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One Billboard, Two Brands. Who Will Win?

The effectiveness of out-of-home (OOH) advertising typically comes down to one central factor: location. However, while the location of a billboard or sign can make or break an ad campaign, the spot you choose can also be a source of contention. Whether it be a message meant to offend the specific audience of people being targeted, the disruptive brightness of a digital billboard or the very brand paying for the space, disputes over OOH ads are numerous.

As we head into the holiday season, one contemporary example of an OOH fight is currently unfolding in NYC. This particular dispute pits two retail juggernauts against each other: Macy’s and Amazon.

An Iconic Billboard

Adjacent to Macy’s flagship store in Herald Square sits a wraparound billboard. Since 1963, Kaufman Realty has been bound by a restrictive covenant prohibiting the firm from allowing any competitor of Macy's to advertise on the billboard. That covenant has remained in effect until just a few months ago. On August 31, 2021, Macy's right to advertise on the New York City landmark expired.

As the covenant’s expiration date loomed, Macy’s alleges to have learned that Kaufman Realty entered into talks with a "prominent online retailer" about renting the high-visibility space. According to Macy’s, there is little doubt that the online retailer is Amazon. Once the expiration date passed, Macy's decided to take legal action, filing a complaint in New York State Court asking that the covenant be declared “in effect, valid and enforceable”.

Battle of the Brands: Old Vs. New

If Amazon is in fact trying to plaster its “smile” logo above Macy’s star, that outcome could signify more than just an OOH win for Amazon. It also serves as the perfect visualization of how the retail industry has changed in the past century. Whereas Macy’s used to be slaying department stores left and right and subsuming them into its empire, Amazon now sits at the top of the retail food chain.

Of course, Amazon has not actually admitted to being the “prominent online retailer”. Moreover, Steven Kaufman, president of the Kaufman Organization, claims that neither Kaufman nor the building’s owner, Rockaway KB, have ever communicated with Amazon about the advertising space.

For Macy’s, the prospect of a direct competitor advertising next to their most famous location — a place millions of people see every year when they visit New York City or watch the Macy’s Thanksgiving Day Parade on TV — is terrifying.

According to the complaint, “The damages to Macy's customer goodwill, image, reputation and brand should a 'prominent online retailer' (especially, Amazon) advertise on the Billboard are impossible to calculate”. It goes on to say, “If Amazon or another competitor were to advertise on the Billboard, the negative impact on Macy’s would be immeasurable”.

Per the terms agreed upon in 1963, the restrictive covenant “runs with the land”, but whether or not the courts uphold that remains to be seen. Oral arguments in the case have been adjourned until mid-December, and as of the beginning of November, nobody — including Macy’s — is actually using the billboard space.

Securing the Right Location

This case underscores just how important location truly is in outdoor advertising, both for you and your competitors. If you have your own questions about obtaining the best locations for your OOH campaign, our media stewards are a great resource. While we aren’t lawyers, we are professional media buyers with 3+ decades of experience at our backs and an unyielding commitment to getting our clients exactly what they want at the best prices. To start planning your next outdoor campaign, contact The Ward Group today.

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