The purchase of advertising space on billboards is an exciting subject, as the possibilities offered by this media are so numerous. On this blog, you will find several articles on the different types of billboards as well as on how to buy your billboards. Here we focus on one essential point: the analysis of the budget proposal. It is essential to understand your advertisement costs. To do this, you need to know how to calculate the useful and crucial price index to make your choice.
In this article we will give you all the keys to become an expert on the rates of a billboard network.
I - The gross and net rates of your billboards
When you get a quote for a this media, you can see that there are two rates : the gross rate and the net rate.
The gross rates are always discounted, but each advertising agency has its own scales of discounts. For example, a historical display company well known to French will generally give discounts between 5% and 15%, whereas an American company present in France and throughout the world will give discounts between 60% and 85%.
Thus, this discounted net rate compared to the gross rate represents the cost of your device. However, you should be aware that the rates of billboards networks never have the same costs! In fact, the rates depend on the period: a device in August will not cost the same as a device in September. As visibility is higher in September, you will inevitably have to pay more.
Similarly, it is not because two devices seem similar to you that they require the same investment.
For example: a 40 face network in 2m² in Rouen will cost you less than the same system in Paris.
The geographical area must therefore also be taken into account, as well as the scarcity of supply or the potential monopoly of an outdoor advertising company in a given geographical area.
II - Additional costs inherent to the purchase of a billboard network
However, the net rate is not the only cost to be taken into account in your total budget when purchasing billboards. You have to add several costs to this.
Printing costs :
When you use traditional billboard, with posters in paper format, you must take into account the printing costs of these posters. You can choose either to have them printed by the company you bought them from or by an external and/or independent printer.
This cost depends on the size of the format on which you wish to communicate and the number of posters to be printed (i.e. the number of sides of your display). Logically, the larger your format is, the more expensive the poster will be. Likewise, the more faces you have, the higher the printing costs will be.
The calculation of these printing costs :
Each printer determines a printing cost according to the different formats. These costs are not known but can be determined according to the calculation below:
Printing costs = (number of side + number of side * 30 %) / printing costs
Your printing costs (most of the time) correspond to the number of sides of the network you have booked + 30% of this number of sides. This additional 30% is a safety margin that allows you to ensure the replacement of certain posters in case of damage during the installation or during the campaign due to bad weather for example.
When you advertise on billboards, you must pay municipal taxes that are specific to each city. They are often determined according to the size of the community.
If you are communicating on digital display:
The printing costs are obviously not to be expected, however you should think about the costs related to the creation of the spot. Some billboard companies may offer to design this spot for you, but you can also use your communication department or an external service provider. In addition, you will be charged for the technical costs related to the technology used by the company for the distribution of the spots.
III - Indices to be calculated for the purchase of spaces on billboards
To assess whether the network proposed to you is relevant and cost-effective for you, it is advisable to calculate certain costs that will allow you to compare several devices.
The contact cost
The contact cost is one of the price index that will allow you to estimate this.
In general, each outdoor advertising company will send you a media kit presenting the proposed network in addition to the quote. It is on this media kit that the number of contacts that you will be able to reach with this device appears.
You can then calculate your contact cost by the following calculation:
Contact cost = net budget of purchase of ad space excluding costs/ tax
Number of contacts
Be careful not to include any costs or tax in this calculation! It is the net budget here that interests us. As you can see, the higher your contact cost is, the more expensive your device is.
On your quotations or media kit these contacts can be represented by the notion ODS (Opportunity To See), it is just a different name.
You will find an example below:
Cost per face
This price index is essential to establish your choice, it is a true indicator.
To calculate the cost per face, just follow the same logic as for the contact cost.
Cost per face = net budget of purchase of ad space excluding costs/ tax
Number of contacts
Once again, we use the net budget, excluding printing costs and other taxes. Here again, the higher your cost per face is, the more expensive your device is.
The CPM or cost per thousand is similar to the cost per face but it si the price index for the digital display.
In general, when you decide to appear in digital display, the number of panels on which your ad is shown is much lower than the number of faces in a traditional advertising space.
Here this calculation will let you know you how much 1,000 spots cost you.
CPM = net budget of purchase of ad space excluding costs/ tax
Number of contacts
The CPM is also an indicator used in the digital advertising you can make on the internet: digital press, websites, social networks... This cost allows you to identify the most competitive offer and thus to direct your choice.
Be careful however not to take into account only this one price index. A low CPM does not guarantee efficiency. It is necessary to take into account the context, the format, the audience... Do not hesitate to consult our blog on the subject.
If you want to advertise in display, whether print or digital, we are here to advise you and find the best devices:
Written by Marine Collet