(AOF) – JCDecaux announces that it has won the exclusive advertising concession for Shenzhen Bao’an International Airport in China, following a call for tenders. This new contract, effective February 1, 2024, expands JCDecaux’s presence in Chinese airports by ensuring a strong presence in the Guangdong-Hong Kong-Macao Greater Bay Area, one of the most dynamic in the world, which has more than of 86 million inhabitants.
Drawing on around 400 existing advertising devices, this new partnership aims for the highest international standards in airport advertising. JCDecaux will invest in new giant iconic digital screens, data and software, to support the digital transformation of the airport.
This digital transformation will make it possible to attract new advertisers to the airport looking for quality and efficient media assets.
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Key points
– World number one in outdoor communications created in 1964;
– Group inventor of the concept of street furniture (52.4% of sales), present in transport advertising (32%) and large format billboards (15.6%);
– Global presence, with revenues of €2.74 billion, distributed between continental Europe for 49%, Asia-Pacific for 25% (including China, 1
er
group market), the United Kingdom for 9% and North America for 6%;
– Business model broken down into 3 advertising activities with street furniture (52.5%), land and airport transport networks (30%) and large format displays, with diversification in bike sharing ( No. 1 in the world);
– Capital held at 64.67% by the holding company of the founding family, with a supervisory board of 12 members, the management board being co-chaired by Jean-François and Jean-Charles Decaux;
– Solid financial situation with net debt of €977 million at the end of June compared to €1.6 billion in equity.
Challenges
– Strategy in 3 axes: internal growth through contract wins, strategic acquisitions and combined use of digital, data and programmatic;
– Innovation strategy integrated into the business model (portfolio of 1,410 patents), open and focused on: a unique and proprietary solution for the management and distribution of digital campaigns / the use of innovative technologies for the development of platforms – Data Solutions , OOH Planner, OOH Measurement, VIOOH / secure cloud-based infrastructures; ;
– Proactive environmental strategy, with activities in France being carbon neutral since 2021: electricity consumption coming from 100% renewable energies, eco-design and circular economy, LED electricity consumption and lighting intelligence by modulation according to presence of humans;
– Strategic and capital alliance, with Displayce (Demand Side Platform) leader in complete programmatic solutions that can be combined with DOOH inventories;
– Long-term contracts (15 years on average) ensuring recurring revenues, independence from advertisers, the top 10 representing less than 13% of turnover and presence in 12 of the 15 cities contributing the most to global GDP estimated 2030;
– Acceleration of digital growth (more than 1/3 of revenues) driven by the deployment of the VIOHH programmatic sales platform, connected to 36 DSP platforms.
Challenges
– Resistance to maintaining lockdowns in large Chinese cities and to the global economic slowdown due to the Russia-Ukraine war;
– After the return of Street Furniture activities to pre-Covid levels, waiting for the total recovery of the Transport branch, still impacted by the confinements in China.
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A global market that is doing well
According to Magna (Interpublic Group), growth in the global advertising market was limited to 1% year-on-year during the first quarter compared to a dynamic start to the year in 2022. However, for the full year, the company expects growth much superior, driven by digital. This performance is the result of China’s economic rebound since the end of the “zero Covid” policy. In the first quarter, advertising spending jumped 6% year-on-year in this country. Elsewhere, expected performances are lower for 2023: 4.2% growth in Europe (including 2.8% in France) and 2.5% in North America (4.2% if we exclude political advertisements falling without an election). The good results of the three world leaders (the French Publicis, the British WPP and the American Omnicom group) in the first quarter reflect this market development.