The billboard displaces an 11sq m "Crowne Plaza Queenstown" sign that would be relocated above it.
Among opponents are three long-time locals.
Former councillor Erna Spijkerbosch says: "Over the years, various councils, councillors and the community have worked very hard to keep our signage bylaws fairly tight.
"We don't need to turn [the area] into Times Square or something — it's the thin edge of the wedge."
"It's dangerous, too, because people driving down there, their eyes are going to be reading it."
Submitter Bert Chandler, who also calls it a "monstrosity", says what's not needed on "an extremely busy" street is "half a building face like a drive-in movie to take people's minds off the situation they are in".
He notes every other business "up to this point" has had to obey rules on signage size.
Dean Shaw, director of the company behind the billboard, Bigavision Ltd, says: "We identified it as a good spot in that it is a large building so the size of it isn't out of context."
In terms of distraction, "we've commissioned dozens of reports to ensure we aren't creating a distraction, and there are mitigating controls put in place that make sure we are abiding by what is industry standard, and that traffic experts deem is safe".
"Since 2012, digital signs have been popping up all over New Zealand, and they have become commonplace to motorists."
Shaw says there's also technology in the screen that senses ambient brightness and adjusts it accordingly.
"In probably 95 per cent of cases, the digital screen has less glare and is less bright than a static sign with floodlights on it."
His company also offers space for non-profits, he says.