JCDecaux chases more contracts in billboard market

French outdoor advertising giant JCDecaux will focus on winning more contracts and finding ‘synergies’ with APN Outdoor.

Jean-Francois Decaux with a JCDecaux sign on York Street, Sydney, last week. Picture: Adam Yip

French outdoor advertising giant JCDecaux will focus on winning more business contracts and finding “synergies” in its second year as a merged entity with APN Outdoor.

Local chief executive Steve O’Connor said the business, which received shareholder approval for its $1.12bn merger a year ago, had fully integrated and would be tendering “more often”, while JCDecaux chairman and co-chief executive Jean-Francois Decaux said he was happy with the performance of the newly merged business amid weaker ­advertising market conditions.

“We want to continue to grow our business through rolling out new contracts within whichever format, digitisation of whichever ones we can, implementations of platforms that are going to help us enhance our sales or sales capability,” Mr O’Connor said.

However shortly after JCDecaux’s acquisition and a separate merger between Adshel and oOh! Media was completed, the Australian Competition & Consumer Commission launched an investigation into the outdoor advertising sector to assess whether the use of rebates and discounts between agencies and vendors was in breach of competition laws.

The Australian understands companies were still being contacted by the ACCC as late as September.

Mr O’Connor said JCDecaux had co-operated with the ACCC, but suggested the issues raised by the competition regulator were a part of a “bigger issue” for the industry. A separate ACCC investigation into the market power of digital platforms also raised concerns around the “opacity” of media agency pricing.

“We would encourage anything that led to a more merit-based decision-making process,” Mr O’Connor said.

“We want a level playing field for people to judge our medium and our offering on its merits. In consolidated markets, we’re the ones who provide investment and drive the industry.”

But Mr Decaux said concerns about transactions between agencies and vendors were not unique to Australia.

“If I had to summarise what’s going on it is that the smaller players with less attractive sites are trying to incentivise the media agencies in such a way that they get more than their fair share,” Mr Decaux said.

Although Mr Decaux is pleased with the performance of his Australian operation, now his fifth largest, he said the business needed to focus more on growth in Sydney, specifically. JCDecaux has about 300 street furniture screens in Melbourne, but fewer than 100 in Sydney.

“Sydney is still not where it should be, because we are expecting a decision from the City of Sydney on who is going to be their future partner for the street furniture business,” Mr Decaux said.

Street furniture in Sydney City, Sydney Trains and Queensland Rail are among the priorities for the business as it looks to grow.

JCDecaux has been the provider of advertising and street furniture for Sydney City since the late 1990s. As the end of its 20-year contract approached, the council called a tender for the rights, but it was called off in May after JCDecaux failed to submit a bid due to an overlap in the council’s requirements with a deal signed by the business with Telstra in 2017.

The current JCDecaux contract concludes at the end of the year.

“We’ve done a pretty good job and the city is well aware of this,” Mr Decaux told The Australian.  Telstra is in the Federal Court battling Sydney and two other councils over the installation of new payphones with super-sized billboard screens.

Mr O’Connor declined to comment on the case other than to say the company had not installed the new phones since the case began.

However, Mr Decaux said the stalled decision by Sydney council and the Federal Court case had slowed progress of digitising outdoor billboards in Sydney.

“The perception is that we have kind of reached the limit of what can be digitised,” Mr Decaux said.

“The reality is there’s still a lot of potential. Having said that, we’re not going to be digitising every single site … we have to be careful not to have an oversupply versus the demand.”