Barter Companies Help Maintain 100% Occupancy On Your Billboards
By Frank Rolfe
note: Frank Rolfe started his billboard empire from his coffee
table, as a fresh graduate from Stanford University. It began as a
resume builder for graduate school applications, and ended with a
sale to a public company 14 years later.
strategies he developed from desperate competition with much larger
adversaries, Rolfe eventually owned more billboard units than any
private individual in the Dallas/Ft. Worth area. He has authored the
book Big Bucks from Big
Signs, available at
occupancy on billboards a realistic expectation, or an impossible
fantasy? Using the methods I am going to describe, you will find
that 100% occupancy is a fully attainable goal, and a minimum
performance benchmark for the future.
these techniques from trial and error on hundreds of billboards I
rented over more than a decade. Once you have learned the technique,
you can rapidly put the systems in place on every billboard in your
The key to
maintaining 100% occupancy on a billboard is to have multiple layers
of advertisers in place for the billboard space.
The first layer
is the regular, retail advertiser. This is your bread and butter,
and there is no substitute for this advertiser. This is the one that
pays the bills and makes the budgets work. However, try as hard as
you will, this layer will always have some degree of vacancy.
Every time the
advertiser does not renew, there will normally be some lag time
before you can find a replacement. That being said, you should
normally start re-leasing a billboard sixty days before it becomes
vacant, if the existing advertiser will give you that much lead time
in the form of notice of non-renewal. Start pushing the advertiser
to renew at least 60 days before lease expiration.
layer is an advertiser who would like that advertising space, but
does not want to pay the retail rate. He is happy to get some time
on the sign at a reduced rate, even if it is only for a few months
in between the retail advertiser. You will find this advertiser as a
byproduct of looking for the retail advertiser. This person will
tell you that they really like to sign, but cannot afford the price.
So we ask them if they would like to be on the sign now and then for
a cheap price.
Often the price
is only 50% of the retail rate. You print this ad on a sheet of
vinyl, and have it at the ready to put up the minute the retail
advertiser has expired. You send them a letter the day their ad goes
up, and a letter the day it comes down, and bill them for the period
at an already agreed to daily rate. Even at 50% of retail price,
this advertiser offers needed cash-flow to pay the ground rent when
otherwise the sign would sit vacant.
The third layer
is an advertiser that wants generic coverage throughout your
inventory. Its role is to make up for a missing second layer
advertiser. It might be a radio station, or someone selling
something like Mary Kay. They just want to reach raw traffic,
regardless of where it is. This layer should also pay about 50% of
the retail price, or slightly lower than that. Just like the second
layer, you should document the start and end date in writing, and
bill them a per day rate.
In some cases,
you might have to take trade or barter credits instead of cash for
this tier advertiser, often through a barter exchange firm. A barter
exchange works like an intermediary for the advertiser and billboard
company, with the advertiser paying in goods or services that he
produces, and receiving trade �credits� for those items. You should
call some barter exchanges (AKA trade exchanges) to learn which
advertisers are already members in the exchange.
will want to add a fourth layer, which would be public service
messages and the like. Normally, this tier of advertiser will not
pay cash, but will give you the possibility of a tax write-off (talk
to your CPA). Potential advertisers from this group include
non-profit agencies, such as the American Heart Association.
layering method, you should never again have a vacancy in your
inventory. In addition, you should never have a sign that is not at
least cash flowing. Banish vacancy and loss of income from your
budgets using this system, and you will be miles ahead of the
competition, especially when the recession hits.
One footnote to
this article: I received a call from my banker during the savings
and loan crisis of the late 1980s. The bank examiners were
questioning my financial statements and occupancy reports, since I
was showing 100% occupancy, which they believed was impossible.
I was cheating, to audit me, they asked me to drive them by all my
signs right then. We drove for about eight hours straight, by
hundreds of billboard faces, and not one was blank. They were
extremely disappointed that they had wasted a day looking at
billboards, and were unable to catch me in any type of fraud. If
only they had managed their bank as well as I was managing my
signs�they failed a few months later and were taken over by the