Lisa Chow is the economics reporter at WNYC. She tries to explore in her stories surprising aspects of New York’s many economies—in plain view or hidden, in neighborhoods or sectors.
Outdoor Ads: The Most Valuable Billboards in the World
Thursday, December 30, 2010
Between the shop windows of Macy's and Saks and the excitement of the ball dropping in Times Square, New York is a magnet for tourists in December, drawing on average 5 million visitors. With all these people walking the city streets, businesses know it's the perfect time to grab their attention with outdoor ads.
Which billboard in all of New York is the most valuable to advertisers?
John Connolly is chief operating officer of Kinetic North America. Kinetic helps big companies -- including movie studio Warner Brothers and candy maker Mars -- find the best spots to place outdoor advertisements.
"There's absolutely no doubt in my mind the most valuable billboard real estate space in New York City is in Times Square," Connolly said. And specifically on two properties: One Times Square and Two Times Square.
One Times Square is an iconic location, located at the corner of 43rd Street and Broadway. It's best known as the place where the ball drops each New Year's Eve. Covered with the most expensive billboards in the world, the 25-story building sports company names like Toshiba, Budweiser and Dunkin Donuts.
"We've already gotten significant visibility," said John Costello, who's in charge of marketing for Dunkin Donuts, the biggest chain store in New York City. The Dunkin Donuts billboard, which prominently features a Dunkin Donuts cup in front of a city skyline, was erected in June.
Costello said Dunkin Donuts decided to invest in the location to enhance the company's brand nationally and globally. With an estimated 500,000 people walking through Times Square every day, in addition to all of the postcards, tourists' photos and live shots on TV, images of the Dunkin Donuts ad multiply quickly.
And Costello paid a price for that visibility, although he wouldn't say how much. Neither would one of the owners of One Times Square, Sherwood Outdoor. They say the price is confidential. But others in advertising say companies will pay as much as $4 million a year and commit to 5- to 15-year, non-cancelable contracts to secure one of the 12 coveted spots on One or Two Times Square.
Coca Cola has been on Two Times Square for almost 80 years, accompanied by Samsung for 20 years. The Fortune 500 companies are buying one thing: a location that millions of people will see.
Many say a billboard in Times Square is like a TV ad during the Superbowl.
Advertisers can also do some local targeting, since Times Square is home to the offices of several big companies, including Morgan Stanley, Barclays, Viacom and ABC. "A product or brand that wants to get in front of the Barclays constituents -- whatever you want to call them -- is here. You can do that," said Michael Steinberg, vice president of sales and marketing at Clear Channel Spectacolor, which manages about 40 percent of the billboard real estate in Times Square.
And outdoor advertisers are becoming more strategic in their placements of billboard ads.
"We have a database of every single sign location in New York City," said Connolly. "We can target virtually any consumer in New York City. And we have clients who say, 'I want a sign in front of every single one of my competitors stores.' We do that."
With the shift to digital screens, companies can change their ads based on location and time of day, sort of like the Web. That's caught the attention of internet-based companies. Google bought a billboard in New York this fall, advertising its advertising services. Where else? Times Square.