Forecasting Billboard Advertising Revenue

Which Billboards Pay The Bills?

Billboards generate revenue from traffic—the more people see them, the more money they make. When the pandemic hit, consensus was the billboard business was going to see a rough year. And in some ways, that prediction took, but precisely how bad, for how long, and for which billboards, consensus dared not say. That’s where System2 came in.

Taking Apart Traffic

Figuring out who sees which billboards is tricky. Figuring out how to track changing traffic patterns and measure their impact on who sees which billboards is even trickier. Billboard companies have different inventories that vary by location and type. “Traffic” is a mix of commuters, roadtrippers, drivers, pedestrians and mass-transiters. The pandemic itself impacted traffic differently depending on time and place. Finally, time was of the essence, since we didn’t want to wait for the billboard companies to tell everyone precisely how they were doing in the pandemic. 

A Better KPI

System2 tackled the question as per usual: it dug in to understand the business, sourced, cleaned and joined multiple data sets, including location, traffic and inventory data, mixed in some math and code, and developed the entirely new KPI “weighted traffic score.” System2 then created a dashboard of visualizations in its interface, Delphi, that disaggregated by company, region and other key variables to pinpoint precisely where, how and to what extent traffic changes impacted revenue. System2’s solution also made it clear which billboards were vulnerable to what kinds of traffic changes on a go-forward basis. 

Beating Consensus 

Consensus said that billboard revenue would take a hit. System2 turned a consensus hunch into actionable intelligence that showed (among other things) that not all revenues would be impacted the same and that some would rebound more quickly than others. Ten months later, consensus finally caught up to System2. Share prices among the competing companies finally diverged generating a significant premium to investors who followed the data.