Back in 2019, a little-known, two-year-old startup by the name of Brex descended on San Francisco.
It was not shy about announcing its presence. The fintech slathered the city’s billboards and bus stops with the eye-catching message, “This will catch your interest,” as it declared itself the “first corporate card for startups.” It spent about $300,000—cheap by San Francisco standards—to snap up over 50% of the ad inventory for three months in the area around Jackson Square, the heart of the city’s historic business district.
It was a somewhat paradoxical sight.
Startup world is the domain of tech-forward ideas. But here was Brex, going all-in on old-school marketing. The ad campaign got plenty of reaction—both good and skeptical. More importantly for Brex’s business, it worked.
“It supercharged our growth,” CEO Henrique Dubugras said of the campaign, noting customers responded more to their sales pitches after billboards went live. “Brands that are real world have more trust than those that are purely online.”
Turns out, the strategy to cover this part of San Francisco in its branding was so novel and aggressive that the company, which started as a corporate credit card business focused on the tech community, is now almost synonymous with it. And the dividends of such campaigns—in ad parlance, those designed to get your attention when you’re out on the streets are called “out-of-home media”—continue to pay off. Brex launched an outdoor ad campaign earlier this year in cities such as Miami, Houston, and Washington, D.C., and received coverage from Business Insider, along with TechCrunch.
“Brex billboards have arrived in Miami,” Monica Simo Black, founder of venture capital investing firm Function, quipped in a June tweet. “Guess we’re a real tech city now.”
Now the startup even has an employee specifically tasked with managing Brex’s out-of-home media campaigns. For good measure, he also advises Brex’s customers on devising their own out-there advertising strategy as an added incentive for companies to stick with Brex.
Brex, now worth $7.4 billion, has turned its billboard experience into part of its business.
Business is brisk on Route 101
Brex is hardly the first newbie brand to embrace this kind of publicity. Throughout the late 1990s, and even after the dotcom bubble burst a few years later, a neon Yahoo! billboard lit up the San Francisco night sky just off Interstate 80. Today’s startups continue to be huge fans of big physical advertising space even as they are trying to figure out how to advertise in the metaverse.
For many tech startups, getting on the stretch of U.S. Highway 101 is a rite of passage, says Rob Shilling, San Francisco general manager for Outfront Media, which manages billboard advertising in the city: “For a lot of the tech firms, they have made it when they have a billboard on the 101.”
After raising $115 million in January, for instance, news app maker News Break could be found overhead while you were zooming down the freeway. And high above the streets of downtown San Francisco, Hive’s brand was visible throughout the spring. In April, the cloud-based A.I. startup secured an $85 million funding round, a good chunk of which went to “increased investment in sales and marketing.”
Last year, the out-of-home advertising market—which includes billboard ad spending—declined dramatically across the country as demand collapsed during the first wave of lockdowns. Even still, startups, tech companies, and other advertisers continued to put their name up high on the 101 “because it is such valuable real estate, and advertisers aren’t willing to risk losing that spot on the freeway,” Shilling says.
For most startups, in-your-face brand visibility along Route 101 primarily is about targeting key decision-makers in a company that might be traveling to Silicon Valley, or to and from the airport. Teampay and ClickUp, for example, have prominent billboard ads in the stretch between San Diego and San Francisco.
Shilling has another theory—the positioning is used strategically to bolster dealmaking. There have been multiple instances, he says, when startups bought ad space just months before being acquired by another big company, or just before the going-public process: “I often wonder if it’s more than just coincidence.”
A rush for “other channels”
A prime piece of billboard real estate along the 101 currently runs about $100,000 for a four-week stint, per data at AdQuick. In the go-go-go 1990s, it could go for many multiples of that. “What I heard was the scenario was literally a bidding war on inventory back then, with rates double where we are now,” says Shilling. “It was nuts then.”
The interest in billboards also comes as companies are increasingly looking for new ways to make a mark on consumers.
In recent years, it’s become less attractive for companies to advertise on Facebook or Google, says Mike Duboe, a general partner at Greylock who previously led marketing for Stitch Fix.
Digital ads there have grown too expensive. Meanwhile, it can be hard to get consumers to pay attention because the ad deluge online is constant. Recent changes to Apple’s iOS system have also made it difficult for advertisers to track ad performance on Facebook—creating speculation that they may reduce their spend there.
“Across the board, everyone is rushing to find other channels on deploying spend,” says Duboe.
Project management app maker ClickUp, for instance, slapped its ad on the sides of city buses in New York, and saw the returns multiply. “We buy ultra super kings on buses,” says ClickUp’s chief creative officer, Melissa Rosenthal, referring to the aptly named ultra-super-king-size ads that cover the sides of buses, “and they get on TV shows like Gossip Girl.” The aim: It gives the company the “highest probability of being a meme,” she says.
While business has continued on the 101, the pandemic, however, has certainly left a mark on the sector.
As companies face hiring shortages, some startups have also turned to billboards as outright recruiting tools, notes AdQuick CEO Matthew O’Conner. Vending machine car startup Carvana, for instance, has used its billboards to call for new blood, noting “consistent work, steady pay.”
And as many workers left major cities for less crowded haunts, billboard advertising has also shifted in that direction, says Bob Schmitt, regional president of Northern California for Clear Channel Outdoor, another major billboard provider. In the Bay Area, for instance, advertisements and campaigns moved from San Francisco to smaller cities such as Santa Clara—communities with high average incomes and, just as importantly, where business decision-makers live.
Beyond the Bay Area, Austin and Miami are now solidly in the 10 hottest markets for out-of-home advertising, per AdQuick data, as these cities have become popular bases for tech startups.
It is perhaps fitting that in February, early Uber investor and Miami-evangelist Shervin Pishevar bought a pair of billboards in San Francisco that displayed a tweet seemingly from Miami Mayor Francis Suarez, reading: “Thinking about moving to Miami? DM me.”
This story is part of Fortune's Brandemic marketing: Going viral in the age of COVID series.
