Question

Billboard advertising in Times Square has become so popular that space has already been sold for the next 10 years. Coca-Cola, General Motors, Toshiba, Prudential, NBC, Budweiser, and The New York Times pay rates in excess of $100,000 per month to hold these spaces. Why would companies pay so much for outdoor advertising? What are the advantages and disadvantages of purchasing billboards at Times Square?

Answer 1

Advertising in Times square:-

On average there are nearly 380,000 pedestrians that go through every day, including another 115,000 drivers and passengers. On busy days, this can go up to 460,000 people. This makes it one of the busiest tourist attractions in the world, meaning a Times Square ad can reach a wide audience. For marketers, Times Square advertising receives roughly 1.5 million impressions day-to-day. If you factor in the New Year's Eve ball drop, when more than a million people crowd the area, and the numerous incidental appearances in movies and on television shows, those impressions are upwards of 150 million per year.

It costs between $1.1 and $4 million a year to buy advertising space in Times Square. In contrast, a Times Square billboard cost for a day can start at $5000 and go up to well over $50,000. Moreover, it can cost up to $3 million per month to advertise on Time Square's largest billboard. The average cost per impression for a billboard advertisement for the rest of America is much lower, ranging from 0.2 to 0.5 cents. Is putting up an expensive electronic billboard in Times Square nevertheless a cost-effective method of advertising?

Let's see how this cost compares to other forms of advertising. The majority of online advertising platforms, including Google AdSense, LinkedIn, and Facebook, offer a pricing model based on cost per views or impressions. These cost-per-impression (CPM) systems vary in cost based on a website's popularity and how often ads will be run. Typically CPM counts cost per 1,000 impressions (the 'M' stands for mille, Latin for that number). When using a CPM billing model with Google Ads, a single impression can cost 0.4 cents, making a Times Square billboard 4.25 times more expensive.

A 30-second spot during the 2020 Super Bowl cost $5.6 million and reached 99.9 million viewers. That gives it a rate of around five cents per impression – and for an advertisement only shown once.

Advertising in Times Square, one of the world's most trafficked tourist attractions, commands a relatively high price per impression compared to billboards placed elsewhere in America. Surprisingly, based on cost per impression, Times Square ads compete with traditional media but are more expensive than online advertising alternatives. However, companies that advertise by placing an electronic billboard there are paying a premium the same way that advertisers pay up for big sporting events such as during the Super Bowl. Compared to a 30-second spot during the big game, however, a Times Square billboard could be a good bargain.

Since Coca-Cola’s first appearance in Times Square nearly a century ago, the brand has been a leading innovator, from creating one of the famous intersection’s first neon signs to being one of the only installations with a nighttime light display in the early 1990s,” said Coca-Cola Archivist Ted Ryan. “Times Square – like Coca-Cola – is timeless and connects people from all walks of life.’”