All Is Not Well in Billboard Land!

The outdoor advertising-billboard industry, in the US, has been hit hard right in the wallet where it counts most.

Outdoor-Billboard Owners, operators and more importantly "stockholders" are unhappy. Very, very unhappy. Discontent is mounting.

While many blame the overall "recession" this current market environment could well indicate a deeper and more significant advertising "structural" change. Newspapers, magazines and trade journals have also been decimated by dropping ad revenue.

The reports from the field is that owners and operators face a double hit, as some deep pocket and normally heavy spender national advertisers switch to less expense on-line media marketing and others just trimmed advertising budgets to the bare bone.

Expenses continue to grow with less and less income.

The result is many "vacant" billboards, everywhere,on both major and secondary highways, or with "occupied boards' but with stale advertising copy but no income.

The downturn in the economy has both the big-boys and the mom-and-pop operators more than just nervous. For many it may well be a "make or break time."

Those firms with mega-debt obligations it's another tragic financial disaster story just waiting to written.

Within the past decade some of the national giants" over-paid for their inventory of "assets." Grossly overpaid, that is!

Some billboard industry insiders say that outdoor revenue is down about 15% with another drop of between 15% and 20% is going to hit soon. A vacancy rate of 50% in some markets is very possible.

Outdoor billboard advertising rate-cards are now considered as good fictional reading material.

The parent company of Clear Chanel Communications, the US largest billboard and radio operator ,reported a $3.7 billion dollar loss in just the 2nrd Quarter AFTER writing off $4 billion dollars in billboard permits.

LaMar Advertising of Baton Rouge, the nation's 3rd largest billboard operator said it has closed 1,800 billboard and smaller sings as a cost cutting measure. They reported a $11.8 million dollar loss also in the 2Q.

Expect everything from some bankruptcies and even some acquisitions and mergers begins to play musical chairs.

Those owners and operators without major debt service will probably be OK. Anticipate some cash-rich global outdoor-advertising firms coming on the scene and to "cherry-pick" various markets clean.

The lessons I believe, are similar that of the banking and financial world; veryone needs to go back to square-one, relearn the basics of the business, adjust now to current and prevailing market conditions, know the customers or simply be-gone.

The outdoor-billboard advertising business needs to come down to planet earth and the high flying days are long gone.

Bill McInerney

617 816 3933