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Outdoor advertising contract deals and statistics

We're engaged in discussions with a client for its outdoor advertising technology. Our work has been to model and structure its commercialisation roadmap, business models, intellectual property and contracts.This requires understanding the law and business of outdoor advertising.

The work triggered thoughts on why outdoor advertising is among the fastest growing advertising sectors in Australia and the United States.

As a Sydney CBD commuter I'm personally aware of the French outdoor advertising company, JCDecaux. JCDecaux has a great business worldwide. It has 8,900 employees and is present in more than 50 other countries.

The JCDecaux Sydney CBD advertising and street furniture business deal goes back more 10 years. In the late 1990s Sydney City Council wanted to upgrade its pavements and furniture before the Sydney Olympics and could not fund the work on its own. It put out a tender. I know this because we advised a client regarding its bid for this tender.

JCDecaux and its partners won the "street furniture" contract to provide a solution. The contract works like this.

  • jcdecaux_bus_stop_sydneyThey provide the facilities, clean them and upgrade them for the Council. The cleaning is done by JCDecaux staff who get around in groovy little vans.
  • In return, JCDecaux and its partners put up ads and eat from that. The CBD Sydney advertising is on the sides of bus stands, phone booths, flower stands, fruit stands and public toilets.
  • It's a win also for advertisers. As the accompanying JCDecaux photos illustrate, commuters can't help seeing the ads. Initially they were static in CBD Sydney, then they were sometimes scrolling billboards on automatic rotation cycles. Walk past one slowly and you might see two ads.

How big is outdoor advertising in Australia?

The 16 May 2008 issue of the Australian marketing magazine, B&T, has an article titled "It's a peak time for reaching commuters". The article has useful statistics on Australian car, bus, rail and airport commuters.:

Following are facts cited by the article. They tend to illustrate why outdoor advertising works for advertisers.

  • jcdecaux_phone_stand_sydneyThe average commute time for fulltime workers in the metro cities is now four hours and 4 minutes per week.
  • To get to work - 80% of Australians go by car, 4% by bus, 4% by train and 1% by tram.
  • In the six months to to May 2008, 6.6 million people flew domestically, according to Eye Media.
  • In 2007 the out-of-home (OOH) advertising industry grew net revenue by 12.3% to $428 million, representing a return of double-digit growth and a fifth consecutive year of growth for the medium.
    • The OOH sector is 4% of total advertising revenue.
    • Eye Corp admits its revenues have increased year on year by 15%.
      • OOH's broadly defined street furniture sector is dominated by Adshel, JC Decaux, and Eye Corp. The sector has been leading the growth for the past five years with bus and tram shelter sites, rail concourse and platform ads, airport ads, phone booths ads, and other options. Revenues in 2007 are segmented as follows:
        • Street furniture - A$166 million
        • Large-format billboards - A$144 million (mostly APN Outdoor and Eye Drive)
        • Transit ads - A$91 million (mostly APN Outdoor)
        • Smaller billboard posters - A$29 million (mostly APN Outdoor).

Finally, for your further research, here's a list of websites of outdoor advertising companies in Australia:


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