The outdoor industry has reduced its dependence on cigarette
advertising, claims a new report, but it must not expect new-media ads
to fill the revenue gap in the long term.
According to the upbeat report from Poster Publicity, called The Future
of Outdoor, the industry has weaned itself off cigarettes to the extent
that the tobacco manufacturers now contribute less than pounds 20
million (around 4 per cent) to the total industry revenue.
But David Tallis, joint managing director at Poster Publicity, which has
Rothmans among its clients, warned that the ban will still have a
considerable impact. He said: ’Although the industry has reduced its
dependency, the big billboard contractors such as Maiden and Mills &
Allen will bear the brunt of the change and feel it the most. While
Rothmans and Philip Morris have only been buying short-term, some of the
others like Imperial and Gallaher have long-term contracts that might
have to be terminated.’
Poster Publicity calculates that advertising from online brands will
account for more than 15 per cent of outdoor revenue this year, and many
industry figures seem to be placing their faith in the dotcom
But Tallis cautioned: ’Dotcoms may be a short-term ride out of the
tobacco-ban period, but they are not a long-term solution.’ He said
contractors and specialists should be looking instead at the retail
sector, especially at DIY retailers, and financial clients.
The outlook for billboards is good according to the report. But the two
major six-sheet players, JC Decaux and More Group, may suffer from
oversupply in the market.
’Oversupply can be fudged in a buoyant market,’ Tallis said, ’and we are
looking at a very buoyant first and second quarter this year. But there
is a problem with oversupply in some areas.
’To win local authority contracts, the contractors are over-building in
certain urban areas.
They will probably need to be careful not just to sell all these sites
as part of national packages. Contractors should look at getting in more
local advertising in some areas, as TDI does with bus-sides, for
example. They should also change their development programmes and
increase the number of sites in rural areas.’
The report also suggests that the six-sheet market needs to be
reassessed and broken up into a number of segments. ’Roadside has
totally different selling points to supermarket sites,’ said Tallis.
’We need to break the market down into separate components and market
them in different ways.’