Business ideas
8 min read

How to Start a Profitable Digital Billboard Business [11 Steps]

Learn how to start a profitable digital billboard business with these 11+ steps. From market research to advertising strategies, we've got you covered.
Nick

By Nick Cotter
Updated Feb 05, 2024

digital billboard business image
This page may feature products from our affiliate partners, which could influence the products we discuss due to potential compensation. Despite this, our evaluations are impartial, based solely on our independent analysis. The content here is intended for informational purposes and should not be seen as legal advice. For professional guidance, consulting with a legal expert is recommended.
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1. Perform market analysis.

Beginning a digital billboard business requires a thorough understanding of the market landscape to ensure a strategic entry and successful operation. This initial step is critical as it highlights opportunities, potential challenges, and the competitive environment. Here are key aspects to consider:

  • Research the local demand for digital advertising to identify the volume and types of clients likely to use your services.
  • Study current market trends, including the shift towards digital media, to forecast future demand and technological advancements.
  • Analyze the competition, noting their billboard locations, pricing strategies, and services offered to find your unique selling proposition.
  • Understand regulatory requirements and zoning laws for digital billboards in your target areas to ensure compliance and avoid legal issues.
  • Investigate the availability and cost of potential billboard sites, as well as the infrastructure needed to support digital billboards.
  • Examine consumer behavior and preferences within the market to tailor your advertising solutions effectively.
  • Network with industry professionals and potential clients to gather insights and build relationships for future business opportunities.
digital billboard business image

Are Digital Billboard businesses profitable?

Yes, Digital Billboard businesses can be profitable. Many businesses have been able to achieve a high profit margin with digital billboards due to the low cost of purchasing the equipment and the low cost of maintaining them. Additionally, digital billboards can be used to advertise multiple products or services, creating a recurring revenue stream.

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2. Draft a digital billboard business plan.

Starting a digital billboard business requires a well-structured business plan to navigate the complexities of this advertising medium. Your plan should outline key components including market analysis, business model, and operational strategies. Below are essential points to consider when drafting your digital billboard business plan:

  • Analyze the market: Research your local market, identify your target demographic, and understand the competitive landscape.
  • Business model: Decide whether you'll operate on a lease-based model or sell advertising space directly to businesses.
  • Location scouting: Select strategic, high-traffic locations for your billboards, ensuring visibility and compliance with local zoning laws.
  • Technology and equipment: Specify the type of digital billboard technology you'll use, considering factors like resolution, brightness, and energy efficiency.
  • Regulatory compliance: Understand and adhere to all local regulations, including permits and advertising standards.
  • Marketing and sales strategy: Develop a plan to attract advertisers, including pricing models and promotional tactics.
  • Installation and maintenance: Outline the logistics for installing and maintaining your digital billboards to ensure their longevity and performance.
  • Financial projections: Provide detailed financial forecasts including startup costs, operational expenses, and revenue projections.

How does a Digital Billboard business make money?

Digital billboard businesses typically make money through rental fees. Companies, small businesses, and organizations will rent out space on a digital billboard for a predetermined length of time, usually for a fee. This fee is usually based on the size of the billboard, the amount of time it will be visible, and the location. In some cases, billboard owners may also receive a commission for any sales or leads generated from the advertisement. Additionally, some digital billboard owners may offer additional services such as customized content for an additional fee.

3. Develop a digital billboard brand.

When embarking on the creation of a digital billboard business, crafting a strong and distinct brand identity is crucial. This identity will not only set your business apart from competitors but also resonate with your target audience. Here's how to develop a digital billboard brand:

  • Define Your Unique Value Proposition: Clearly articulate what makes your digital billboard service unique. Consider aspects like technology, location, customer service, or pricing that differentiate you from others.
  • Identify Your Target Audience: Understand who your clients are, what industries they work in, and what they're looking for in a digital billboard. Tailor your brand messaging to speak directly to their needs and aspirations.
  • Create a Memorable Logo and Visual Identity: Your logo should be distinctive and scalable to work on various platforms. Develop a visual identity that includes color schemes, fonts, and imagery that align with your brand personality.
  • Develop a Consistent Voice and Messaging: The tone and style of your communication should be consistent across all channels. Whether it's professional, witty, or inspirational, ensure it matches your brand and appeals to your target audience.
  • Invest in Quality Content: High-quality visuals and compelling content on your billboards can showcase your commitment to excellence. Use this content to demonstrate the effectiveness of your digital billboards to potential advertisers.

How to come up with a name for your Digital Billboard business?

The first step to coming up with a name for your Digital Billboard business is to brainstorm ideas. Consider using words that reflect the goals of your business or use a play on words to make it stand out. Once you have a few ideas, you can use an online business name generator to help you find the perfect name. Make sure to check that the name is available in your state and that the domain name is also available.

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4. Formalize your business registration.

