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.
$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.
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 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.
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 Tower. The impact of the unprecedented 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.
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 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."