How To Calculate The Value Of Outdoor Signage

What is the best value for advertising your business?

Let’s say that Mya is opening up a new bistro and wine bar at a location where a former pizzeria was operating. She likes the idea of getting a set of illuminated channel letters and is trying to decide between the following two options:

• Option 1: Replace the faces on the cabinet of the existing pole sign that’s in front of the property or

• Option 2: Remove the existing cabinet on the pole sign and replace it with a new illuminated cabinet with an electric message center to promote specials and events.

Here's how you can calculate a cost per thousand exposures for your own sign:

1. Determine the amount of your initial investment that you plan on allocating for your signage. 

2. Estimate the life span of your sign. Depending on the type of sign, if it is manufactured properly using quality materials, you should expect at minimum 12-15 years good years out of it. 

3. Factor in the amount of service and maintenance expenses that you might incur during the lifetime of your signage. Again, this is going to depend on the type of sign your getting and why it’s important to know what materials are being used during the manufacturing process. For a newly manufactured sign, expect to require about 1-2 service a year. Divide your average annual cost per month for your sign by 1,000. This will give you your monthly gross impressions in thousands.

4. Conduct a traffic study to determine the total number of possible consumer exposures (over a 30-day period). This is information that the public of transportation should be able to supply, if not, you can refer to a sign company.

5. Since all signs are not equal it is good to narrow down the level of effectiveness of the signage. Things such as illumination, contrast, and type of signage can determine the level of consumer exposures for that specific sign. a) the probability that a vehicle will have more than one person rid- ing in it, and b) the likelihood that not every- one will actually notice your sign. The num- ber used above for On-Premise Sign (30,000) is typical of a four-lane road that passes through a commercial business district in a mid-sized American city.

6. Divide your monthly gross impressions by the adjusted amount of consumer exposures to get your adjusted cost per thousand exposures. Think of how much advertising you would need to purchase in other forms of media to obtain the same number of effective consumer exposures. On-premise signage is one of the most affordable forms of advertisement to gain brand recognition.

Now going back to our example, Mya’s Bistro and Wine Bar - we determined that the illuminated channel letters would cost her $9,500, replacing the cabinet faces would be $5,260 and to re-do the entire cabinet with a new message center, it would be $38,000. The traffic study that was conducted determined that there are 52,761 vehicles a day that are exposed to her restaurant. Out of those, only 6 out of every 10 drivers were aware of the pizzeria that was located there from poor on-premise signage. With a new pole sign and message center, we expect that the lifespan of the sign will last an additional 3 years and 9 out of 10 vehicles will notice her signage. So let’s take a look at wha the cost per 1000 impressions would be for the above example:

Option 1 : No Message Center

$ 9,500 illuminated exterior signage + $5,260 face replacement + $3,600 service over lifetime of sign = $18,360 (Total cost of sign)

Estimated lifespan = 12 Years

$18,360 / 144 months (life span of sign) $127.50/month

52761 impressions/day * 60% = 31,656 adjusted impressions/per day

(31,656 * 30) = 949,680 adjusted impressions a month

(949,680 / 1000) = 950 / $127.50 =

$7.45 cost per 1000 impressions

Option 2: LED Message Center

$9,500 illuminated exterior signage + $38,000 electronic message center + $3,600 service over lifetime of sign = $47,500

Estimated lifespan = 15 years

$47,500 / 216 months (life span of sign) = $219.90

52,761 * .9 = 47,485 adjusted impressions per day

47485 adjusted impressions/day * 30 =

(1,424,500 adjusted impressions per month /1000) =

$6.48 cost per 1000 impressions

So as you can see, Mya’s cost per 1000 impressions is nearly $1.00 less if she was to go with the LED message center. One thing to keep in mind is the importance of the design and aesthetic look of your signage. The last thing that you would want is getting thousands of impressions a day with outdated or broken signage.

Feel free to contact us if you would like more information on calculating the CPM for your signage.

"How did you hear about us?"

Taylor, Charles R. and George R. Franke (2011), “Public Opinion toward Digital Billboards in the United States: An Analysis of Recent Polls,” in Advances in Advertising Research (Volume II): Breaking New Ground in Theory and Practice. (Shintaro Okazaki, Ed.)Heidelber,Germany:Gabler.

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