Billboard hits

The outdoor advertising industry has enjoyed a resurgence, with revenues expected to reach a record $5.2-billion this year. But not everyone is thrilled with these signs of success.

By SCOTT BARANCIK

Revised November 29, 2000

© St. Petersburg Times, published November 26, 2000

Inside the factory at Outdoor America Images Inc., massive ink-jet printers are churning out images on vinyl sheets, some the size of a one-bedroom apartment. One trumpets reruns of Frasier on WTOG-Ch. 44. Another points highway drivers in Manitowoc, Wis., to an exit for the local Holiday Inn.

Before the day is over, the Tampa manufacturer will print 30 to 40 billboards, up from 10 a week during the old days of hand-painting. Once dry, the 70-pound sheets are folded, boxed and shipped to installers, who clamp the fabric to structures high above the nation's highways.

The renaissance of billboards wasn't supposed to happen. Tobacco companies had pledged to stop using them. The Internet was going to drain business away. Critics were trying to get them banned. Yet revenues from ads posted along highways, bus stops and benches are expected to reach a record $5.2-billion this year, up 8.5 percent from 1999.

Improvements in printing and design technologies are partly responsible. But luck has played a larger role. Local bans on billboard construction have helped keep potential competitors at bay. The timely arrival of dot-coms has filled the void left by Big Tobacco. Even the gradual slowing of the U.S. economy has helped by persuading companies to seek less expensive modes of advertising, including billboards.

"To an ad agency, they're like Hamburger Helper," First Union Securities analyst James Boyle said. "They help stretch the budget."

The first billboard in the United States was developed in 1835 for a New York circus act, according to the Outdoor Advertising Association of America. A century and a half later, the preparation of signs had changed little. Designs were stenciled onto wood or metal slats. Workers hand-painted between the lines, then reassembled the pieces onto huge roadside easels.

But computer-aided design, high-tech inks and $500,000 printers developed in the early 1990s have changed all that. Together they have reduced from 60 days to 10 the time it takes to convert an idea into a billboard. The medium has become far more flexible.

"In today's world, companies can be out of business in 60 days," said Wayne Mock, president of Eller Media Co., the Tampa Bay area's largest billboard owner.

Not everyone in the Tampa Bay area is thrilled by the industry's resurgence. Some residents complain that Fourth Street in St. Petersburg and Dale Mabry Highway in Tampa look like Yellow Pages come to life. Officials in many cities and counties have responded by outlawing new signs, with some pledging to rip down existing ones.

But billboard owners have fought the bans in the press and the courtroom. They want equal treatment for other visual clutter, such as McDonald's yellow arches and newspaper racks.

"It's a property rights issue," said Patti Blass, general manager of Infinity Outdoor, the area's second-largest billboard owner.

Billboard companies boast that they offer an inexpensive and effective alternative to other advertising media. The Outdoor Advertising Association estimates that it costs about $6 to $23 for a radio, television or newspaper ad to reach 1,000 people. With billboards, the cost is $1 to $4.

"A billboard is something you can't turn off," said Linda Austin, office manager at Lamar Advertising in Lakeland. "If it's there and you're in traffic, you're going to see it."

Outdoor advertisers do have some built-in advantages.

One is their low cost of operation. Once a billboard company has signed a 20-year lease on the underlying real estate, obtained state and local zoning permits and spent about $50,000 to build a frame, there's little maintenance except mowing the grass.

Federal and local bans on billboard growth have given outdoor advertising companies another potential advantage: a fixed inventory. While their broadcast and print competitors continue to fragment and lose audience share, billboard companies enjoy a growing audience.

"Inside the home, you have newspapers, the Internet, cable TV, broadcast TV, all shooting at each other," First Union's Boyle said.

But a billboard showing a still photo of a car cannot replace a 30-second narrative commercial set to music.

"We're not saying that they read it and remember it," Blass said. "They've driven by it, basically."

Advertisers concur. According to Salomon Smith Barney analyst Niraj Gupta, the outdoor advertising industry accounts for just 2.2 percent of all advertising expenditures, less than the Internet, whose advertising value is doubtful. The share is not expected to grow in the near future.

Yet billboards still are considered a hot property, especially by their radio-industry competitors.

In December, Infinity Broadcasting, owner/operator of 187 radio stations across the United States, bought Infinity Outdoor, which controls 32 percent of the national outdoor advertising market. Eller Media Co., with a 26 percent market share, is owned by Clear Channel Communications, a 900-station conglomerate. Even Lamar Advertising Co., which controls 25 percent of the market, is one-third owned by Clear Channel, although the Justice Department has ordered divestiture of the shares by the end of 2002.

It's no coincidence.

"People in cars are a captive audience," said Sheila Hayes, spokeswoman for the Outdoor Advertising Association. "The combination of radio and outdoor advertising is a one-two punch."

Before cigarette companies kicked the billboard habit, Phillip Morris USA's Marlboro brand occupied the most expensive sign in the Tampa Bay area. Today the lucky tenant is a Phillip Morris beer.

Drivers traveling west on Interstate 4 or south on Interstate 275 in Tampa can't help but see the huge, 3-D Miller Icehouse sign at the junction of the two highways. According to the Traffic Audit Bureau for Media Measurement, about 187,600 adult drivers and passengers pass the sign each day, more than any other in the metropolitan area. Infinity Outdoor, the billboard's owner, estimates the monthly rent at $10,000 to $15,000.

