Every type of advertising has its own unique price range and reach,Â making it important to compare the prices of each type of media.Â Advertisers must compare the cost of each ad to how much it costs toÂ reach 1,000 people (cost per thousand or CPM).
CPM = (Cost of Ad) / (Size of Audience) * 1000
The CPM for outdoor signage & advertisingÂ isn’tÂ that complex. Here is theÂ easiest way to figure out the CPM for outdoor signage:
Multiply the daily traffic by the number of days the billboard will be posted thisÂ month (Note that the average signage facelift costs, on average, $4000).
Divide that number by 1000. (Save this figure, you will need it in a minute).
Divide the cost of your signage over a two-year period. You should only needÂ to update your signage every 3-5 years if done well. After that, you may beÂ in for a brand refresh or update. But letâ€™s just use a one year air-time for thisÂ exercise.
Note: It is really important to negotiate signage rights to any new premisesÂ you lease!! Certainly factor in a street view when choosing a building.
Hereâ€™s an example:
We will use Geelong Road in Melbourneâ€™s Western suburbs as an example.Â According to EWLNA research Geelong Road, East of Francis Street, hasÂ 42,000 vehicles travel down it per day. This is not the business road. There isÂ a load more areas with a larger population.
Note: Some outdoor advertisers will multiply this, claiming that sometimesÂ more than one person will be travelling in the car, but letâ€™s be real.
Daily traffic (DECâ€™s) is 40,000 and the cost of building signage was $4000.
- 40,000 x 30 days x 12 (months) = 15 million impressions
- 15,000,000 pairs of eyeballs/ 1,000 = 15,000 impressions
- $4000/15,000,000*1000 = $0.26 CPM
$3.9 is the cost per thousand in this example.
Just to give you a comparison. We recently advertised on Dynamic Business.Â The cost per impression for publication such as this is set at around $50.
Other higher profile publications such as BRW are usually hovering aroundÂ $70 CPM.
Estimates from the Outdoor Advertising Association of America suggest thatÂ car wrap advertising costs less than $1 per thousand impressions (CPM).Â The OAAA also found that one vehicle wrapÂ can generate 30,000 â€“ 70,000Â impressions each day.
Image courtesy ofÂ Mohamed Sharif.