Digital billboards boost commercial property values

5:00 AM Wednesday July 5, 2017 Colin Taylor

APN Outdoor's 7.2m x 2.4m curved screen in the heart of Auckland’s Newmarket shopping precinct. Photo / Supplied

Digital billboards are adding value to commercial buildings by providing steady and lucrative revenue streams to supplement tenant leases. 

“Strategically located commercial properties both big and small can be prime contenders for digital billboards,” says John Church, national director commercial with Bayleys.

Church says digital advertising is still in its infancy in New Zealand – with the country’s first digital billboards launched only four years ago – but outdoor advertising firms are increasing their digital foothold.

He says the format is known in advertising circles as digital out-of-home or DOOH and it is reshaping the way advertising operates.

“Globally, DOOH is the fastest growing format in outdoor media, with accountancy firm PricewaterhouseCoopers predicting that DOOH advertising revenues will overtake traditional spend by 2020.

“DOOH is seen as a valuable advertising platform because of its ability to reach consumers. Television, radio, or print adverts can be very easily avoided whereas DOOH ads can be situated almost anywhere and audiences can’t turn them off.”

In identifying key billboard sites, influencing factors include traffic counts, lines of sight, demand profiles, likely audience profile and exclusivity or volume of other billboards in the area.

Church says sites are typically assessed on a rate and occupancy formula and then commercial rental levels are determined on an equitable basis. In a number of cases, the DOOH provider maintains the wall or ground area where the digital billboard is located, which also aids the landowner. In most cases, the providers run the compliance programmes, taking on the work, cost and risk toward the mutual betterment of the property.

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QMS NZ's billboard on the side of the Mercure Hotel in Auckland's CBD captures a wide audience on busy Customs St. Photo / Supplied

“Revenue from digital billboards will vary from site to site, but most landlords can expect double the rental for a static billboard. The main value is derived from the annual lease fee and the length of the lease term.”

The biggest DOOH billboard in New Zealand is the three-storey-high, 265sq m screen that wraps around newly renovated 125 Queen St in Auckland’s CBD.

APN Outdoor and QMS NZ are the major DOOH providers in New Zealand and together occupy scores of prime sites in Auckland, Hamilton, Wellington, Queenstown and Christchurch.

Church says DOOH experiences are not restricted to the outside of buildings; digital boards within lobby or foyer areas and lifts can also provide a revenue boost for building owners.

“Although the aim of these boards is to provide building directory information, they can also be a platform for full motion digital advertising and localised content such as news and sport, financial information and weather forecasts.

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Recent advances in technology could see tall buildings beam 200m-tall adverts into the sky.  Artist’s concept supplied / Lightvert

“They are seen as a part of the package for modern, A-grade buildings, bringing a hotel lobby experience to a corporate environment and, although not as massive an earner as large-scale digital billboards or naming rights, they can be used, in conjunction with other facilities, to justify premium rents.”

Church says recent advances in DOOH technology could soon see tall buildings beam 200m-tall adverts into the sky. British media technology company Lightvert has patented a device that will enable advertisers to project large-billboard size images without the need for a billboard.

Lightvert’s technology called ECHO uses augmented reality and high-speed light scanners to project images from reflective strips and can be placed on the side of tall buildings for maximum effectThe imagery is generated using only a single vertical line of light and, as such the image does not exist in reality, but only on the retina of the viewer.

Lightvert, which aims to produce its first commercial units within the next 12 months, says the hardware’s small footprint can get around planning permission barriers and unlock vast amounts of new, high-value advertising real-estate.

The company says ECHO technology will allow the owners of high-rise real estate owners to ‘monetise’ the facade of their building in ways other technologies cannot.

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John Church of Bayleys