WW: You've been involved in the Zurich poster business for eleven years. Do you know every single poster site?
Bernard Liechti: (laughs) Not every one, but a lot, because I'm often out and about in the city.
When we talk about the city of Zurich - which area are we talking about exactly?
From the largest and economically strongest Swiss city with about 390'000 inhabitants on 88 square kilometers (without lake share) with twelve urban districts.
How are the posters distributed over this urban area?
An estimated 6'000 sites are located on private land, and around 2'100 on public land. The latter were put out to tender in 2006, and the contract ends on June 30, 2013. 2100 fixed poster sites on public land comprise 460 cultural poster sites in F4 format, and 414 F12, F200, and F24 poster sites for commercial national and international campaigns. The rest are F4 format billboards mainly for national and local commercial and non-commercial advertising.
These are the same figures as in 2006.
Yes, the volume and distribution remained more or less the same in the public domain. There are only slight shifts in billposting on building walls. On private land, the number has declined slightly.
In 2006, the city of Zurich caused a sensation because - for the first time in Switzerland - it issued a call for bids in 16 lots or packages of 40 to 80 poster panels each. The panels were drawn by lot and thus randomly assigned to one of the 16 lots. Was there a model for this abroad?
No, we developed the procedure based on the situation in the city of Zurich. We divided the total volume into different lots because we wanted several and also smaller companies to be able to participate in the tender.
Were all the jobs effectively in one pot -or was there some sort of pre-selection?
There were different pots, but the commercial sites F12, F200 and GF were allocated randomly. The cultural or political billboard spaces, which must be managed by vendors as a service, were divided into two lots. One lot included so-called special F4 sites around transit stops and two lots included political and cultural billboards in addition to commercial F4 sites. Another lot included construction wall billposting. Annual fixed charges had to be bid for 15 lots. For posters on construction walls, a share of sales had to be offered.
Do lots with jobs spread all over the city make sense logistically and ecologically? In other words, why not distribute the jobs by neighborhood?
For a small provider setting up something new, it might actually be easier if he could only display his posters in one neighborhood. However, the market works differently. Advertisers want to be present with their campaigns throughout the entire city area. The ecological aspect - which has gained in importance - will have to be looked at more closely in the future. In the last tender, it was not a criterion either in the invitation to tender or in the awarding process.
Had you previously sounded out the billboard companies to see whether they would approve of the new concept, or did you present them with facts?
We previously invited all known companies to a workshop where we communicated and discussed with them the interests and intentions of the city.
Before the 2006 tender, Zurich had a consortium agreement with APG for 14 years. It was obligated to cede part of the space to third parties, regardless of the size. Clear Channel Switzerland (CCS) was the main bidder. This form of cooperation was also unique in Switzerland. Why did you abandon this model at that time?
I can state that the city's experience with the consortium solution has been largely good. Nevertheless, the city administration came to the conclusion that it has advantages to involve the companies with direct contracts.
APG and CCS were at odds at the time over poster research. Did this influence your system change?
I can't confirm that.
A new feature of your 2006 invitation to tender was that the interested providers only had to submit a monetary offer. In other cities, they usually also have to convince with a billposting concept.
We did not submit a concept bid because we were well positioned with the conceptual design specifications and because hardly anything had changed in terms of the number of panels and their distribution. Nevertheless, we took the invitation to tender as an opportunity to update our GK92 billposting concept and adapt it to the changed conditions.
In 2006, ten bidders took part in the bidding - in the end, the highest bidders were awarded the contract: APG got twelve lots and CCS four. Weren't these two at an advantage because they were already licensed billposters beforehand?
The previous bidders had a certain starting advantage in 2006. To compensate for this advantage for the next tender, the term of the current contracts was limited to five years. In order not to give the previous billposting companies a starting advantage, it was decided during the preparation of the 2006 invitation to bid that ownership of the billposting media would revert to the City of Zurich upon expiration of the current contract.
This point was also unique. Will the city thus establish a new department from 2013 that will maintain the street furniture in the future?
