Advertising giants to re-submit for $500m City of Sydney contract

Advertising giants and telecommunications providers will need to re-submit expressions of interest to Sydney council for Australia’s biggest ad contract, after a shake-up in the advertising industry.

On 10 July, the council is going to ask for renewed submissions for its street furniture contract, said to be worth about $500 million, which aims to overhaul the city’s outdoor assets from digital signs and advertisements to free public WiFi.

JCDecaux and Telstra have worked together on updating payphones, fuelling speculation they are hoping to get the City of Sydney contract together.Credit: JCDecaux

This second round of expressions of interest comes weeks after global advertising giant JCDecaux made a successful $1.12 billion bid to acquire APN Outdoor Group, while rival outdoor advertising company OohMedia bought Here There & Everywhere’s street furniture arm Adshel for $570 million.

There is speculation Telstra and JCDecaux made an expression of interest together in the first round, while APN and OohMedia confirmed they had made submissions.

Expressions of interest are usually followed by a request for tender to the companies selected based on their proposals. The first round received 12 submissions from Australian and international companies, with the council telling Fairfax Media they were still reviewing this information in late-June.

Lord Mayor Clover Moore said in a statement the contract was “one of the largest of its kind” in the country and indicated the provider could be local or international. The earlier round of expressions of interest closed in February.

“We’ve refined our contractual requirements following the first expressions of interest process which began in late-2017,” Ms Moore said.

“This is because interested providers told us the market needed more time to respond to the complex nature of the contract and work on solutions to give residents, workers and visitors the best possible outcome,” she said.

She described it as an “enormous opportunity for an experienced operator to have unrivalled coverage in the Sydney CBD” and for benefits from the advertising revenue. The contract is expected to last for about 15 years, and is considered a lucrative position for major advertisers.

The new contract covers more than 2500 pieces of furniture, spanning bus shelters, toilets, seating, bins and kiosks. Some of the advertising will be reserved by the council for cultural events.

The current long-term contract, with JCDecaux, ends in 2019 and has been running since 1998. When the contract is awarded, the existing furniture will be phased out.

“We’re looking for modern, sustainable and attractive street furniture that is functional and blends in seamlessly with our urban environment,” Ms Moore said.

“Eventually we could see real-time emergency, event and transport information displayed on bus shelters.”