Thursday, January 3, 2013

Times Square billboards have a hefty price tag

2012 is a thing of the past, and 2013 is here. While billions rang in the New Year at parties, at home with loved ones, or simply doing laundry, one thing is for certain, millions were tuning in to “New Year’s Rockin Eve” at Times Square in New York City. Besides watching the ball drop, did you notice anything else in the square? The billboards perhaps? Ever give a thought to how much those billboards cost on a yearly basis?

According to AdvertisingAge, the billboards on top of One Times Square in NYC are some of the most expensive outdoor advertising in the world. In the Wall Street Journal, it’s reported that Dunkin’ Donuts spends approximately $3.6 million a year for the digital sign. Brewer Anheuser-Busch spends $3.4 million a year on its board. There are some reports that annual contracts could be as lucrative as $4 million. This shows the incremental rate increase since in 2005, the average yearly investment for a billboard on One Times Square was $2.4 million.

How can an advertiser justify that kind of investment for just the space and not even the production charges? Consider this, if just looking at “New Year’s Rockin Eve” at Times Square, there were 22.6 million viewers tuned in to watch 2011 turn into 2012. Dunkin’ Donuts would have paid about $0.16 for each person/impression. That doesn’t include the millions that visit Times Square throughout the year or the thousands that were in attendance that night. Even if a tenth of those 22.6 million viewers (2.26 million) bought a 1lb bag of coffee for $8.99, that’s $20.3 million in revenue, and $16.7 million in profits. Makes it easier to understand the gamble, doesn’t it?

No comments:

Post a Comment