If you’re wondering what to do with your vacant land, owning and leasing a billboard may be the highly-profitable answer you’re looking for.
Billboards are one of the oldest and most ubiquitous forms of advertising. From storefronts to highways and everywhere else in between, billboards account for a huge share of out-of-home (OOH) media, spurred by businesses hungry to boost brand awareness and sales.
Lucky landowners who have just the right property stand to make a steady income with little-to-no overhead on their investment. The tricky part is finding the right lot, as billboards can only be erected and used on properties that meet the right zoning and permitted use requirements.
The other difficult part is learning the tricks of the trade. This is a closed industry, many of the billboard owners with the industry knowledge keep it locked tight.
Jonathan Weber, CEO of a web media company Marathon Studios Inc., sums it up by saying “this is a very closed industry, people who are in try to keep it to themselves.”
Advertisers love billboards because they provide a great means to get exposure for a brand or business. On a local level, it is an excellent way to capture “eyeballs” at mass scale, without breaking the bank on TV ads that may be costly.
Jayme Pretzloff, Director of Marketing for Wixon Jewelers, says billboards are a nice branding piece with a visual nature. “It’s not necessarily a direct (sales) driver, but builds strong name recognition.”
He says there are several factors to consider when choosing a billboard, including the demographic and and making sure the sign is not hidden by brush and viewable from the road. Mike Rice, Director of Integrated Marketing for EZ Solution, says, “the target neighborhood should match the target market.”
“While getting a billboard on a major highway will get you the most traffic, it may not be the most targeted to your audience because you will be getting a lot of tractor trailers and travelers along with commuters. For a home remodeling or local business, try to get a location near a target neighborhood to get to your target market. Getting a more targeted billboard like this instead of on a major highway will cost far less than the highway billboard, and get you better results in most cases.”
Jayme Pretzloff says, “it all comes down to location—will someone like me want to buy that space?” He adds with confidence, “right hand reads are the cream of the crop.”
Even though advertisers love billboards, they say negotiation is a key part of the process. A true industry CPM is about $2-6 (~$2-5K a month at a rough estimate), spec sheets from the traffic audit bureau help with the particulars across different geographic areas.
Advertisers may love billboards, but landowners love them even more. A standard, non-digital billboard costs about $10k to $15k to erect. Jonathan Weber says a two sided billboard can net up to $1,500-$2,000 a month at the lower end of revenue, and describes ownership as “extremely profitable.” Digital boards can pull in even higher premiums.
With little to no overhead after building the billboard itself, ownership is an excellent means for ROI. Owning a billboard trumps nearly every real estate investment in terms of the speed it takes to be “made whole.” What’s not to like?
The most difficult part about owning a billboard? Learning how to do it.
The majority of billboard owners are either mass media companies or private owners, often in the business for years and years, who protect the tricks of the trade. Few industries have as little public information available as billboard management, and most owners are reluctant to give any knowledge away.
Not only is knowledge closed, but Jonathan believes other owners can be vindictive as well. “If they have a bone to pick, they will come after you.”
The other big catch is that it’s very difficult to find land that has the right permissions to erect a billboard. Every county and every state is different, and zoning laws are often dense and difficult to understand, with many restrictions. Lots that are zoned for billboard use are few and far between, and it is rare to find such dream lots readily available. It takes a good bit of search just to find the right lots, and billboard owners often negotiate with current owners to erect a billboard on their lots.
“Be prepared to learn the terminology and the local area well. You usually need a legal document (and billboard application) to build on that property, and need a lawyer to help.” This will require you to download the township’s zoning laws, and find the right commercially or industrially zoned property. “Read through the zoning law well. Make sure the land is zoned for signs, and specifically for the type of signs you are putting up.”
“Find existing billboards that are neglected, or land that is already zoned and already permitted.” Jonathan suggests offering $1,000-$2,000 a year to a landowner who already has the right zoning designation.”
Most zoning departments don’t like to play nice with billboard owners, and some view billboards as commercial annoyances that don’t provide much benefit to a state or county.
There are challenges to making it work, but billboards can be a fast track to profits for savvy landowners.