Consolidation key to expansion, says JC Decaux global boss

Australia’s out-of-home market requires further consolidation to help grow its share of advertising spend, according to JC Decaux global co-chief executive Jean-Francois Decaux.

Jean-Francois Decaux is the co-chief executive of JC Decaux.

Australia’s out-of-home market requires further consolidation to grow its share of advertising spend, according to JC Decaux global co-chief executive Jean-Francois Decaux.

Mr Decaux, whose father pioneered the iconic street furniture format that is still in use in 82 countries around the world, believes consolidation among the three major players JC Decaux, Ooh Media and QMS would bolster the sector’s ability to compete and steal ad spend from digital and TV.

The out-of-home market currently accounts for 7 per cent of Australia’s total media spend, which last year reached $8.7 billion, according to Guideline SMI. Out-of-home’s share is largely split between the three players, but Mr Decaux believes it could capture 10 per cent if the sector operated a duopoly structure.

“Out-of-home should become a 10 per cent media channel in Australia. It is a country where people live outdoors – it’s more than a third of your lifetime. Two cities make 80 per cent of ad spend, so it’s a lot easier to implement the strategic vision in two cities, as opposed to when you have the population scattered all over the country, like in the case in the US. I see no reason why we shouldn’t get to 10 per cent of ad spend.”

“The out-of-home media industry is getting share in a couple of markets around the world, especially in markets where you have fewer players.

“A duopoly market structure is not damaging competition, it’s the other way around. Having two very strong players investing in the out-of-home media market is enhancing our competitive position, versus television versus online,” he said.

The out-of-home market has only this year recovered to pre-Covid levels and has benefited significantly from investment in infrastructure and digitisation, particularly the growth in programmatic advertising, which is helping to attract new advertisers to the sector, many of which previously invested only in digital media.

The leak of ad dollars away from digital and TV is a big focus for Mr Decaux, who is in Australia to meet with his incoming co-CEOs Max Eburne and David Watkins, who assume the joint role next year from their previous positions as chief commercial officer and chief financial officer, respectively. They replace Steve O’Connor who steps down from the role after 20 years with the company.

“(JC Decaux) has a 30 per cent share of 7 per cent, so we are 3 per cent, that’s the way I look at it,” he said.

“We are no longer operating in a silo. We are competing against other media, like online and TV. That’s the real competition and that’s why, in my opinion, we’re not 30 per cent, we are 3 per cent.”

Mr Decaux said he would like to see the Australian business double its market share to 60 per cent – or 6 per cent, as he calls it.

“That’s their mission,” he joked, indicating Mr Eburne and Mr Watkins.

The new leadership team will hit the ground running from January 1, with a key focus on building out JC Decaux’s Sydney Airport advertising contract after the company was reappointed to the account following a competitive tender process.

A key element of the new ­contract will see the business launch new brand experience and activation solutions to enable brands to create branded areas such as lounges or play areas ­within the international and domestic airports.

Mr Eburne said the airport experiences were part of an overall trend to create more experiential out-of-home experiences that leverage greater creativity to engage consumers. “We’re seeing quite a resurgence back to brand advertising, but taking a step further and really trying to create brand experiences, brand immersion zones, activation spaces, such as station domination within the rail environment. We have never had the level of demand for those kind of environments as we have at the moment.

“We’re working very closely with Sydney Airport to create brand experience and activation environments within the airport. So brands can come in and create positive environments for the travellers moving through the airport. These could be sponsored family lounges or kids lounges and environments that take that brand activation further than has been done before.”

JC Decaux launched in the Australian market in 1998 after Mr Decaux secured the contract for the City of Sydney street furniture account. That deal, which saw the French business initially partner with Kerry Packer, John Singleton and Robert Whyte, helped kickstart the out-of-home’s industry’s growth trajectory from around 3 per cent of ad spend at the time.