Billboards for Web Hosting Companies

Driving around Atlanta recently I’ve see several large billboards for web hosting companies — yes, web hosting companies. Do they know something I don’t know? Since when did old fashioned billboards on the side of the road generate a better return on investment (ROI) when compared to online advertising? Here’s my theory: web hosting is so competitive, and has such low barriers to entry and obvious need, that the traditional online lead generation routes don’t have an appreciable ROI. Web hosting companies that continue to do the online advertising do so to get greater economies of scale so that these new customers eventually will be profitable. And, that’s why they are trying out billboards.

Oh, and here are the companies that are advertising:

• HostGater.com, which just acquired the Atlanta web hosting company A Small Orange
• ThePlanet.com, which has an ad that says they take the “SH” out of “IT”