Know-How Exchange : Other

Take the your average order value. Find your average order value profit and divide it by the cost of the billboard. X extra sales = cost of billboard.

Billboards are primarily used for branding exercises. If you expect additional sales from your billboard campaign then put in a free phone number and a different domain name. That way you can have a full analysis of exactly how sucessful your campaign will or wont have been.

Unless of course the billboard happens to be directly next to your shop.

Also remember this one rule, if the billboard hasn't been taken by a national company already, then why.

Good Luck

First you have to know the lifetime value (i.e., the present value of future profit) from the average new customer. Then you divide that number into the monthly cost of the billboard. That will give you the number of new customers you will have to get each month as a direct result of the billboard.

Of course, there are a few complicating factors.

First, it's not reasonable to expect the billboard to motivate a purchase immediately after one viewing. It may take 10 or 12 viewings, or more. And it also depends on the purchase cycle for your product or service. If you're selling milk or eggs, it could be less than a week. If you're selling refrigerators, it could be years or even decades.

And then there's wear-out from too many repeated viewings. After someone sees the same ad every day for 6 months, they're not likely to notice it nearly as much as they did the first few weeks. (That's why you may want to have fresh creative every few weeks.)

But the most important factor of all is the creative -- art and copy. Great creative can offset most problems, and lousy creative is always a waste of money. I'd take a chance if the creative is brilliant; otherwise, I'd be careful. It's not going to be easy to measure the ROMI accurately. This may require an element of faith.

And placement. Just because a billboard is available doesn't mean it's in a good spot for you. Often it's just based on which farmer is willing to give up some land.

You also have to figure out what your target ROI is. 10:1? or 2:1? Both are profitable but what's the best use of your cash?

Michael