Everywhere a (Low Tech) Sign

Why billboards in the Valley are in no hurry to go digital

Vince Kooch jokes that his fancy title at MGM Resorts is a bit of an overstatement. It’s a mouthful all right: executive director of corporate media and brand partnerships. The long and short of it is that Kooch scours the best media opportunities out there to expand his employer’s brand.

Recently, with MGM unveiling its new M Life player loyalty program, Kooch took out three billboard ads along Interstate 15 that can be seen when heading north to Las Vegas from the California border. The string-along message is simple: “play better “ (one sign), “earn better” (next sign), “Live the M Life” (third sign). While Kooch is backing the program with plenty of support marketing, he says the signs represent a reality that both advertisers and billboard owners/managers are facing today: Low-tech is often the best tech for getting your message out.

“I think there will always be a place for static signage,” he says. “When it’s more long-term [campaign] and you want the impact, [static] will always be there.”

Like every other advertising medium, billboards have taken their lumps during tough times. There are some 400,000 billboards across the country, according to the Outdoor Advertising Association of America, and outdoor advertising has seen a drop to $5.9 billion in spending for 2009, off from the $7.3 billion peak in 2007. The figures for 2010 are still being tallied, but early indications show that there may be some modest improvement.

Rates are a mixed bag. Some local operators say they’ve heard of dips as high as 50 percent, while others report more modest drops in during the recession. All reports are anecdotal, and operators are keeping their own rates under wraps. Bret Pawlowski, owner of local media buying company Billboards-4-Rent.com, estimates that billboard space sells for between $1,500 to $7,500 per month here, depending on location.

The Las Vegas Valley has nearly 1,000 billboards, according to planning officials in Henderson, Clark County, North Las Vegas and the city of Las Vegas. Only about 1 percent of all billboards locally and nationally are digital, says Tony Alwin, a spokesman for Clear Channel Communications, one of the largest billboard companies in the country.

Chad Harris of Las Vegas Billboards, says advertisers like the ability to change ads quickly on digital billboards. Harris’ company has 41 billboards in town, only one of which is digital. The digital sign helps expose his business to more clients, since sales on digital boards are in six-second time slots on a one-minute cycle.

“It gives me the availability of 10 new clients,” Harris says. “They’re going to pay a fraction of the cost. You can get a higher profile location at a lower rate.” Marla Letizia, founder of local mobile billboard company Big Traffic, a local mobile billboard company, says digital boards are good for the sign owner but bad for advertisers. The problem, she says, is that the first viewing of any billboard sign is accidental; the second is deliberate.

“By the second time, your [digital] ad’s gone,” Letizia says.

Besides, notes Pawlowski, the traditional billboard still can be used to engage with technology. Examples of restaurants promoting a text number that can load a coupon on a phone is an example; social media promotion is another.

“Look at the billboards on the Strip. They’re really just showcasing Facebook and Twitter,” he says.

Don Krueger is a vice president at Connell Outdoor Advertising, the company that manages the 41 static outdoor billboards at McCarran International Airport. Those signs brought in $6.5 million for the airport last year, slightly down from the $6.8 million the two previous years. Krueger says the billboard industry is learning that the rush to digital takes a little more due diligence than originally assumed.

“Personally, I don’t think digital belongs everywhere. I don’t think it belongs on freeways. It works on some surface streets with sufficient volume and good proximity to an intersection. You need that dwell time for the motorist to absorb [the ads],” he says.

Conversion cost is also a factor, says Harris. It costs about $500,000 to convert a sign from a static display. While he has seen an increase in the amount and type of his advertisers because of the digital sign, weighing out the payback time for a conversion is always on the mind of a small operator like him.

“It’s a large expense. When everything was booming you could see a three- to four-year payback. Now it’s more of a six-year payback,” he adds.

Until he sees more of a turnaround in the advertising industry, he’s content with the traditional billboards he owns or operates for others.

John Naccarato, a UNLV associate professor that heads up the integrated marketing and communications program at the school, says the traditional billboard will likely never be replaced.

“I tell students nothing really disappears. … There’s a place for everything. It just changes in the mix. They’re all just channels of communication,” he says.

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