Anyone who visits Manhattan will recognize the bright signs and billboards that are a hallmark of Times Square. If you've never been there, this landmark piece of New York real estate is often seen in television or film, so you'll understand what the fuss is about. Times Square billboard advertising today enjoys plenty of ad dollars thanks to digital ads that can be instantly swapped out. With that, companies willingly pay out hefty sums to purchase Times Square billboards--perhaps the most coveted advertising space in the nation. These billboards are high-tech installations, glowing with light-emitting diodes (LEDs) and high-definition displays, captivating and distracting all at once.
Advertising in Times Square
According to Times Square NYC, 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. Ads embedded in emails like Gmail can cost 0.5 cents per impression and those embedded in videos such as on YouTube can run 2.5 cents per impression. Typically, internet advertising is a lower cost option for advertisers.
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.
The Bottom Line
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.