The biggest changes in outdoor advertising are happening in the least-developed markets, most notably China, famous for having between 18,000 and 100,000 outdoor media owners, depending who you ask, and that's after all the recent mergers and acquisitions.
JCDecaux, one of the biggest outdoor networks in the world, has recently acquired MediaNation, giving it services for the Beijing metro network, two lines of the Shanghai Metro, a 15-city bus network and newspaper kiosks in Shanghai. And, in a joint-venture with Airports of Shanghai and media company Momentum, Decaux also has space at two airports in Shanghai.
Home-grown media owners are also pairing off with one another in search of bigger joint profits that extend a network's reach beyond their base city or province. Focus Media, a network specialising in outdoor LED and LCD sites, recenly listed on the Nasdaq, and Target Media, another screen specialist with sites on office blocks and key residential buildings, is about to follow suit with its own IPO. Six months ago, Hong Kong-based Tom Outdoor Media Group formed JVs with local companies in Chongqing and Wuhan -- Jinzhan and Line land respectively.
There is industry speculation that a merging of several elevator panel media owners across different regions will soon be announced, creating an almost nationwide network under one name. "If it happens, it will be very unusual, as normally, no one's willing to give up their own company name. But the attraction of an IPO is that the bosses can envisage an early retirement," one China source says. Jim Liu, managing director of imPact, ZenithOptimedia's outdoor unit in China, says industry consolidation tends to mean that formats become standardised but, sometimes, that comes at a price. "The key issue is that they offer a better deal, because normally when there's consolidation, the price goes up," he says. "It certainly brings higher standards and better support and makes outdoor more efficient, but the clients care more about their return. For them, it's less about logistics and more about ROI."
In other markets, key developments in recent months include Japan for the first time allowing street-level advertising and, as a result, bus shelter advertising panels being installed in Yokohama and Nagoya by JCDecaux, which has won a 20-year tender to install hundreds of shelter sites in both cities.
In Korea, about 300 bus shelters at middle-of-the-road bus stops have been installed over the past year. "With the increased penetration of new media and greater consumer mobility, outdoor is bec- oming a fundamental platform for advertisers," says Glenda Long, regional sales and marketing manager for JCDecaux Asia.
On the agency side of the outdoor equation, there's also industry consolidation. Poster Publicity and Portland finally went public on their marriage last month and launched worldwide as Kinetic, which will eventually span sites across 35 markets. "Clients want a global perspective when planning outdoor media campaigns and Kinetic's broader and deeper reach allows it to deliver this," says CEO Eric Newnham.
Zenith figures (excluding China) show that outdoor attracts 7.6 per cent of adspend across Asia-Pacific, compared to the worldwide average of 5.2 per cent -- South Korea and Japan, meanwhile, are forecast to spend 12.4 per cent and 11.1 per cent of total ad budgets on outdoor this year. But there's stiff competition from online and mobile media. As Ron Graham, Kinetic's managing director, Asia-Pacific, noted: "Outdoor is one of those media options where there's different information and missing measurement."
The current industry consolidation could change that. As well as creating economies of scale and raising the bar for quality and service, the development of fewer but bigger outdoor agencies and media owners means the key players have the resources to prove outdoor's value. Between them, or even in some cases, alone, they could generate hard data on reach and effectiveness that's comparable with that available on print readership and TV viewing, inspiring advertiser confidence.