"This board is not for somebody who's being cheap," Blass said.

By contrast, the least-viewed billboards in the Tampa Bay area are on stretches of U.S. 41, with one patch drawing fewer than 3,000 adult passers-by each day. Monthly rents along this road are as low as $500 per month.

Traffic counts are the primary driver of a billboard's price. But there are other factors. Do trees block the drivers' view? Is the sign lit? Will the driver see the sign straight on or at an angle? How many other billboards are within view? What are the demographics of the commuters driving by?

Take Cracker Barrel. When the restaurant chain chooses where to locate its roadside eateries, company planners base the decision in part on the availability of nearby billboards, which they use to point hungry drivers to the closest exit. No billboards, no Cracker Barrel.

Want to sell a luxury product such as BMWs? Hang signs in the well-to-do Tampa suburb of Carrollwood, Blass says. Trying to reach "hip and trendy" drinkers? Rent the billboard at the 22nd Street exit off I-4, gateway to Ybor City.

On the other hand, if you're simply seeking to build brand awareness, consider rotating between several billboard locations. Tampa-based BrainBuzz.com, which runs a Web site for information technology workers, used this strategy to reinforce its name and its bug-eyed mascot.

As for advertisers with short-term goals -- political candidates, for example, or retailers hosting a sale -- billboard executives recommend a "showing." A "50 showing," for example, is a campaign aimed at reaching 50 percent of the local population every day. Identical ads are placed on several dozen billboards simultaneously.

"It's a very economical way to reach a whole lot of people over a relatively short period of time," said John Ricci, Florida regional sales manager at Eller Media Co.

It's also a good way to keep billboards occupied. Infinity Outdoor's local occupancy rate is at 90 percent and will rise to 100 percent around Super Bowl time.

Whether outdoor advertising companies will continue to thrive in the future depends in part on local officials and judges. While a ban on new billboards has had the unintended effect of keeping out new competitors, a widespread move to tear down existing billboards could spell disaster for the industry.

But billboard companies passionately believe they will win the legal battle, and maybe even the public relations war.

"When you think about it, we're really good neighbors," Blass said. "We don't make any noise, we don't pollute, and we're never home."

- Times researcher John Martin contributed to this report.

Daily eyeballs

These are the most-viewed billboards in the Tampa Bay area, by number of people viewing per day. All five are in Tampa.

1. 187,600. Location: I-275 at I-4. Owner: Infinity Outdoor. Current ad: Miller Icehouse Beer.

2. 169,600. Location: Dale Mabry Highway, 100 feet north of I-275. Owner: Eller Media. Current ads: Mayor's Jewelers, Regal Cruises.

3. 129,900. Location: I-275, 50 feet west of Dale Mabry. Owner: Infinity Outdoor. Current ad: EpixWeb.com.

4. 119,900. Location: Ashley, 50 feet south of Laurel. Owner: Eller Media. Current ads: BrainBuzz.com, Mercedes Benz.

5. 114,500. Location: I-275, SE corner of Busch Boulevard. Owner: Infinity Outdoor. Current ad: eHome.com.

Note: Figures may double count commuters who see a sign twice, going to and from work or school.

Source: Traffic Audit Bureau for Media Measurement

It adds up

Estimated share of advertising spending in 2000, by medium:

Newspaper: 20.1%*

Direct mail: 19.0%

Broadcast TV: 18.5%

Radio: 8.3%

Cable TV: 5.5%

Magazine: 5.1%

Internet: 2.7%

Billboard and other outdoor: 2.2%

Other (Yellow Pages, etc.): 18.7%

* Excludes classified advertising

Source: Salomon Smith Barney

Growing up

Projected annual growth in ad spending, by medium, 2000-2003

Internet: 36.4%

Cable TV: 12.0%

Radio: 8.7%

Billboard and other outdoor: 8.5%

Direct mail: 6.2%

Magazine: 5.0%

Broadcast TV: 4.0%

Newspaper: 3.8%

Other (yellow pages, etc.): 5.0%

Source: Salomon Smith Barney

A peek inside the billboard industry

Dominant players nationwide: Infinity Outdoor (32 percent market share), Eller Media Co. (26 percent), Lamar Advertising Co. (25 percent)

Biggest players in the Tampa Bay area: Eller Media and Infinity Outdoor

Projected national revenues in 2000: $5.2-billion

Prohibited from using billboards: tobacco companies

States that have banned billboards: Alaska, Hawaii, Maine, Vermont

Most common types: bulletins (14 foot x 48 foot or 10 foot x 36 foot), 30 sheet posters (12 foot x 24 foot) and eight-sheet posters (6 foot x 12 foot)

How bulletins are made: Most are printed on vinyl by huge ink-jet or airbrush printers; some simpler ones are hand-painted.

Number of reported billboards in the Tampa Bay area: 1,555 bulletins (all but 142 are illuminated), and 1,331 30-sheet posters (all but 139 are illuminated)

Source: Traffic Audit Bureau for Media Measurement, Outdoor Advertising Association of America, Salomon Smith Barney

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