Location is crucial for out-of-home (OOH) advertising, but have you ever wondered how you could…
Billboard advertising can be a smart investment for any business that aims to stay connected with loyal customers, introduce itself to new consumers, and enhance its brand awareness and visibility.
That said, traditional billboard ads don’t come cheap. Protecting your investment means estimating as closely as possible how a billboard campaign will perform before you sign a contract. And once you do sign, tracking ad performance can further ensure your investment doesn’t go to waste.
That’s where knowing how a billboard conversion rate works is handy. Conversion rates can help you choose the best location for your billboard and ensure optimal performance once it’s up and running.
Billboard Conversion Rate 101
One application for a billboard conversion rate is to assess the potential value of a given property. Knowing what a specific billboard location has to offer in terms of returning cash to your pocket can go a long way in deciding whether or not it’s the right place for your outdoor ad.
So, how do you determine a billboard conversion rate to estimate the value of specific billboard space? As you might expect, it involves a bit of math.
Billboard conversion rates are measured in impressions or views.
When learning how to calculate impressions, the number of impressions then gets plugged into a simple formula that converts it into a cost-per-mile CPM measurement, which indicates the cost of the billboard advertisement relative to every 1,000 views.
Essentially, this allows you to compare the cost of the billboard with its potential performance as measured in views and, in turn, determine whether the billboard advertising cost is right.
Using the formula, the cost of the billboard is divided by the number of views the billboard is expected to garner according to factors like:
- Billboard location
- Area traffic patterns
- Local demographics
Then, the dividend is multiplied by 1,000 to determine the CPM. Written out, the formula looks like this:
CPM = (cost of one unit of media program) / (size of media program audience) X 1,000
To see the formula in action, consider the following:
- A billboard costs $3,000
- It has 10,000 anticipated impressions
Following those numbers, the formula for finding the CPM in this scenario would be:
CPM = 3,000 / 10,000 = .3 X 1,000 = 300
In this example, the billboard costs $300 for every 1,000 impressions. It’s now up to you to decide whether the cost is advantageous regarding your outdoor advertising campaign and marketing strategy.
How To Use Billboard Conversion Rate to Track Ad Performance
Because billboards are such large investments, it’s important to track their actual performance amongst your target audience after you’ve purchased the space and launched your ad. For many advertisers in the billboard market, a billboard conversion rate is a convenient way of doing so.
Unlike CPM calculations, this method is more involved.
First, you must compartmentalize the conversions you gain solely from billboard impressions—that is, consumers who see the ad and follow the call to action, either immediately or later—from other conversion or marketing channels.
That said, the method you use to track billboard-specific conversions doesn’t need to be elaborate. It could be something as simple as including a unique tracker that you only use for your billboard campaign, such as:
- A special URL or email address
- A dedicated phone number
- A one-of-a-kind promotional code
From there, you can further compartmentalize your billboard conversions into two distinct traffic categories:
- Direct – These are converted consumers that directly enact the call to action, such as visiting the website or using the promotional code that’s listed on the billboard.
- Organic – The average consumer often has less than eight seconds to look at your ad, which may not be enough time to remember more than the name of your business. If they find your website by searching it, that’s considered organic traffic.
Differentiating between direct and organic traffic can enable you to use your billboard conversion rate to gauge the impact of your messaging and billboard design. For example, an overload of organic traffic could be a sign that your ad lacks the brevity and concision that billboards require.
From there, conversion rate software tools are usually your best bet for analyzing website data. The right program will be able to show you two important markers of billboard ad performance:
- The conversion rate, or the number of viewers who act on your ad
- The conversion volume, or the total number of conversions within a given period
Additionally, conversion volume can also reflect the financial value associated with conversions.
True Impact Media: The Easy Way to Buy OOH Media
From translating abstract impressions into hard numbers to tracking billboard viewers who become customers (either directly or organically), determining a billboard conversion rate can become complex.
Fortunately, the experts at True Impact Media are available to make the entire media buying process crystal clear.
When you entrust True Impact Media with planning, installing, and managing your OOH advertising campaign, you’ll have access to an innovative media buying platform, a dedicated and passionate team of OOH aficionados, the best OOH real estate in the country, and the piece of mind that comes with knowing it’s all being handled for you.
Contact us to make an impact today.
Electro-Mech Scoreboard Company. BIllboard Advertising: Cost Per Thousand Viewers. https://www.electro-mech.com/team-sports/advertising/billboard-advertising-cost-per-thousand-viewers/
EIC Agency. How Digital Billboard Advertising Increased Conversion Volume by over 100%. https://eic.agency/case_studies/digital-billboard-advertising/
Chron Small Business. Do Advertising Billboards Work? https://smallbusiness.chron.com/advertising-billboards-work-75826.html