Before the leap to Italy
Outdoor Advertising IV: Affichage's international expansion plans are taking shape. The first stop is likely to be Northern Italy.
Out-of-home advertising IV Affichage's foreign plans are taking shape. At the beginning of the year, Affichage CEO Christian Kauter announced that the Swiss out-of-home advertiser wanted to break out of its narrow domestic corset and become active in three ways in Germany and generally in other countries close to the border. Firstly, by acquiring stakes in larger out-of-home advertising companies, secondly through poster concessions for cities and thirdly by entering small poster companies near the border. It is true that the year that is drawing to a close has not made either option the clear favorite. But the doors have opened wider, and it seems that going to Italy is at least the most predictable option for Affichage in terms of time and money. In any case, Kauter has his eye on Lombardy: "This region is increasingly becoming an economic area in terms of shopping behavior, traffic and commuter flows. We therefore conducted a study to find out what kind of concept we could use to enter this market," he says. Affichage now has "a project in the pipeline for Lombardy", but it is not yet at the implementation stage, he emphasizes.
German market on the move
In Germany, on the other hand, much is in flux when it comes to outdoor advertising, but with few concrete prospects. Affichage is already involved on a small scale in the outdoor advertising market, which is divided between several large and countless small and micro companies: In Stuttgart, the company holds a 25 percent stake in the JCDecaux subsidiary Klett-Decaux, which manages the local bus shelters. But Kauter puts this into perspective: "This is a better financial investment, we are neither operationally nor strategically involved there." In any case, the investment is not suitable for advancing further into Germany from there.
Entry via poster concessions is currently not possible because the first ones will expire in two to four years at the earliest. For a year now, a large proportion of these concessions have also been in the hands of the large billboard provider Ströer. Last December, Ströer bought out the municipalities' joint poster company Deutsche Städte-Medien GmbH (DSM), the previous number 1, and has now moved up to number 1.
The takeover of DSM by Ströer has shaken up the entire outdoor advertising market in Germany - with market consolidation consequences. Hellweg Werbe GmbH, for example, recently transferred the marketing of its posters to the medium-sized provider akw, with the aim of being able to jointly offer more poster space than Ströer/DSM in Dortmund, for example, where Hellweg is relatively strong. In September, several smaller providers also joined forces to form the Plakatunion marketing company (see box), also in order to be better able to stand up to Ströer/DSM. Further such mergers are likely to follow. However, Affichage and JCDecaux have so far remained on the sidelines.
DERG - a big fishThis could change, however, if Deutsche Bahn - as has been repeatedly rumored in the past - does indeed sell off its Deutsche Eisenbahn Reklame GmbH (DERG), the number 3 outdoor advertising company. It is unclear whether this will actually happen in 2005. Initial inquiries to potential interested parties have already been passed around via banks, says Kauter.
However, nothing is concrete yet. "We don't know how serious the matter is, but no due diligence has yet been carried out," says the Affichage CEO. But one thing is certain for him: "We would consider a tender." And in order to land a fish of this size, he would also consider another joint venture with JCDecaux, similar to the one with Europlakat International (EPI) in Eastern Europe (see page 22). However, he emphasizes: "Such a merger has not been an issue to date, and we are under no obligation to JCDecaux outside the EPI region." Incidentally, it cannot be ruled out that JCDecaux will further increase the 35 percent stake it has held in Wall since the beginning of the year.
Twelve outdoor advertisers have joined PlakatunionFirst eleven medium-sized outdoor advertising companies joined forces to form Plakatunion, now there are already twelve - and more have registered their interest. Ilg Aussenwerbung, the tenth-largest poster company in Germany to date (turnover: 10.2 million euros), is also a member. This means that from 2005, more than 30,000 advertising media will be offered nationwide under one marketing umbrella.
The offer is still not very homogeneous in terms of coverage. Nevertheless, the homepage
plakatunion.de cheers: "We are the third-largest national provider of poster advertising in Germany." The marketing and sales company is based in Hagen. Last weekend, the election of Claudius von Soos, previously Media Coordinator at RTL, as Managing Director of Marketing and Sales was announced. The aim of Plakatunion is to achieve synergy effects, attract new customers to the large advertising space and conduct active marketing. (mk)
Germany's top-selling out-of-home advertisersThe Cologne-based company Ströer has catapulted itself from second place among the top-selling companies to first place by taking over the market leader, Deutsche Städte-Medien (DSM). The cumulative total turnover of the new company amounted to just under 480 million euros in 2003. The Freund Group followed in 2nd and 3rd place with 167.2 million euros and Deutsche Eisenbahn Reklame (DERG) with 166.4 million euros. In 4th place is the French
JCDecaux with 152.8 million euros, followed in 5th place by the Wall Group with
82.9 million euros. Incidentally, Ströer/DSM ranks third in Europe behind JCDecaux and Clear Channel. (mk)
Entry opportunity? Deutsche Eisenbahn Reklame GmbH may soon be up for sale.
