Are billboards effective advertising?
A man walks past a Calvin Klein billboard on the side of a building June 17, 2009 in the SoHo neighborhood of New York City.
Billboards may be old-fashioned, but they’re still big business for advertisers.
That may seem odd, considering how hard it is to measure the effectiveness of billboard ads.
Walking on Sunset Boulevard in Los Angeles, Christopher Taylor didn’t notice the 50-foot billboard for a TV show. The ad didn’t even register.
Even though there isn’t an easy way to calculate the return on advertisers’ investment, S&P Capital IQ equity analyst Tuna Amobi says, “There is little question that it is effective. The question is, to what degree or what magnitude.”
Some costs of billboard ads are not born by advertisers.
Condo-owner David Korkis has his windows blocked by a giant ad.
“I had one of the best views in LA. Then, because of that billboard and the sloppy job they do putting up the billboard, it’s dark in there. It’s depressing,” says Korkis. He complained to the management, but he says “they make about $50,000 to $80,000 on the thing. So no matter how I complain, it’s not going to change.”
Studies have shown that a nearby billboard can reduce property values by up to 30 percent.