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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

The signs are changing


An auto advertisement is shown on a digital billboard in Cleveland. Digital billboards resemble ballpark jumbo video displays but scroll through several static ads each minute. 
 (Associated Press / The Spokesman-Review)
Associated Press The Spokesman-Review

SIOUX FALLS, S.D. — They’re large, rectangular and target consumers from high above the nation’s roadways, but these are not your father’s billboards.

Digital billboards, which resemble ballpark jumbo video displays but scroll through several static ads each minute, are helping to draw advertisers back to the outdoor medium as one of the world’s oldest forms of marketing is undergoing a renaissance.

The computer-controlled LED displays allow advertisers to change their message as often as they’d like, unlike their vinyl predecessors, said Christopher Ensley, an analyst at Bear, Stearns & Co. in New York.

“I think that’s what kind of changing the way outdoor is being used by advertisers,” Ensley said.

Bill Ripp, director of Lamar Outdoor Advertising’s digital billboard business, said the flexibility allows companies to place messages such as “sale ends tomorrow” or highlight specific prices that can be changed at any time.

“Billboards have traditionally been a reminder business,” he said. “We do branding and ‘turn left at this intersection’ sort of stuff. This product allows advertisers to drive the message on a much more call-to-action or timing basis.”

The out-of-home market would be healthy even without digital billboards, Ensley said. It’s been able to avoid some of the issues facing television and radio such as audience fragmentation or fast-forwarding of commercials with digital video recorders.

“You may miss it the first time you go to work. But if you’re doing it every day, that message is going to get through,” Ensley said.

Advertisers are also getting more creative with how they use outdoor advertising, said Paul Meyer, global president of Clear Channel Outdoor Holdings Inc.

Clear Channel recently tried interactive bus shelters in some of its European markets, enticing commuters to download information to their cell phones.

“I think you’re going to start seeing, slowly but surely, more and more experimentation with interactive communications between signs and consumers.”

Digital billboards offer many new opportunities, including the ability for companies to sell space in a time-share arrangement and open up high-profile locations to more advertisers. The same billboard, for example, could show a Starbucks ad for a mocha latte during the morning commute, movie listings from the local theater complex during the ride home and a late-night entertainment venue after the dinner hour, Meyer said.

Clear Channel Outdoor’s first foray into digital billboards was in Cleveland, where it launched a network of seven billboards. A local theme park featured its water rides during hotter days and showcased other attractions during cooler temperatures, Meyer said.

The San Antonio-based company made about $380,000 on those seven locations in 2004, and revenues jumped to nearly $2.5 million after they were converted to digital. Clear Channel Outdoor has since added six billboards in Las Vegas and 10 in Albuquerque and is building another network in London.

The Outdoor Advertising Association of America estimates there are 500 digital billboards on U.S. roads, compared to about 450,000 traditional billboards.

The giant screens can cost an initial investment of $300,000 to $500,000 as opposed to between $80,000 and $100,000 for a typical steel billboard structure, said Stephen Freitas, the Washington-based trade group’s chief marketing officer.

Many billboard companies charge the same for a rotation spot as they do for a single static display, so the same location can generate eight to 10 times the revenue that a traditional billboard could deliver, he said.