Report urges outdoor to diversify

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.

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

explosion.



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.’



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