According to sources, the drive is being pushed with one eye on the Olympics, as part of attempts to spruce the city up in the run-up to Beijing 2008.
Key clients believed to be affected by the crackdown include Nestlé, Hitachi, JVC and Apple. With prepaid commitments of up to three years common among outdoor vendors, a number of clients are also scrambling to recoup lost spend.
“It really depends on how the agencies are handling their clients contracts,” said a source. “But many have prepaid for outdoor space already, so we may see some lawsuits.”
The crackdown is believed to have hit some of the smaller outdoor vendors hard, a situation that is not expected to improve if an auction system comes into play.
Beijing authorities have made several moves to give the city a facelift in the run-up to the Olympics; it is believed that its various districts will complete the crackdown on outdoor sites by the end of this year.
Many of the city’s billboards have been erected without formal permits, but via a more informal ‘permission’ system.
“I think it’s a typically Chinese move for big cities that don’t have effective measures to allow big billboard set-ups,” said a source. “The industry does need a level of transparency that ensures quality and creativity.”
However, the new scarcity of outdoor space is reportedly having two knock-on effects: prices for other media are surging by as much as 30 percent, and clients are becoming considerably more cautious about advertising outside.
Said the source. “Certainly it’s going to drive a lot of clients away to other media formats.”
OOH’s share of adspend in China — approximately 15 per cent — is one of the highest in the world.
Some observers have noted that the clampdown may also be linked by calls for increasing controls on luxury advertising by the mayor of Beijing, Wang Qishan.
Following Wang’s public statements that such ads “encourage self-indulgence, which is not conducive to harmony”, there has been a perceptible drop in luxury property outdoor ads in Beijing.
