interesting. While large outdoor companies are getting into digital, so are new investors who previously didn’t have any ties to the outdoor industry.

Despite this lack of experience, independent investors, for the most part, are quite successful.

For new investors in digital billboards, I’d like to offer some tips that I’ve assembled by watching other successful independent operators:

1. Location is paramount. As with all real estate, your first consideration should be location. Highly desirable locations include highways and busy streets, but you can still create a profitable board if these types of locations are not available. A billboard constructed at an intersection, where drivers can view messages while waiting for a traffic signal, can be as effective as one on a busier roadway.

2. Select an appropriate size board. The location of your billboard should drive size, pixel pitch and other considerations. If your location is surrounded by a lot of visual clutter, you’ll need a larger, taller billboard. If your location is on a secondary road with less frequent traffic or a low speed limit, you can make the sign lower to the ground and smaller. Billboards that are close to the road require a smaller pixel pitch for readability. Also, select a billboard size that is consistent with industry standards. Off-sized billboards can make your properties less attractive to a national advertiser because they require special artwork.

3. Select a quality board. Build your digital billboard business with longevity in mind. Using quality components now will save you a lot of headaches in the future and will make your properties more marketable should you ever need to sell. Drive around and look at other digital billboards to see which manufacturer’s boards look best.

4. Start financing discussions early. Obtaining financing for digital billboards often requires investors to educate the lender about digital outdoor advertising. Be prepared to provide a cash flow statement, a list of other operators in the area, construction quotes and all permits and lease documents. In addition, lenders will want to see sales plans, marketing materials and any pre-lease contracts.

5. Ask for help. Seek guidance from other operators, who often are happy to share their experiences. Assemble a team of professionals, including a real estate attorney and a structural engineer, to protect your interests.

One final piece of advice: have fun!

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