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If you’re looking for a way to generate passive income, maybe you’ve considered owning a billboard. After all, billboard advertising is in high demand, and if you own a good space you may be able to make a long-term profit by leasing it to different outdoor advertisers. But you might be asking yourself one important question:
How much does it cost to own a billboard?
To answer that, we need to break it down into more detail. How much is it to own a billboard? And how much do billboards make anyway? Only by addressing all of these questions can you judge whether a billboard rental is a smart investment, so let’s dig in and try to find out.
How Profitable Is Owning a Billboard?
Owning a billboard must be profitable or no one would do it, right? The answer is both yes and no. You can make a sizeable amount of money leasing out billboard ad space, but how much you can charge will vary quite a bit based on where your billboard location is:1
- Billboard spaces in Los Angeles range from $1,000 to $10,000 per month for a simple physical billboard. Prices are higher for digital billboards. Read more on how much are billboards in Los Angeles before committing to this investment.
- Billboard spaces in Cedar Rapids, Iowa range from $550 to $4,000 per month for physical billboards.
- What about Times Square in New York City? Billboard rentals there can range from $10,000 to $22,000 for two weeks due to the high level of visibility and incredibly high demand.2
After seeing those numbers, you may be further compelled to purchase a billboard of your own. Let’s take a look at what that process looks like next.
Purchasing a Billboard
So, how do you buy a billboard and who owns billboards? As an individual buyer, you may find you have an uphill battle. Many billboards in the highest-trafficked locations are owned by large vendors such as:3
- Clear Channel Outdoor
- Lamar Advertising
- Intersection
- Outfront Media
- JCDecaux
These large companies will likely be equipped with more money to offer upfront and will be able to compete for the best billboard ad spaces. However, that doesn’t mean there aren’t billboards available that you can purchase. In theory, anyone can own a billboard, it’s just a matter of finding one in your price range. It may be easiest to look for options in more rural areas where there will be less competition to purchase. Just keep certain factors in mind that may affect your profitability such as:
- Billboard Location – Even though you probably won’t be buying in the highest-traffic areas, you still want to find a location where people will see your billboard. Billboard advertising is in high demand, but no one will pay to lease a billboard that won’t be seen.
- Upkeep – The age of the existing billboard, the materials that were used to build it, and even weather can play a role in how much upkeep your billboard will need. This can eat into your potential profits, but neglecting it will make your billboard less desirable.
- Competition – How many other billboards are around? Advertisers may not want to lease from you if they’ll be competing with many other billboards for people’s attention.
All these factors will also play into what the purchase price for your billboard will be. The bottom line? Prices vary greatly but you should expect to pay at least hundreds of thousands of dollars—or potentially multiple millions— to buy an existing billboard in a good area.4
Building a Billboard
Because purchasing a billboard can be quite expensive, maybe one solution you’ve considered is to build one yourself. You can build on land you already own or you could lease land and build there. There are considerations, however, for this approach too:
- Regulations – You can’t just build a billboard anywhere. The Highway Beautification Act of 1965 has strict guidelines about billboards near highways. There are also state and local regulations you’ll have to deal with in more rural areas.5
- Materials – Even a simple, one-sided wooden billboard could cost thousands to erect. Move to steel and you’ll be looking at spending even more. A digital billboard could bring the bill up to over a million dollars in initial building costs.
- Size – The larger the billboard the larger the upfront cost. However, that will also mean you can charge more when leasing it out.
Costs of Specific Types of Billboards
When considering billboard advertising cost, it’s essential to differentiate between various billboard types. Digital billboard advertising, for example, may incur higher initial expenses due to the advanced LED billboard technology required, but it offers dynamic content changes and better engagement with any potential customer. In contrast, traditional billboard costs are generally lower, making them accessible for smaller budgets. The billboard size also plays a crucial role in determining the billboard advertisement cost. Larger billboards typically command premium rates due to their increased visibility and impact on brand awareness. Electronic billboards, a subset of digital billboards, similarly vary in price based on their location, size, and the complexity of their design.
Pros and Cons of Billboard Advertising
Billboard advertising, including OOH advertising and mobile billboards, presents a mixed bag of advantages and disadvantages. On the pro side, billboards, especially larger ones, are highly effective at increasing brand awareness and reaching a broad audience of potential customers. Digital and LED billboard options offer the added benefit of flexibility in advertising content, suitable for time-sensitive promotions. However, the main cons include the higher advertising costs associated with premium locations and advanced billboard types. Additionally, on occasion the impact of billboard advertising or a billboard campaign can be difficult to measure precisely.
Costs of Billboards by Industry
The cost of billboard advertising can vary significantly by industry, influenced by competition for prime locations and the target audience’s demographics. Industries with higher average customer lifetime values, such as automotive or real estate, might find the investment in digital posters and electronic billboards justifiable for attracting a potential customer. In contrast, industries focusing on immediate consumer goods might prefer traditional OOH campaigns or mobile billboards for their cost effectiveness and wider reach. It’s also crucial to consider the design aspect; a compelling billboard design can significantly enhance campaign effectiveness, regardless of industry, but may require additional investment.
Navigate Billboard Costs with True Impact Media
How much to purchase a billboard? As you’ve seen by now, the answer to that question is a complicated one. The best way to figure out if outdoor advertising is right for you is to talk to an expert. At True Impact Media, our team will be happy to help you figure out your next steps and go over your options, including likely costs in your area.
The best investments are ones you feel confident about because you have all the information you need. At True Impact Media, we’ll help you get that information so you can embark on an outdoor advertising campaign that will maximize your return on investment.
Sources:
- Fit Small Business. How Much Does a Billboard Cost? Pricing & Advertising Tips. https://fitsmallbusiness.com/how-much-does-billboard-advertising-cost/
- Indeed. How Much Does a Billboard Cost (and Is It Worth It)? https://www.indeed.com/hire/c/info/how-much-does-a-billboard-cost
- Dash Two. Can Anyone Buy Billboard Space? How? https://dashtwo.com/can-anyone-buy-billboard-space-how/
- Movia. How Much Does a Billboard Cost to Own? https://movia.media/moving-billboard-blog/how-much-does-a-billboard-cost-to-own/
- RLT Finance. Owning Billboards For Passive Income: A Beginner’s Guide. https://roadlesstraveledfinance.com/owning-billboards-for-passive-income/
