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Outdoor advertising

A breath of fresh air

Apr 9th 1998 | from PRINT EDITION

I think that I shall never see

A billboard lovely as a tree;

Indeed, unless the billboards fall,

I’ll never see a tree at all.

SO WROTE Ogden Nash, setting the tone for a whole generation’s attitudes to outdoor advertising. Creative admen went into television and print. Tacky billboards and bus posters were for brainless bores. Now attitudes are changing as more and more of the outdoor advertising industry falls into the hands of multinationals run by people with Harvard MBAs. Consolidation among firms is rapid. In America last year there were $4.5 billion-worth of deals involving outdoor media owners, 80% more than in 1996.

Merger mania is hitting Europe too. Britain’s More Group, an outdoor media firm, is the subject of a contested takeover between two giants of the business: its French rival Decaux and America’s Clear Channel. Shares in Maiden, another British player, are trading at over 20 times earnings in the hope of a bid.

This is a lot of excitement for a small industry. The world outdoor-advertising market—billboards, transport and “street furniture” (things like bus shelters and public toilets)—is worth about $18 billion a year, just 6% of all the world’s spending on advertising. But it is one of the fastest-growing segments, having doubled its market share in recent years.

Outdoor advertising’s appeal is growing as TV and print are losing theirs. Fragmentation and the soaring costs of TV are prompting clients to consider alternatives. Dennis Sullivan, boss of Portland Group, a media buyer, calls outdoor advertising the last true mass-market medium. It is also cheap. In Britain, a 30-second prime-time TV slot costs over £60,000 ($100,000); placing an ad on a bus shelter for two weeks works out at about £90.

Adding to its attractions has been a revolution in the quality and ingenuity of outdoor displays. Famous architects such as Britain’s Sir Norman Foster are designing arty bus shelters and kiosks with backlit displays. Backlighting, introduced in Europe by Decaux and More, and plastic poster skins have vastly improved colour and contrast.

Movement is possible too. Smirnoff used new multi-image printing to make a spider, seen through a vodka bottle, appear to crawl up a man’s back. And Disney advertised its “101 Dalmatians” video on bus shelters that emitted sounds of puppies barking when a laser beam was broken. It led one confused animal-lover to call the fire brigade, says Ian McComas, director at Adshel, More’s street-furniture arm.

This sort of innovation has attracted a new class of advertiser. Recent data from Concord, a poster buyer, shows that in Britain, alcohol and tobacco have been replaced by entertainment, clothing and financial services as the big outdoor spenders. And traditional outdoor advertisers, like car makers, are using it in new ways. BMW ran a “teaser” campaign in Britain exclusively on bus shelters.

Meanwhile a long-time problem, lack of data on the effectiveness of posters, is being addressed. Every poster site in Britain now has a rating indicating how many eyeballs are likely to see it. POSTAR, which does the ratings, uses lasers to pinpoint where people look when they pass a billboard.

Particularly attractive to the new advertisers is street furniture, the fastest growing segment of the outdoor market. It accounts for some 20% in Europe and about 5% in America. Its growth is being fostered by co-operation with local authorities. Specialists like Decaux and More give municipalities free bus shelters and kiosks, plus a host of civic facilities that don’t carry ads, in return for the advertising space.

Pioneered in Europe, such contracts are spreading to America. New York is due to award the biggest street-furniture contract ever—a $1 billion, 20-year deal to install 3,500 bus shelters, 500 news-stands and 100 lavatories. Only the biggest companies, however, can afford the up-front costs of such contracts—which is why smaller firms are shutting up shop or being bought, and others are going public in order to raise capital. Two American groups, Eller and Universal, were recently bought by Clear Channel, and 3M Media and Gannett were bought by America’s Outdoor Systems, the world’s biggest firm in this market.

These companies are in a virtuous circle: as they get bigger they attract better management who bring with them fresh ideas. Roger Parry, More’s chief executive, is an ex-McKinsey consultant. Clear Channel is led by Harvard alumni, and Britain’s Maiden by an American investment banker who has a Harvard MBA. With untapped markets as obvious as a garish billboard, more mergers may be just around the corner.

from PRINT EDITION | Business

Источник: The Economist, http://www.economist.com/node/159785