THE COST OF ADVERTISING ON TIMES SQUARE
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May 9, 2005
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THE COST OF ADVERTISING ON TIMES SQUARE
Behind the Scenes of America's Most Famous
Billboards
May 09, 2005
QwikFIND ID: AAQ54O
By Abbey Klaassen
NEW YORK (AdAge.com) -- It is a signature of America's marketing and
financial prowess, a world-famous tourist attraction and one of the country’s
most coveted marketing communications venues: Times Square. Awesomely
bright and shamelessly gaudy, its billboards towering above the Broadway
and 42nd Street neighborhood are also among the country's most effective -and most expensive -- advertisements.
But how much do they cost and are they
worth it?
Consider this: While 30-second Super
Bowl commercials cost $2.6 million each
and reach 80 million people, the One
Times Square tower draws 211 million
pairs of eyeballs when the New Year’s
Eve ball drops, according to the president
of Sherwood Outdoor, Brian Turner. “We
like to think of [the Super Bowl] as just a
tailgating party,” he said.
Photo: Darryl Estrine
$325,000 a month
Like many involved in the buying and
selling of Times Square ad space, Mr.
Turner is circumspect about the daily
financial details. He wouldn’t comment on
advertising prices at One and Two Times
Square but industry estimates peg the
monthly rates for the 11 spaces on the
two landmarks at $200,000 to $350,000
each.
Caption Here
According to media sellers, the rental
prices for ad real estate varies widely
depending, in part, on size and -- like everything else in Manhattan -- location.
Electronics giant LG is said to be paying $165,000 per month for its
corner-wrapping placement space above Planet Hollywood at 45th street and
Broadway. The Mountain Dew sign just below it goes for $175,000 a month.
Washington Mutual's six-story-high three-dimensional display of a giant
beanstalk section topped by a castle costs $165,000 a month.
Of course, those prices cover only the rental space and not the price of the
physical sign or its supporting technology -- costs that regularly rise into the
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millions for the customized, weatherproof, high-definition LED sign displays
that have become so popular. At 135 feet long and 26 feet wide, the J.P.
Morgan Chase sign at the base of the Reuters building at 42nd Street and 7th
Avenue, for example, was a $10.3 million investment. It boasts 10 times the
resolution of the average TV set.
Since 1935
Most ad buys in Times Square are long-term, multiyear deals, although some
movie studio and TV network ads appear for just a month or two, according to
sellers. At the famous One Times Square, for example, marketers sign on for
10-year stints -- although the Coca-Cola Co.'s sign on Two Times Square has
been there since 1935. Several other
marketers, including Wm. Wrigley Jr.
Co.'s Wrigley brand, Planters nuts and
Anheuser-Busch's Budweiser have had
longstanding presences in the area, but
have moved around to different spots.
Incumbency in the area is a powerful
advantage. Target Corp. recently bought
all nine billboards for a total of 23,000
square feet on a newly constructed 42nd
Street building called Times Square
Photo: Darryl Estrine
Tower. The impact of the unprecedented
Caption Here
deal has been lauded by many in the
industry as one of the best outdoor buys
in recent time and it’s highly unlikely the retailer will give up its incumbency
any time soon -- thanks to the low odds of again being able to acquire so
many concentrated spots.
The long-term deals also help justify the multimillion-dollar production costs
for the high-tech automated and electronic boards.
Impact of technology
“As the tech grows so does the space,” said Jessica Coates, spectacular
specialist for Viacom Outdoor. “If it’s a single ad unit -- LG, Pepsi, AT&T, Con
Ed -- those are a long-term leases anywhere from 10 years on. But they’re
constantly changing out the creative and technology to keep up with the
times.”
Times Square draws 40 million annual individual visitors -- roughly equivalent
to 14% of the U.S. population. Kodak estimates the area’s in more than 100
million snapshots a year. If the Times Square were an Arbitron metro media
market, it would rank No. 152, right there between Rockford, Ill., and
Flagstaff, Ariz.
The prime billboard neighborhood stretches north-south from 53rd to 41st
streets and east-west from 6th to 8th avenues. Aside from building-sized
advertisements, it also boasts a work force of 274,000 and includes
entertainment, finance and media companies, counting ABC studios, Ernst &
Young and Conde Nast Publications
among its residents.
Microcosm of global business
“It’s a microcosm of global business,” said
Michael Steinberg, vice president of sales
and marketing for Clear Channel’s
Spectacolor division. And that influx of
business has made Times Square a place
for targeted ad buys as well as ego buys.
“You can put a sign in front of Lehman
Brothers and Morgan Stanley for less
than what you’d probably pay to run in a
monthly trade that covers the financial
industry,” Mr. Steinberg said.
Photo: Darryl Estrine
Caption Here
The overall annual Time Square
advertising business is estimated to be
worth $69 million, in a market dominated
by outdoor players such as Viacom, Clear
Channel, Sherwood, Van Wagner and
Vista Media. Cost-per-thousand-viewers
impressions for the area range from $2 to
$5, compared to around $20 for a
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prime-time network TV buy. Individual monthly rates vary as well, depending
on a variety of factors: Is the sign directly across from a busy subway stop?
Can it be seen from MTV’s Total Request Live studio? Does the sign make it
on the annual New Year’s Eve broadcast?
Immeasurable bonus impressions
Then there’s the immeasurable bonus impressions through residual media -on TV shows like CSI: New York, in movies, magazines, newspapers,
postcards and coffee table books. “You watch the 6 p.m. news and you have
two major TV networks broadcasting from Times Square -- ABC and MTV,”
said Tommy Turner, senior vice president and partner of Van Wagner
Outdoor, which has had a longtime presence in the area. “That’s legitimate,
even if it’s incalculable. It’s people from Peking to Minneapolis.”
Source:
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