When you think of roadside electronic digital billboards, think of a product that is just like traditional vinyl billboards. And completely different.

Alike in that digital billboards are a proven, effective way to communicate an advertising message to thousands of passing motorists each day. And alike in that, similar to their vinyl counterparts, they convey that message without adversely affecting driving habits-as initially feared by certain communities-and in a way that is becoming increasingly accepted and appreciated.

While still considered a new medium, digital billboards are already bringing out the creativity of local ad campaigns with timely, relevant information that is interesting to passing motorists.

However, unlike their static vinyl counterparts, which are among the slowest and most difficult advertising mediums to change, most digital billboards not only instantaneously switch messages every 8-10 seconds, but can update advertiser information in the time it takes to send a signal over the Internet as well.They also offer the opportunity to feature several advertisers on a single board, instead of just one.

Digital billboard manufacturers say it’s reasonable to expect a 10-year life from a quality product, with sales of ad slots to multiple clients producing thousands of dollars in revenue per month. Even taking into account a roughly $300,000-$400,000 initial purchase price, plus ongoing power, Internet and related costs, the signs offer an enticing business opportunity.

“The big deal with digital billboards is that they allow our customers to make substantially more revenue per board, and provide effective advertising for the customer,” says Darrin Friskney of Watchfire Digital Outdoor, Danville, Ill. “The real benefit to a digital billboard is that, for the first time, outdoor advertising can be timely and relevant.”

Changing the advertising mindset from a simple, long-term message to an up-to-the-minute information source may be the biggest challenge when dealing with digital billboards, which are most often installed in approximately 14-by-48, 10-by-36 and poster size 12-by-25-foot configurations, as well as custom sizes.

“The whole idea is to be more timely,” says Jeremy Johnson, commercial business development manager for Daktronics, Brookings, S.D. “Basically, this technology takes a medium that historically is the slowest to change, the least flexible, the most difficult to react to in real time and has made it the most flexible, the most reactive, the best medium for change. Because you can change content, literally, in seconds.”

What You See
While still considered a new medium-the Outdoor Advertising Association of America estimates a little more than 800 are currently operating in the U.S. (see story on page 28)-digital billboards are already bringing out the creativity of local ad campaigns.

Some of the progressive ways advertisers are taking advantage of the timeliness of digital billboards include:

• Car dealers that advertise a specific vehicle on the lot, or a certain type depending on the weather, such as SUVs on snowy days;
• Real estate companies that highlight a specific property, and then change their message once it sells;
• Restaurants that offer time-appropriate breakfast, lunch and dinner specials;
• Radio stations that provide “now playing” information in real time;
• Television stations that tease up-coming stories on the evening news;
• Savings and loan organizations that promote daily interest rates.

“The positives for the advertisers relate to the ability to change messages quickly and to be able to display different images and concepts at different times of the day,” says Bob Klausmeier, sales manager for YESCO Electronics, Logan, Utah. “Messages can be scheduled for days in advance.”

That changeability also makes digital billboards an effective news source, and is helping introduce their benefits to local communities. From last year’s Minneapolis bridge collapse, to the recent Super Tuesday primary election results, to AMBER Alerts and FBI “Most Wanted” postings, the boards have been used to get important information to drivers fast.

In fact, some billboard operators are saving space in their lineups for community notices-everything from upcoming local festivals and theater productions to reminders about watering restrictions-which is helping municipalities embrace the new technology.

“We did a recent installation in Canada that has provided the billboard company with more revenue than they originally anticipated,” says Ed Koch, Trans-Lux West national sales manager for Trans-Lux, Des Moines, Iowa. “And the city has come to understand the flexibility of the board, and uses it to promote citywide activities.”

Some operators are even finding that those individual slots can become added moneymakers, notes Chris Olinger, director of billboard sales for Adaptive Micro Systems, Milwaukee.

“A lot of the owners of smaller billboard companies are actually reserving one or two slots on their billboards for one-day events-anniversaries, birthdays, etc. If an advertiser has a big customer coming into town, they put them up on the digital billboard to welcome them,” he says. “One guy told me he is averaging $500 a day-he’s turned that one slot into $15,000 a month in revenue.”

All of this keeps digital billboards fresh and exciting, suppliers say.

“People want to drive by, because every time there’s something interesting on it,” says Paul Amenta, vice president of sales for LED displays and digital signage, LSI Industries, Cincinnati. “It’s not just an advertisement board.”

The Next Steps
The excitement surrounding this new medium is likely to lead to explosive growth over the next few years.

“This is the breakout year for digital billboards,” Klausmeier says. “In 2008, the number of placements will double.” Koch agrees, noting, “2008 and beyond should be excellent for digital billboard sales.”

While exhilarating, billboard suppliers also believe it’s important that the industry puts its best foot forward from the start as it bursts onto the scene nationwide.

