In an effort to clarify some of the complexities that often accompany deciding whether and when to buy new (or upgrade existing) signage, Metro Sign and Awning has now developed what we think of as an important new tool: The Return On Sign Investment Calculator.

This innovative, computerized system lets you specify some of the variables involved in your next signage decision, helps you nail down other variables, and then instantly provides two different views as to whether or not spending that money on new or upgraded signage makes good business sense.

One of those views is a straightforward “Advertising Analysis.” This perspective is both valuable and rare. It allows you to compare the cost of new or upgraded signage to any other advertising investment you might be inclined to make.

Understanding the “Advertising Analysis”

There is a simple reason that business locations with better visibility and more exposure to both vehicular and foot traffic generally rent for significantly more than comparable sites in the same market with less visibility. This premium is largely the result of the extra “advertising” value of the more visible location.

Obviously, a sign in a location where people can’t see it will do little to boost sales for the business it promotes, and so will have essentially no advertising value. But placing a sign where people can readily see it is just one factor in the advertising value of the sign. Its advertising value can vary widely,depending on several relevant factors, including:

• The size and prominence of the sign
• The length of time the sign remains visible to each person, including how many night-time hours it remains illuminated
• Its size, design, and overall ability to attract attention
• The number of people to which it is exposed in a given period of time
• How well the sign projects and reinforces the business’ values and messaging

Some of these factors are necessarily subjective, and are well beyond the scope of this ROI calculator. But others are simple, straight forward, and readily calculated.What’s more, those calculations allow signs to be compared with other advertising channels.

Advertising– whether TV, radio, newspaper, magazine, outdoor, or Internet, to name just a few varieties – is universally analyzed in terms of “cost per thousand exposures,” or CPMs. This number answers the question:

How much are you paying for 1,000 people to see your advertisement?”

Your new or upgraded sign can be analyzed in exactly the same way. The Return on Sign Investment Calculator asks for data on the number of people passing your location, and the operating costs of your new or upgraded sign. Once these are known, it’s a simple matter to calculate the sign’s CPM, which can fairly be compared with the CPMs of other advertising expenditures.

Here’s a chart showing various CPMs:

Source: Morgan Stanley as shared on http://www.slideshare.net/CMSummit/ms-internet-trends060710final

Of course, a CPM is only a basis for rough comparisons. It says nothing about thequality of those thousand exposures, or – more to the point – how likely is it that the people who are exposed to your advertisement are interested in yourproduct or service, in the market for your product or service, or will ultimately buy your product or service.

Every CPM must be considered in the light of who is getting exposed to your advertisement.

For example, regardless of how inexpensive the CPMs may be, a veterinarian will get little value from advertising in a car-enthusiast magazine (or any publication that does not appeal to pet owners).

Nevertheless, in most cases, the chart indicates that you’ll find the very low CPM of your new or upgraded sign makes it a great bargain.

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