Starting a digital billboard business requires not just a great concept and the right technology, but also ensuring that your business is legally recognized. Formalizing your business registration is a crucial step to legitimize your operations and protect your assets. Here's how to get started:

  • Choose a Business Structure: Decide whether you want your digital billboard business to be a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each has different legal and tax implications.
  • Register Your Business Name: File for a Doing Business As (DBA) if you're operating under a name different from your own, or register the name of your LLC or corporation with the state.
  • Obtain an Employer Identification Number (EIN): Apply for an EIN from the IRS for tax purposes, especially if you plan on having employees.
  • Apply for Necessary Licenses and Permits: Research and secure any local, state, or federal licenses and permits needed for a billboard advertising business.
  • Register for State Taxes: If applicable, register with your state tax authority to handle sales tax, payroll tax, and any other state taxes required.
  • File Registration Documents: Submit the necessary paperwork to your state's business filing office, along with any required filing fees.

Resources to help get you started:

Explore key resources designed for digital billboard entrepreneurs to gain insights into market trends, operational best practices, and strategies for business expansion:

  • Digital Signage Federation: Offers industry insights, networking opportunities, and resources for digital signage professionals. - https://www.digitalsignagefederation.org
  • Sign Media Canada: Provides news, features, and case studies on the Canadian signage and graphics industry, including digital billboards. - https://www.signmedia.ca
  • OOH Today: Delivers news and analysis on the out-of-home (OOH) advertising industry, including digital billboards, with a focus on trends and innovations. - https://oohtoday.com
  • The International Sign Association (ISA): Offers education, research, and advocacy for the sign, graphics, and visual communications industry. - https://www.signs.org
  • DOOH Insider: An online publication focusing on digital out-of-home (DOOH) advertising, offering insights, interviews, and strategies for success. - https://doohinsider.com

5. Acquire necessary licenses and permits for digital billboard.

When starting a digital billboard business, it's crucial to ensure you're operating within the legal framework of your location. Acquiring the necessary licenses and permits is a step you cannot afford to skip. Below are some guidelines to help you navigate this process:

  • Research Local Zoning Laws: Check with your local city or county zoning office to understand where digital billboards are permitted and any restrictions that apply.
  • Building Permits: You may need a building permit to erect your digital billboard. Submit your application along with the design and structural details to the local building department.
  • Sign Permits: Many municipalities require a specific sign permit for billboards. This will often involve size, height, and location regulations.
  • Electrical Permits: Since digital billboards require electricity, an electrical permit is typically needed for installation and operation.
  • Business License: Obtain a general business license from your city or county clerk’s office.
  • State Department of Transportation (DOT): If your billboard is near a highway, you may need permits from the state DOT, as they often have their own set of regulations.

6. Open a business bank account and secure funding as needed.

When starting a digital billboard business, it's crucial to separate personal finances from your company's operations and secure the appropriate funding to ensure a smooth launch and sustainable growth. A dedicated business bank account will help you manage your finances effectively, while obtaining funding can give you the necessary capital for initial investments in technology, locations, and marketing. Here are steps to guide you through this process:

  • Choose the right bank: Research banks that offer services tailored to small businesses. Look for one with low fees, easy access to online banking, and good customer service.
  • Gather required documents: Prepare your business registration documents, EIN, ownership agreements, and personal identification to open your bank account.
  • Understand your funding needs: Calculate the initial capital required for equipment, permits, and operational expenses to determine how much funding you'll need.
  • Explore funding options: Consider various sources such as small business loans, investors, crowdfunding, or partnerships to raise the necessary funds.
  • Prepare a solid business plan: A detailed business plan will not only guide your strategy but also be necessary to present to potential lenders or investors.
  • Build creditworthiness: Maintain a good credit score for your business by managing your finances responsibly and paying bills on time.

7. Set pricing for digital billboard services.

Setting the right price for your digital billboard services is crucial for attracting customers while ensuring profitability. Here's a concise guide to help you determine a competitive yet fair pricing strategy for your digital billboard business:

  • Assess Costs: Calculate all costs involved in operating your digital billboard, including installation, maintenance, electricity, and any software or content delivery systems.
  • Market Research: Analyze your competitors' pricing to understand the market rate. Ensure your prices are competitive but also reflect the value of your service.
  • Value-Based Pricing: Consider the value your digital billboard provides to advertisers, such as high traffic locations and audience reach, and price accordingly.
  • Flexible Packages: Offer a variety of pricing packages based on ad duration, frequency, and special features like interactivity or dayparting.
  • Discounts for Long-Term Contracts: Encourage longer commitments by offering discounts for extended advertising contracts to ensure steady revenue.
  • Dynamic Pricing: Implement dynamic pricing for high-demand periods or events that can command higher rates due to increased exposure.
  • Transparent Pricing: Clearly communicate your pricing structure to potential clients to build trust and avoid confusion.

What does it cost to start a Digital Billboard business?

Initiating a digital billboard business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $$174,000 - $347,000 for launching such an business. Please note, not all of these costs may be necessary to start up your digital billboard business.

