Billboard Monthly

Memo From Frank

In this month in 1957 the “space race” began when Russia launched the first satellite into orbit, called Sputnik I. At just 184 pounds, Sputnik I still seemed impossible to gain the ability to hit a high enough elevation to circle the earth. From that crude start, only a decade later the U.S. had put a man on the moon and only decades after that have successfully landed robotic craft on other planets such as Mars. That’s how it goes with all human enterprise: first you get started and then you get really good at it. The same is true of building and renting billboards. I remember how difficult it seemed for me to find and build that first sign, yet in only a matter of months I was on a steady pace of adding a new sign to my portfolio every two weeks like clockwork. Part of that difficulty comes from not fully understanding the process and the other comes from not understanding how to make it efficient. But after a short while, you fully understand how all the pieces fit together and become an expert. So don’t let the awkward start hold you back. Acknowledge that everything new is difficult at the start, but afterwards it becomes much easier. Whether it’s space exploration or building billboards, those who are successful accept the early difficulties for the big rewards at the end.

Is This An Opportunity?

Here’s a sight you see frequently along America’s roads and highways. It’s a billboard with only one side on it. Why is that? And is there an opportunity to make money with these type of billboards?

Background

Not all billboards have two sides on them. The most common reasons are:

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• illboard was built by the advertiser, and they only built it to promote their business.
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• The billboard was built 50 years ago when ad rents were low and the sign company did not think the other side would bring enough rent to be worthwhile to finish out.
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• There was an obstruction when the sign was built and has since been removed.

Regardless of the reason, the fact that there’s only one side on the billboard creates an opportunity.

Is the structure adaptable?

But not all one-sided signs are created equal. Some structures allow for the installation of a second ad face, while others don’t. Most wooden structures can add a second side. But some I-beam or steel monopole signs do not have this opportunity, and it would be structurally impossible to do so. So the starting spot is to simply look at the sign and see if you can add that second side.

Is the permit there?

Some billboards have a permit that allows for a second side, simply because the sign is holding that right by being there at all. Some cities have that same allowance. But in some cities and states, they do not allow you to add a new advertising face based on the existing permit, so that will need to be carefully researched.

Are their advertisers in that direction?

Before you take the effort to add that second sign, make sure that there are sufficient advertisers to create demand for that ad space. If the sign face is pointed in the direction that has no advertisers for 200 miles in the desert, then it’s probably not worth the exercise.

Do the economics support it?

What will that additional ad space rent for? It needs to be enough to give a healthy return on the effort and risk of adding that second face to the sign structure. To add a second side to a sign will require – at a minimum – creating the structural frame to hold the vinyl, the addition of light fixtures (if the sign is to be lighted) and the necessary catwalks or safety equipment. It’s not just as simply as wrapping a vinyl over what’s there.

Will the current sign owner consider such an option?

There are two types of sign owners with single-faced billboards: 1) a business that built the sign to advertise their exit and 2) a billboard company. While it’s rare for a billboard company to allow a different individual to own half of their sign, it’s not at all uncommon for a business to allow it, since they could care less about the concept of renting ad space.

Conclusion

There are many opportunities in the billboard industry and one of these is simply to add additional sign faces to existing units. It’s a low-cost way to enter the sign industry and one that can be highly profitable.

How Building Even One Steel Monopole Billboard Can Change Your Life

This is a photo of the exciting moment when a steel monopole billboard is being constructed. Part of the excitement can be the positive impact on the life of the sign owner, who stands to have a positive boost to their personal economics. But what can that impact be?

Standard net income on a monopole structure

The average billboard ad rent on a monopole structure in the U.S. is around $1,000 per month. That gives the sign owner around $2,000 per month in total revenue, less a U.S. average of around 40% in expenses, yielding a net income of around $14,400 per year. To put that in perspective, that’s the same amount as the average American receives in annual social security payments – and it took them 40 years of hard work to earn that, rather than simply building a billboard.

Cost to build

The average cost of a monopoly billboard in the U.S. runs from $40,000 to $80,000. At a net income of around $14,400 per year, that equates to a very favorable rate of return of around 20% to 40%. You can often do even better than these numbers if you are a good shopper. Sometimes you can get better deals on monopole structures if you call around and see if there are any used ones laying in the yard or possibly units that people ordered but never picked up. I once built a monopole unit out of nothing but used parts for a total cost of under $20,000.

Upside

If you build a monopole unit in a good location, the ad rents typically increase over time, so the upside of renting your sign is created simply by the passage of time. If you assume the ad rents increase 10% each year, then they would double after only 7 years, and your net income would be nearly $30,000 per year.

