If there’s one trend that has defined traditional advertising during the last few years, it’s the growth of billboards and OOH media at the expense of television and similar marketing channels. According to Magna, the global OOH spend increased by 4.6% in 2018, whilst this was the only traditional advertising medium to grow during this 12-month period.
With further growth of 1.2% forecast for 2019, it’s clear that OOH and billboard advertising is becoming increasingly popular amongst SMEs and local businesses.
In this post, we’ll consider the various ways in which you can become a billboard owner in the current marketplace, whilst asking what to look for when leasing a billboard and liaising with existing networks.
Becoming a Billboard Owner – Your Main Options
Whilst investing in billboard advertising may seem like a no-brainer in the current marketplace, it’s important to select the right method of ownership as an entrepreneur.
Each of these approaches can provide business-owners with a profitable income stream, although they also create variable cost considerations and different challenges in terms of securing land and permission from the local authorities.
So, here’s a breakdown of the various methods of ownership and the things that you need to keep in mind when considering them:
Negotiating Directly with Landowners
This is one of the most challenging ways of becoming a billboard owner, not least because of the complexities of negotiating with landowners.
This process usually starts by performing an independent site appraisal as a business owner, at which stage you’ll present an offer that details the length of the lease, the recurring rental income and any capital repayment.
Of course, your offer and negotiation position will be based on a number of factors, including your budget and financial forecasts, the precise location of the site and the scope of the advertising space available.
As a general rule, landowners also use a basic formula when calculating their desired repayments, and you’ll need to factor this in when presenting your offer.
More specifically, they’ll take the projected net revenue from a site and multiply this by a range of between 15% and 20%, with the higher rate applied to locations that are highly visible and benefit from significantly high levels of footfall.
When it comes to the duration of your lease, it’s also important that you’re willing to compromise as an advertiser. The reason for this is simple; as whilst advertisers often want to negotiate a lease period of up to 40 years, landlords are often loath to offer anything in excess of 20 years.
In fact, most landowners will strive to negotiate a lease no longer than 10 years in length, and in this respect aiming for a contract of 20 years offers a compromise that can benefit both parties.
Regardless of the duration of your lease, however, it’s crucial that you pay attention to the smaller details of your agreement and take steps towards protecting your interests as an advertiser.
One of the key things is to ensure that the landowner won’t erect anything on the property that blocks the view of your billboard, whilst you should also make sure that you have the right of access to the structure for the purposes of maintenance and updating the advertisement.
Also, you should try to negotiate a clause that prevents the landlord from restricting the type of advertising placed on your billboard. After all, whilst a land-owner retains the right to ban offensive or inappropriate material from being published, it’s important that you have as much freedom as possible when promoting your venture.
Building Your Own Billboard
Building and erecting your own billboard from scratch is arguably even more challenging, particularly from a regulatory and legislative perspective.
The reason for this is simple; attempting to erect a billboard in a new and untested location requires you to apply for planning permission from the relevant local authority, and this remains a time-consuming and intricate process that offers no guarantee of success.
In truth, much depends on the intended location of your advert and the precise authority that you have to deal with.
For example, it’s often far easier to secure billboard locations in urban areas and busy city centers, as these destinations tend to feature a large number of established advertising networks and sites.
Conversely, planning permission is far harder to secure in rural areas, thanks to the growing opposition to construction in so-called ‘green belts’ and the work of pressure groups in driving increasingly stringent regulatory measures.
It can be even harder to secure planning permission to erect a roadside billboard, not least because the Highways Agency England is also required to consider any safety implications pertaining to a specific advert.
There are certain strict regulations in terms of the placement of roadside ads, as the Highways Agency must ensure that any published billboards are inherently safe and not overly distracting to drivers.
Ergonomics play a key role in this, as the authorities must take care to guarantee that the design and placement of a roadside advert doesn’t exceed the information processing capacity of human beings.
Of course, you can negate this challenge to some degree by identifying existing ad sites that are more than 10 years old. In this instance, such billboards may qualify for what’s known as deemed consent, meaning that you can focus on erecting your billboard and creating the messages that you want to display.
Buying a Billboard
We close with the option of buying a billboard, which usually requires you to secure existing advertising space through an agency.
This is arguably the most convenient and effective way of becoming a billboard owner, particularly as agencies already boast established advertising networks that encompass a number of high-traffic sites.
They also understand the concepts of deemed consent and planning permission, enabling them to guide you through the process of creating a compliant and effective advert.
In simple terms, this enables you to focus on the single most important element of your advertising campaign, as you look to appraise the value proposition provided by individual billboard sites and the number of people that they can help you to reach.
When buying billboard space, it’s imperative that you identify strategic locations within an existing network. After all, this will have a direct impact on the profitability of your billboard, as you look to balance the cost of advertising in high-traffic locations with the number of impressions and potential conversions that you’re brand is likely to achieve as a result.
In terms of optimising the profitability of buying billboard space, you may also want to consider traditional channels over digital alternatives. Not only are these types of billboards cheaper to secure, but they also offer significantly more exposure and don’t require you to share advertising space with other brands.
With these points in mind, buying existing billboard space can help to both reduce costs and optimise the profitability of each individual advert.
This is particularly important when including billboards as part of an integrated marketing campaign, as you look to minimise your spend where possible and avoid time-consuming negotiations or planning applications.
The Last Word
If you’re looking to leverage OOH media and billboards to promote your business in 2019, you can rest assured that you’re riding a popular wave in the current marketing climate.
As we can see, there are also a number of ways in which you can become a billboard owner, each of which has variable levels of complexity and creates different demands in terms of time and money.
Ultimately, the key is to choose a method of ownership that reflects both your budget and core commercial objectives, whilst also leveraging any experience that you have within the OOH sector.
In general terms, however, there’s no doubt that buying billboard space from an existing agency offers a far greater value proposition to small and local firms in the UK.