Illuminated Treasure

Disruptive Technology

In the LED world there are many incentives to retrofit Incandescent, Florissant, Metal Halide Lights....etc. Tax credits and rebates and high cost of EPA disposal regulation spur the Design Lighting Consortium certified products but when it comes to other markers for LED, the brightness and longevity are the only incentives.

The real treasure

So what has happened recently? I have had three LED resellers come at me with orders for LED Digital billboards. I wasn't going to look a gift horse in the mouth but wanted to take advantage of this trend when I decided to call on a billboard company I had seen recently. I Googled Out Front Media  and I read their announcement they the company formerly known as CBS Outdoor is now Out Front Media and they are on a campaign to convert their signage from vinyl to LED Digital. They have new investors and are able to stand on their own. With vinyl signage it can take a month to six weeks to get your advertisement displayed, after you get you artwork approved. The billboard company can charge up to $2,500.00 per month for that sign depending on the traffic. With a LED video wall sign you can display your add electronically. The owners of this advertising real-estate can charge $800.00 month, flipping every ten seconds through six to ten advertisements. The review is between $6,400.00 to $8,000.00 per month. A LED video wall billboard sign can cost over $250,000 but they can also cost as little as $46,000.00 depending upon the size and pixel pitch. They are moneymakers! If you wanted to buy a franchise from Starbucks to MacDonald's it is going to cast you four to 25 times this amount and you might not make any money for two to five years. If you could buy into a business where you could recoup your initial investment between seven months to a year, how soon would you want to get started? If you had inventory(Vinyl signs waiting to be converted to digital LED) how many investors do you think would line up to cover the conversion to LED Digital video wall signs?

ROI

Investment planners talk about "The rule of 72" this is the law of compound interest. If you take the annual rate of return on your month and divide it into the number 72 will determine how many years it will take you to double your money. When you back engineer this law you can estimate your return on investment. So if you can investment in seven months and double your money in 14 months by selling six adds per month you would realize a return of 43% the first year and you would be up 120%! If you sold eight adds per sign it would be work out to 210%. I had financial planning clients that have earned 23% over the last five years and I feel pretty confident about that.

Risk

We have all heard "Risk vs return" but that why you buy insurance which are paid for out of the advertising costs. You also have legislative risk. Some municipalities restrict the use of video display adds along the highways. It is odd with the amount of traffic in Las Vegas where every sign is a video advertisement or downtown Dallas where it is okay but in the outskirts of Dallas it is a long permit process. When you calculate the environmental benefits of LED compared to the chemicals used to paste up vinyl sign not to mention the disposal cost when you change the advertisement, legislators might ease the restriction for LED video wall signage.

It's a trend

With all of these considerations you can see the increase in video wall billboard advertising. Every time you see a vinyl billboard sign will make you add up the potential being lost. I see web-sites for TV, movies and cell phone companies with 5G plans for car passengers to watch on their smart phones, IPads and Tablets.