Does a Digital Billboard Make Sense?

I have seen strong demand on the part of clients for digital billboard financing.  Digital billboards make sense for good locations.  A digital billboard, however, will not make a bad location good.  Here are the pros and cons of digital billboard.

Digital Billboard Pros

Extra revenue.  Instead of getting $1,500/month in revenue for a 14 by 48 billboard you can get $6,000-8,000/month by renting 6-8 flips at approximately $1,000/month.

Remote management.  You can change copy via the computer instead of having to pay $350 to put up vinyl each time you change an ad.  You can also monitor the boards performance via the computer instead of having to physically inspect the sign.

Public Service Ads.  A digital board can help you create goodwill in your community by running amber alert ads or using unused inventory for public service ads.  You can change copy easily and cheaply.

Digital Billboard Cons

Extra Capital Cost - A digital billboard will cost $200,000-250,000 to purchase and install.  That's approx 6 times the cost of a regular billboard.  The extra cost means you should only convert your best locations to digital.  

Obsolesence - You should assume that a digital billboard will have a 10-15 year useful life.  By the end of that time you will probably need to replace it because it will be technologically out of date.  Think about how poor the digital signs which are 15 years old look versus the current generation of signs.  

Extra electricity - A digital sign will be more expensive to light than a regular billboard.