Is Offline Undervalued?

Every year, 40 million people walk in and out of Piccadilly Circus underground station in London. That’s 770 thousand a week, 110 thousand a day, every day. That’s a lot of footfall, but also potential eyeballs.

You can actually rent a retail shop in Piccadilly Circus station for £1,500 / week. To keep it simple, you could just hang a large billboard in front of the shop unit, so you don’t have to bother about fitting it, staffing it, stocking it etc.

Now, assuming that all 770 thousand people walking in and out of the station on a weekly basis look at your billboard, that’s costing you just shy of £2.0 CPM (£2 for every 1,000 impressions).

Let’s say you wanted to buy 770 thousand impressions online from an audience that is similar to the people that pass through Piccadilly Circus every day (i.e. 50/50 men/women, ABC1, shoppers, tourists, 18-40,  professionals). That’s likely to cost you a lot more than £2.0 CPM. For example, the Mail Online, world’s largest online news site (with close to 200 million monthly UVs and an audience somewhat comparable to the Piccadilly crowd) charges anywhere between £20-50 CPM for ad space on its web property.

I’ve made the assumption that all people walking through the station would look at the billboard, which is obviously optimistic. However to achieve a CPM comparable to the online CPM only 4-10% of the people would have to look at the billboard, which feels quite conservative given people have to walk by it to get in an out (I for example always look at ads in the tube and at stations, I suspect I am not the only one).

I have also assumed for simplicity that one would just hang a billboard in front of the shop, which would not attract higher than average attention from the crowd. In reality, with a little investment, the unit can become an interactive billboard where potential customers can walk, touch and feel the products, talk to staff and buy.

Overall it feels like there is an opportunity for online businesses to leverage flexible offline retail presence to drive impressions at attractive CPM rates, with the upside of the human interaction.


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