Thursday, April 10, 2008

CNN Money looks at Lamar's digital billboard aspirations

Inc. profiled Magic Media's digital billboard prowess in last month's (March '07) issue, and this month CNN Money is taking a look at Lamar Advertising, whose 150,000 static billboard network makes them the third largest OOH company in the country behind Clear Channel and CBS Outdoor. Their take:
A few years ago, [Lamar CEO Kevin Reilly Jr.] and his colleagues had an epiphany: Unlike other forms of media, the basic business of building walls on stilts
and selling ads on them wasn't under direct threat from the Internet. If anything, technology could help billboard operators like Lamar save money. By using digital technology and broadband connections, Lamar could stitch together a network in which a single ad could be displayed at multiple locations. And as prices for next-generation screens fell, Reilly figured, any billboard could be turned into a veritable Jumbotron: like my digital picture frame, multiple images can be rotated across the screen.
Nothing too new for those of us in the industry, but what I found particularly interesting were the few bits about their expansion plans:
So far, Lamar has 720 digital "faces" in 120 markets, which is a small
fraction of the company's overall reach but more than the 200 billboards installed so far by industry giant Clear Channel. Lamar plans to invest $100 million a year or so over the next five or six years to install up to 6,000 more digital billboards.
Citing the difficulty of turning a diverse set of billboards into a unified ad messaging platform, the expense of present-day technologies and the impact of our current economic uncertainty, Reilly noted that there are still numerous hurdles to overcome before digital billboards become as commonplace as their static brethren (and he didn't even mention legal/regulatory issues, which I know come up very frequently when towns and locales try to resist the bright lights of a fancy new electronic sign). Still, Reilly indicated that digital billboards present both a net cost savings and revenue boost, making them the biggest thing in the billboard industry in a long time, so it's likely that Lamar and its rivals will continue to invest heavily in the strategy in the coming years.

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