The Formetco Replace Your Face
Financing Program
—Why the industry needs this
Brent Baer, Publisher OOH Today
On February 1, Formetco introduced a complete turnkey digital billboard replacement offering to enable out of home companies to easily replenish their aging digital signs. Called ‘Replace Your Face’, the essential core of the program is the financing opportunity which covers nearly every expense in replacing an aging and ineffective digital billboard display.
OOH Today shared a brief Q and A period with Formetco’s management team.
Gentleman, thank you for taking the time to discuss this, shall I call it, ‘a groundbreaking move for out of home’s digital manufacturing space?’
OOH Today: Let’s start out by asking; What do you believe the market size is to replace aging digital billboard faces?
Formetco: There were 3200 active displays in 2011 and 9600 today according to the OAAA, with an average of 650 a year after 2011. This data shows this program will be strong for a long time.
OOH Today: How do I know my digital sign is aging and needs replaced?
Formetco: Initially you will run into the following issues:
- -parts aren’t offered any more
- -high labor and parts cost
- -lost revenue due to performance and appearance
- -high power cost
OOH Today: Is the replacement program specifically for replacing Formetco digitals?
Formetco: No, this program is geared towards Independent Operators who are looking for a financing solution for their aging digital displays and is for any digital billboard.
OOH Today: How will the replacement sign be different than the one being replaced?
Formetco:
Simple fundamentals will be;
-Longer warranties:
- 10 year parts and brightness
- 5 year labor warranty
-More energy efficient. Our average power bill is $250 a month for a 14×48.
OOH Today: Is this a new program or has Formetco always provided financing?
If new, why now? If ongoing, what is new?
Formetco: This is an industry first program that offers that financing for the whole project. We are financing the digital unit, takedown/disposal, installation and electrical.
OOH Today: Please give us the bullet points of ‘turn key’ replacement. What does that mean?
Formetco: We will be financing all parts of the replacement process.
a. takedown
b. installation
c. disposal
d. electrical
e. the digital display
OOH Today: Let’s talk specific money. You mention low payment in your promotional literature, please define low monthly payment?
Formetco: Allow us to relate via an example of a recent replacement we provided. We had a new client who had a single 14×48 face he purchased from another manufacturer just under 10 years ago. He was paying nearly $700 per month in power, over $1,00 per month in parts and labor and lost $650 last month in down time credits and discounts for a client. This added up to $2,400 per month he was spending to maintain this old sign. With The Replace Your Face program we were able to offer him a new FTX 14×48 with 10 years Parts and 5 years of labor including removal of the old display, delivery and install of the new display along with the electrical for a payment of just under $2,800 per month with no money down. His parts, labor and downtime credits will be gone, and his new power bill will be down to about $230 per month.
OOH Today: Just how easy is it to get financing?
Formetco: Some loans can be approved within hours but most are approved within 48 hours.
OOH Today: Why work with you rather than a bank?
Formetco: If you have a line of credit with your bank you may choose to use it for an acquisition or new digital development. This program just gives you more flexibility and also some Banks don’t understand the outdoor advertising industry.
OOH Today: Why not one of those loan shark investors out there, who loan money then take over your billboards when you default?
Formetco: Existing digitals have a history of revenue stream and time in business that would qualify them for this program.
OOH Today: In ‘tear down’ and install, does Formetco has its own crew to complete the work?
If not who do you use?
Formetco: We do not have our own crew as we would contract with one of the industry’s trusted installers. Most of the time our customer has their installer they want to use.
OOH Today: How long can I expect replacement to occur once signed agreements are in place?
Formetco: Anywhere from 4-8 weeks depending on the size of the project.
OOH Today: What is your projection of growth with this new program?
How long do you anticipate to continue it?
Formetco: As we mentioned earlier, there were 3200 digital displays in 2011 and today there are 9600 according to the OAAA’s records. We’ve already increased our market share with new digital locations and now combining that growth with our new Replace Your Face program, Formetco is very excited about the future of digital.
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