The impact of this income stream

The bottom line is that a single monopole billboard can completely change your life. It can pay your kid’s college and then fund your retirement. It can cover the mortgage on a $200,000 house. It’s a significant amount of money from something as simple as a steel chassis with two ads on it that you only have to find an advertiser for once or twice per year.

Conclusion

You only need one monopole billboard to dramatically change your life. Opportunities for new billboards are in virtually every state. Isn’t it worth the time to educate yourself on this potential income stream and see if owning a billboard is the right thing for you?

The Ultimate Billboard Boot Camp

In Praise Of Road-Level Signs

One of the best billboard situations is when the roadway is at the same level as the sign. This gives the viewer the maximum time to read the ad message and it also makes the sign visually as giant as possible. These are memorable signs that rent at a premium. So what’s the story on these?

Why they’re so rare

Most billboards are 40’ above the road. This is required to get the ad message above obstructions such as power lines and trees. It’s also because most states have a minimum sign height of often 30’ off the ground. Obviously, this means that you can only read the ad message for a short time before it disappears out the top of your windshield.

How they happen

Road-level signs are typically the by-product of elevated roadways. If you have a stretch of highway that is 30’ off the ground, then the bottom of the sign will be equal to the top of the road. This keeps the sign well above obstructions such as power lines, trees and premise signs, while still being so close to the road that you feel like you could stick your arm out the car window and hit them.

Things to watch out for

The only disadvantage of this type of sign are situations in which the highway department does any improvements to the road that block the visibility, such as guardrail installation. The addition of a simple “exit now” sign can be catastrophic. So make sure that you have a handle on any future road amendments or possible build your sign a little higher to account for these threats.

Conclusion

Road-level signs are extremely desirable and you should also watch for opportunities to buy or build this type of unit. But do good due diligence to ensure it will not be blocked later.

A Primer On Placing Premise Signs On Non-Premise Signs

This is a photo of billboard sign with a premise sign for Walgreens (located beneath it) hanging from it. The concept of using the billboard structure to hold up a premise sign has been around for decades. So what are some of the things you should know?

Why the issue comes up

Many properties have limited space, and it makes sense, if possible, to put the sign for the property owner’s business on the same pole as the billboard. It also is very efficient from a cost standpoint. Finally, some cities only allow one sign structure per property, so you have to cram everything onto that one platform.

Installation types

There are basically three types of premise sign installations onto a monopole sign structure:

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• Welding the premise sign midway up the pole, so that the premise sign and billboard share the same pole but are adequately spaced apart.
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• Having the premise sign “hang” onto the catwalk of the sign structure.
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• Having the premise sign serve as the “skirting” of the billboard sign.

All three are relatively inexpensive.

What to watch out for

You need to be careful to ensure that the premise ad does not interfere with the billboard message, however. Many of your big-name advertisers (McDonald’s, Verizon, etc.) will not use a billboard that has another message in close proximity. That means that only the option in which you weld the premise sign message midway up the pole would suffice.

Conclusion

Using the billboard structure to hang the premise sign is an efficient idea theoretically, But make sure that the proximity of the premise sign to the ad message does not hurt your advertising value.

Billboards And Road Construction: Things You Should Know

There’s nothing more depressing than having your billboard temporarily obstructed by highway construction. At the same time, new highway additions can often bring even greater value to the sign in terms of higher traffic. So what should you know?

Consult with your city, county and state work-book on road projects

Highway work is carefully followed by the department of transportation, which has books you can buy that describe every project and at which stage it is in. The typical stages are 1) discussion 2) engineering 3) purchase of right-of-way 4) bidding and 5) construction. There’s no mystery involved – it’s all publicly available if you simply ask for it.

Potential impact on visibility

The impact of development on the sign’s value can be either temporary or permanent. Barricades are only there for a short while, but a concrete barrier is permanent. Make sure you understand the future plans for the roadway and that they are not crippling, such as the change of a highway from two-way to one-way.

Potential impact on advertisers

Sometimes the road construction is not pertaining to the billboard but the exit in which the advertisers are located. This is much more difficult to monitor because you can’t be an expert on the entire length of the highway. The good news is that these type of construction projects (bridges, exits) are always temporary in nature.

Be reasonable

If there is a construction impact on the sign or the advertisers, then a temporary reduction in rent may be necessary. The sign owner should always be reasonable in their approach so that both parties have a win/win relationship.

Conclusion

Road construction can be a hassle, but it’s also a blessing when new improvements yield more traffic and more viewership. Just make sure that you always stay on top of pending disruption and are in control of your future.