8. Acquire digital billboard equipment and supplies.

Starting a digital billboard business requires careful consideration of the equipment and supplies necessary to operate successfully. It's crucial to invest in high-quality digital displays and supporting infrastructure that can withstand various weather conditions and deliver clear, vibrant images. Here is a guide to acquiring the necessary equipment and supplies for your digital billboard business:

  • Research and select high-resolution LED displays with robust weatherproofing for outdoor use.
  • Ensure compatibility with various content management systems (CMS) to streamline ad deployment and scheduling.
  • Acquire mounting structures and hardware that are compliant with local zoning and safety regulations.
  • Invest in a reliable power supply and consider backup generators for uninterrupted service.
  • Purchase necessary software for design, scheduling, and monitoring of advertisements.
  • Consider networking equipment for remote access and real-time updates to your billboards.
  • Obtain maintenance tools and spare parts to address wear and tear or technical issues promptly.
  • Explore options for security systems to protect your investment from vandalism or theft.

List of Software, Tools and Supplies Needed to Start a Digital Billboard Business:

  • Digital Billboard Software
  • Content Management System
  • Advertising Platform
  • Content Creation Software
  • Digital Billboard Hardware
  • LCD or LED Screens
  • Video Cards and Drivers
  • Power Supply and Cables
  • Mounting Brackets
  • Protective Covers
  • PC and Network Equipment
  • Servers
  • Routers, Switches, and Hubs
  • Computer Monitors
  • Keyboards and Mice
  • Wireless Network Equipment
  • Installation Tools
  • Drill, Screwdriver, and Wrench Set
  • Cable Ties and Mounting Tape
  • Essential Supplies
  • Paper, Pens, and Pencils
  • Markers and Highlighters
  • Cleaning Supplies

9. Obtain business insurance for digital billboard, if required.

Protecting your digital billboard business with the right insurance is crucial for mitigating risks and ensuring long-term success. It is important to understand the types of insurance that may be required or beneficial for your business. Here are some key steps to guide you through the process:

  • Research Local Regulations: Check with your local government and regulatory bodies to determine if there are specific insurance requirements for digital billboard operations in your area.
  • Consult with Insurance Agents: Speak with insurance professionals who specialize in business policies to get advice tailored to the unique risks associated with digital billboards.
  • Consider Liability Insurance: General liability insurance can protect you from claims of property damage or personal injury related to your billboard.
  • Property Insurance: This can cover damage to the digital billboard itself from events like vandalism, theft, or natural disasters.
  • Business Interruption Insurance: If your billboard is out of commission due to covered damages, this insurance can help replace lost income.
  • Vehicle Insurance: If you own vehicles for servicing the billboards, ensure they are also properly insured.
  • Review and Compare Quotes: Obtain multiple insurance quotes to compare coverage options and pricing to find the best fit for your business needs.

10. Begin marketing your digital billboard services.

Launching a digital billboard business requires attracting clients who are eager to showcase their advertisements on your platforms. Effective marketing of your services will help you reach potential customers and build a strong client base. Here are some strategies to promote your digital billboard services:

  • Develop a Professional Website: Create a website that highlights your digital billboard locations, display options, and success stories. Make sure it's optimized for search engines to attract online traffic.
  • Leverage Social Media: Use social media platforms to showcase your digital billboards in action. Engage with local businesses and create targeted ads to reach your ideal demographic.
  • Networking Events: Attend local business events and trade shows to network with potential clients. Present your services and demonstrate how digital billboards can benefit their marketing strategy.
  • Offer Promotions: Attract initial customers with introductory offers or bundle deals. This can encourage clients to test out your service and see the value in long-term partnerships.
  • Partner with Advertising Agencies: Establish relationships with advertising agencies that can recommend your services to their clients, expanding your reach within the industry.
  • Email Marketing: Send out newsletters and promotional emails to a targeted list of potential customers. Provide insights on the effectiveness of digital billboard advertising and share success stories.

  • Digital Billboard Software
  • Content Management System
  • Advertising Platform
  • Content Creation Software
  • Digital Billboard Hardware
  • LCD or LED Screens
  • Video Cards and Drivers
  • Power Supply and Cables
  • Mounting Brackets
  • Protective Covers
  • PC and Network Equipment
  • Servers
  • Routers, Switches, and Hubs
  • Computer Monitors
  • Keyboards and Mice
  • Wireless Network Equipment
  • Installation Tools
  • Drill, Screwdriver, and Wrench Set
  • Cable Ties and Mounting Tape
  • Essential Supplies
  • Paper, Pens, and Pencils
  • Markers and Highlighters
  • Cleaning Supplies

11. Expand your digital billboard business.

Once your digital billboard business is up and running, expanding your operation is crucial for continued success. Growth can be achieved through various strategies, helping you to reach new markets and increase revenue. Consider the following steps to effectively expand your digital billboard business:

  • Assess your current market reach and identify new areas with high traffic for potential billboard locations.
  • Invest in the latest technology to enhance the quality and interactivity of your digital billboards, attracting more advertisers.
  • Build partnerships with local businesses and advertising agencies to broaden your client base and secure long-term contracts.
  • Explore diversification by offering different types of digital advertising services such as mobile billboards or digital kiosks.
  • Enhance your sales and marketing efforts to create a strong brand presence both online and offline.
  • Ensure your business is scalable by investing in management software to handle increased operations efficiently.
  • Consider franchising opportunities to grow your brand's footprint without bearing the full financial risk.
  • Continuously analyze market trends and adapt your business model to stay ahead of the competition.