NEW YORK – As corporate office towers were planned on Times Square in the 1980s, preservationists who were worried the Great White Way might go dark turned off all lights except one with a message to Ed Koch: “Hey Mr. Mayor, it’s dark out there. Please keep the lights on in Times Square.”
Thanks in part to the protest, Times Square landlords have been required since the late 1980s to have advertising on their buildings, said Carol Willis, director of the Skyscraper Museum.
Almost 30 years later, Times Square signage has become an arms race between real estate developers, with ever-bigger, ever-brighter displays. Tuesday, Vornado Realty Trust will fire the latest shot when it switches on a 330-foot (100-meter) digital billboard wrapped around the front of the Marriott Marquis Hotel on Broadway between 45th and 46th streets. The eight-story tall sign, which will be leased by Google from Nov. 24 into January, is more than half an acre in area.
“What’s occurred over the last few years is the price of signage has come down, the technology has become better, and the ability to curve signs has occurred,” said Leo Kivijarv, vice president of research for PQ Media of Stamford, Connecticut, which tracks the digital-advertising market. “The real estate market in Times Square has changed hands quite a bit, and to justify some of the high prices, they want to have digital signage.”
Ads on the screen are being marketed for at least $2.5 million for four weeks, according to a person familiar with the sales effort, who asked not to be identified because the figures are private. A Google spokeswoman, who confirmed the company will advertise on the sign through New Year’s, declined to comment on the price it is paying, as did a spokeswoman for Vornado.
The New York Times reported the deal with Google, and the pricing of more than $2.5 million, earlier Monday, citing unnamed marketing executives.
For developers, LED signage can add an extra layer of income by selling space for moving images to multiple advertisers. That can yield six to 12 times the revenue of a static sign, Kivijarv said.
The 26,300-square-foot (2,440-square-meter) sign supplants the multipanel, 15,000-square-foot display on American Eagle Outfitters’ Times Square store as the biggest, according to Tim Tompkins, president of the Times Square Alliance. The American Eagle sign, developed by SL Green Realty Corp., New York’s biggest owner of office buildings, is just north of the Marriott Marquis, and dominates Duffy Square, where the TKTS booth that sells discount Broadway show tickets sits.
SL Green also owns 1515 Broadway, the home of the Viacom Inc. network of media brands like MTV and Paramount Pictures, which has a pair of digital signs at either end.
The massive displays are “a very different thing than having this kind of ad-hoc collage of miscellaneous signs, like a stamp collection,” Willis said in a phone interview. “That was the essential character of Times Square, that was written into law.”
Times Square has inspired cities around the world to use a concentration of brightly lit advertising to draw tourists. In September, the Indian government proposed creating a hub for culture and entertainment in Mumbai’s Kala Ghoda district, modeled on Times Square. In Piccadilly Circus, a London crossroads with a similar cluster of electric billboards, a full-motion screen which had promoted Japanese electronics company TDK Corp. for 24 years was offered for lease last week.
The developers of the Marriott Edition Hotel at 701 Seventh Ave., two blocks north and on the other side of the square from the Vornado sign, plan an 18,000 to 20,000-square-foot sign that will wrap around the corner of the 39-story tower. The project is a joint venture of a group that includes developer Steven Witkoff, Winthrop Realty Trust, and Miami investor Howard Lorber, with lending from Barry Sternlicht’s Starwood Property Trust and iStar Financial Inc.
The sign it is planning “will be a game-changer,” Witkoff said in an interview. Their sign will enable them to broadcast a National Football League game or a concert, with bands of advertising running across the screen, he said.
Regarding Vornado’s sign, he said, “what’s good for them is good for us.”
In June, SL Green paid $41 million for 719 Seventh Ave., on the same block as the Edition project. The company plans to demolish the existing building, which contains a smattering of souvenir shops and a deli, and “take full advantage” of its potential for as much as 28,000 square feet of retail and “highly coveted LED signage towers,” it said in a statement at the time.
Rick Matthews, a spokesman for SL Green, declined to comment on the company’s plan for the site.
For Vornado, one of New York’s largest commercial landlords, with 2.4 million square feet of stores and almost 20 million feet of offices, the mega-sign is the centerpiece of what it has described as a $140 million, 50,700 square-foot makeover of the Marquis hotel’s retail space.
The New York-based real estate investment trust leased the hotel’s retail portion in 2012, part of an effort to “dramatically improve the hotel’s presence on Times Square” Marriott parent Host Hotels &Resorts Inc. said in a statement at the time.
Advertisers also are exploring ways for visitors to interact with the boards through their smartphones, Kivijarv said. The square attracts about 300,000 pedestrians a day, rising as high as 460,000 on its busiest days, according to the Times Square Alliance, an organization of area businesses.
Vornado controls almost 160,000 square feet of retail space across the street from the Marquis at 1540 Broadway, whose tenants include the Disney Store and Forever 21, which has a mix of animated and static signs. According to its most recent annual report, its signage revenue rose to $32.9 million in 2013, from $19.8 million two years earlier.
Kivijarv said he’s not convinced the trend toward bigger, more expensive signs raking in ever more revenue will continue. There’s no clear connection between more pricey digital advertising and sales, he said.
Once, when he was about to give a presentation on digital signage at a Times Square hotel, he said he did a slow 360- degree turn while standing on the sidewalk, then another in reverse. Then he closed his eyes, and tried to recall which sign really stood out to him.
“And the thing I remembered was the Naked Cowboy,” he said, referring to an entertainer who plays the guitar on the square, clad only in underwear, cowboy boots and hat.
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