BUANASENI

 

BRIEF COMPREHENSION OF THE BILLBOARD INDUSTRY IN MALAYSIA

By Johan Ishak

16 August 2025

BILLBOARDS, or Out of Home (OOH), is a conventional method of advertising that has survived technological advancement, so much so that it is also a contemporary method that is not directly affected by the crazy blind rush for the digital and internet platforms such as Facebook, Instagram and TikTok. 

The process to set up billboards is more tedious in Malaysian than in its neighboring countries such as Thailand, Indonesia and Vietnam. Klang Valley being the most complex. Lots of agencies to deal with such as the Local Councils (eg. DBKL), the Highway Council, the Language Council (Dewan Bahasa dan Pustaka), the Land Department, the Civil Works Department (JKR), and of course, private land owners if that is the case for the land ownership where the boards are to be erected.

If the content of the advertisement relates to some specialise area, such as banking, then approval of certain elements may need the Reserve Bank's (Bank Negara Malaysia) approval. Language wise, it has to accomodate Bahasa Malaysia. So, if you want it to be in English, then the Bahasa Malaysia translation needs to be there too. In the case of digital billboards, you have the option of sequencing different language versions of the advertisements that are typically 15 seconds each.

The economics of the billboards differ between the static ones and the digital ones. The static version involves printing that costs RM10 to RM12 per square feet. It stays there permanently until the end of the advertisement campaign. Some billboard owners choose to not peel it out after the campaign as a blank silver board looks horrible. So, the client gets free airtime!

The digital bilboards, or often referred to as the LED OOH, requires electronic and communication links so that the 15 second advertisement videos can be uploaded. The videos are rotated after a series of advertisements typically capped at just 8 to 10 clients to ensure brand dilution or visibility of advertisements are not impaired. Normally owners of LED OOH do not charge electricity unlike the static boards that do charge electricity to its clients.

The market share of revenue for OOH has been "stolen" by the likes of Facebook, Instagram and TikTok but not as significant as what its sibling platforms are facing, namely Television, Radio and the worst, Newspapers. OOH business model can still work in this modern digital era but best if campaigns are sinergised to use multiple media platforms, an omni-presence per se.

Prices face stiff competiiton as OOH owners throw crazy discounts as high as 50% of the published rates. If this is not self-regulated by the OOH industry players, it may see a downward spiral into an industry disaster. Having said that, the pressure of cheap advertising prices by social media and the digital platforms pretty much warranted the crazy discounts in the first place.

Prices for OOH space can fetch a premium level if it has the necessary ingridients. Size matters but, as real estate agent often shout, Location! Location! Location! is the mantra. Hence, if Television and Radio have statistics from Nielsen or Kantar, OOH requires at least road traffic statistics as well as footfall staristics for indoor OOH sites. There is no one specialised industry surveyor for eyeball measurement which makes the OOH industry not united for that matter. So, the individual OOH owners do their own surveys. 

Variable costs such as printing and electricity is easy to be managed. The killer would be maintenance cost and the capital outlay to build the boards in the first place. An LED OOH, say 80 feet by 40 feet, may need up to RM1 million. A static board of the same size would probably fetch a cost of RM500,000.

Therefore, achievement of the minimum volume of campaigns by clients that can reach the equilibrium of the adequacy of gross margin to cover the fixed costs is crucial. Capital outlay is considered as the biggest fixed costs that are typically amortised over a technical useful life of 5 to 7 years.

The composition of the advertising industry in Malaysia has Digital as the No.1 ranked source, followed by Television and Radio. A decade ago OOH was behind all of these including newspapers. Today it is ranked 3rd. I suspect, pretty soon, it may just overtake Television and becomes No.2 that will always work in a symbiotic manner with its younger Digital nemesis. In the end, we shall probably see a duopoly like the titan couples, Coke vs Pepsi, BMW vs Mercedes, Apple vs IBM, or even Liverpool vs Manchester United.

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