“Right now we’re all lumped together,” Olinger says. “So, when somebody puts out a bad product, it hurts all of us. When you go in front of a zoning board in a city, and somebody did something 1,000 miles away and it made the TV news, we all have to answer for it. It doesn’t matter if it wasn’t [our company], because they don’t care. If the industry doesn’t police itself, or demand the highest quality, that’s what could actually hurt us.”

Among those important issues, he says, is the security of the Internet connection so that hackers don’t take over a digital billboard, as well as addressing reflectivity standards so that boards can be read clearly at all times of the day, even in direct sunlight.

The general appearance and longevity of the boards is something all suppliers say they are closely monitoring, as the industry strives for that 10-year lifecycle and beyond.

Amenta notes that his company is among those that work diligently to avoid the fuzziness or patchiness that can sometimes appear on older LED boards, also known as quilting. He too believes that, should the industry grow too quickly and attract subpar manufacturers without safeguards in place, a sudden outbreak of poor-quality digital billboards could turn people away from the medium.

“We’re here to educate people that when you are buying electronics, you need to buy a little better, or else you’ll have to replace it a lot sooner,” he says. “It’s important that [the industry] figure that out.”

On a shorter-term scale, the billboards can be subject to the gremlins that occasionally plague any electronic device. The key is, whether the billboard operators maintain the signs themselves or rely on the suppliers for service, that the units get fixed quickly.

“The technology is good and [the billboards] are very reliable,” says Daktronics’ Johnson. “But, you have to face reality. It’s electronic equipment; it’s going to need service. What’s important is that we can’t have a sign down for a day. In this business, that’s completely unacceptable. So it’s important to have that infrastructure to support uptime. Make sure the displays are always performing and always making money.”

Maintaining a good Internet connection may be at the top of the list of potential problems. Fortunately, technology allows operators to constantly check that connection and oftentimes diagnose and fix problems remotely, if necessary. Most all of the boards are also monitored via Web cameras, so operators and advertisers can check a board’s status in real time.

Technology that seems to be universally supported is the auto-dimming capabilities that allow boards to run at or near full brightness during the day, and drop down to around 3 to 5 percent at night.

Koch notes, for example, that Trans-Lux “offers dimming of the LEDs, which prevents the billboards from being bright at night and on cloudy days. This helps cities be more accepting of the product.”

“You don’t want the driver to be blinded, and you certainly don’t want to make it any brighter than it needs to be,” Amenta adds. “The billboard [owners] are sensitive to that, and we are too.”

Winning the Battle
Reactions to digital billboards vary from town to town, of course, but overall the industry appears to be making its case as a beneficial advertising medium. And with recent studies showing they don’t increase traffic incidents (see OAAA article that follows), resistance seems to be slowly fading.

“The tide is moving in our direction,” says Watchfire’s Friskney. “The billboards are being accepted in more and more cities, counties and municipalities. It’s not unusual for a small-but-vocal minority to raise some opposition, but once the community sees the benefits, not only for the billboard operator and their advertisers, but also what digital billboards can do for a community, we are finding them to be pretty quickly accepted.”

Johnson agrees. “Certainly the regulatory environment can be a barrier to entry. But it’s improving,” he says. “I don’t know if there are fewer battles, but there are more battles being won than lost. People see the medium being installed and understand that it’s not going to be a giant television screen and it’s not going to be flashing or using intermittent lights or broadcasting video images. They see that it is just like a static billboard, except that the copy is changed differently, and they become very accepting of it quite quickly.”

Of course, getting initial approval is just the first step. “Placement takes time,” Klausmeier says. “Even when the zoning resistance is overcome, the permitting process can be time-consuming.” To help, billboard suppliers are continually seeking ways to make the units lighter, so that when existing traditional billboard structures are converted to digital they don’t require significant upgrades, which often extends the permitting process. The companies are also working on making digital boards more energy-efficient, and to reduce costs wherever possible in order to ease initial entry into the market.

“People always ask me, ‘There’s a lot of interest in your product and people are buying it-what’s your incentive to lower the price?’ Well, the financial models need to work,” Johnson says. “Right now they work in a lot of places, but they don’t work everywhere. It would be difficult to justify putting a digital billboard in Brookings, S.D., for example. So every time our prices come down, more of those doors open, because the companies can charge less and get the product installed.”

All told, it appears that electronic digital billboards are well on their way to carving their own outdoor advertising niche in a win-win-win situation for owners, advertisers and communities.

“This is really a fun situation to be in, where everyone who is involved with the product is actually benefiting,” Friskney says. And, maybe most importantly, they can keep up in today’s fast-paced world. “It’s a new medium that people can really grab hold of,” says Olinger. “It empowers people to make more money. And it is instantaneous, like nothing else.”