In the DERG portfolio: Bus advertising.
Markus Knöpfli
German market on the move
In Germany, on the other hand, much is in flux when it comes to outdoor advertising, but with few concrete prospects. Affichage is already involved on a small scale in the outdoor advertising market, which is divided between several large and countless small and micro companies: In Stuttgart, the company holds a 25 percent stake in the JCDecaux subsidiary Klett-Decaux, which manages the local bus shelters. But Kauter puts this into perspective: "This is a better financial investment, we are neither operationally nor strategically involved there." In any case, the investment is not suitable for advancing further into Germany from there.
Entry via poster concessions is currently not possible because the first ones will expire in two to four years at the earliest. For a year now, a large proportion of these concessions have also been in the hands of the large billboard provider Ströer. Last December, Ströer bought out the municipalities' joint poster company Deutsche Städte-Medien GmbH (DSM), the previous number 1, and has now moved up to number 1.
The takeover of DSM by Ströer has shaken up the entire outdoor advertising market in Germany - with market consolidation consequences. Hellweg Werbe GmbH, for example, recently transferred the marketing of its posters to the medium-sized provider akw, with the aim of being able to jointly offer more poster space than Ströer/DSM in Dortmund, for example, where Hellweg is relatively strong. In September, several smaller providers also joined forces to form the Plakatunion marketing company (see box), also in order to be better able to stand up to Ströer/DSM. Further such mergers are likely to follow. However, Affichage and JCDecaux have so far remained on the sidelines.
DERG - a big fishThis could change, however, if Deutsche Bahn - as has been repeatedly rumored in the past - does indeed sell off its Deutsche Eisenbahn Reklame GmbH (DERG), the number 3 outdoor advertising company. It is unclear whether this will actually happen in 2005. Initial inquiries to potential interested parties have already been passed around via banks, says Kauter.
However, nothing is concrete yet. "We don't know how serious the matter is, but no due diligence has yet been carried out," says the Affichage CEO. But one thing is certain for him: "We would consider a tender." And in order to land a fish of this size, he would also consider another joint venture with JCDecaux, similar to the one with Europlakat International (EPI) in Eastern Europe (see page 22). However, he emphasizes: "Such a merger has not been an issue to date, and we are under no obligation to JCDecaux outside the EPI region." Incidentally, it cannot be ruled out that JCDecaux will further increase the 35 percent stake it has held in Wall since the beginning of the year.
Twelve outdoor advertisers have joined PlakatunionFirst eleven medium-sized outdoor advertising companies joined forces to form Plakatunion, now there are already twelve - and more have registered their interest. Ilg Aussenwerbung, the tenth-largest poster company in Germany to date (turnover: 10.2 million euros), is also a member. This means that from 2005, more than 30,000 advertising media will be offered nationwide under one marketing umbrella.
The offer is still not very homogeneous in terms of coverage. Nevertheless, the homepage
plakatunion.de cheers: "We are the third-largest national provider of poster advertising in Germany." The marketing and sales company is based in Hagen. Last weekend, the election of Claudius von Soos, previously Media Coordinator at RTL, as Managing Director of Marketing and Sales was announced. The aim of Plakatunion is to achieve synergy effects, attract new customers to the large advertising space and conduct active marketing. (mk)
Germany's top-selling out-of-home advertisersThe Cologne-based company Ströer has catapulted itself from second place among the top-selling companies to first place by taking over the market leader, Deutsche Städte-Medien (DSM). The cumulative total turnover of the new company amounted to just under 480 million euros in 2003. The Freund Group followed in 2nd and 3rd place with 167.2 million euros and Deutsche Eisenbahn Reklame (DERG) with 166.4 million euros. In 4th place is the French
JCDecaux with 152.8 million euros, followed in 5th place by the Wall Group with
82.9 million euros. Incidentally, Ströer/DSM ranks third in Europe behind JCDecaux and Clear Channel. (mk)
Entry opportunity? Deutsche Eisenbahn Reklame GmbH may soon be up for sale.
In the DERG portfolio: Bus advertising.
Markus Knöpfli