No. The plan is to transfer the maintenance and management of the girders to the lessees - just like any other rental property that is left for use for a certain period of time.
This idea did not catch on elsewhere. How do you explain that?
I can't judge that. But I am convinced that it is a solution that offers great advantages for the city of Zurich.
APG has consistently opposed it since 2006, while CCS has spoken positively about it.
APG accepted the terms of the contract at the time.
Another novelty in your approach at the time: In contrast to the usual practice, Zurich did not charge a fee based on sales, but only a fixed fee. Why?
The main advantage of fixed charges is on the one hand the lower controlling effort for the city and on the other hand the budgetable revenues. Fluctuations only occur in the area of megaposters, but these are not part of the concessions.
Why?
Megaposters have other laws, their number varies greatly from year to year. I would even call them an indicator of the economic situation: On the one hand, their number depends strongly on construction activity, and on the other hand - and to a greater extent - on the state of the economy. If the economy is going badly, this has a direct impact on this type of advertising category.
So how much money has the city taken in each year with the new concessions?
The total is 2.2 million francs per year, including in-kind services, i.e. cultural and political posters - but not including the income from Magaposters.
From 2008, the crisis years came and APG and CCS groaned under the (fixed) concession fees. The city authorities can't be indifferent to this either.
I can only judge to a limited extent what the situation looked like from the companies' point of view. But being able to estimate a levy over five years is part of the entrepreneurial risk for suppliers. It should also be borne in mind that if the economy is doing well, this tends to be to the advantage of the companies. Over the entire contract period, this should balance out.
Is it correct that the 2.2 million francs is 30 percent higher than the average charges in the previous consortium agreement?
Yes, the order of magnitude is about right. I assume that the city expected a certain minimum bid from the tender. We did not specify a minimum amount. But the goal was to get at least the same amount of levy as in previous years.
Today, there are reach figures for poster sites from the SPR+ poster research system. Do you consult these figures - and do they flow into the next call for bids - for example, to evaluate the individual sites?
So far, we have not consulted these figures. They are of only limited relevance to us. The advertising impact is only one of several aspects to be considered. For the approval of billboard advertising sites, the building and traffic regulations are primary.
Because the value of a billboard lease in Germany is now much higher than it was just a few years ago, cities are currently demanding massively higher levies. Will this also be the case in Zurich?
We will probably put the lease out to public tender again - and let the market play its part. However, I personally don't think it's realistic for us to demand higher levies than the market would produce through the tender.
But even in a Swiss comparison, Zurich's rent seems quite favorable.
I don't know the numbers of other cities.
Lucerne, for example, receives at least one million Swiss francs per year for its 250 poster sites on public land, i.e. 4'000 Swiss francs per site. Zurich, on the other hand, receives just 1'050 francs each for its 2100 sites.
You are probably not comparing like with like. Your calculation only corresponds to an average value across all areas. It should be noted that Zurich has a very high proportion of discounted F4 spaces and that the total amount includes the management of cultural and political posters. On the commercial spaces, the city of Zurich generates appropriate charges due to the public tender.
With the discounted F4 spaces, the city supports local businesses. Is this in line with a legal requirement?
No. However, this has a long tradition. A large proportion of the F4 areas are therefore occupied with a maximum tariff.
In 2006, as I said, the city of Zurich concluded a direct contract with both APG and CCS. How has the collaboration with the two been in recent years?
The cooperation is good. The contracts are honored by both sides.
And looking back, how has the whole system change played out from the city's perspective?
Direct communication with both partners is certainly an advantage. Another positive aspect is the reduced administrative burden, which not least benefits the taxpayers.
And disadvantages?
There are hardly any disadvantages. We have had and continue to have consistently good experiences with the system.
Did no one appeal against the concession award in 2006?
But, one of the losing bidders made an objection, which meant that the new contracts could not come into force as planned in 2007, but a year later.
Will you use the same model again for the 2012 tender?
That is still open. In the next two to three months, we will evaluate the experience, analyze the current situation and determine the further course of action.
In Switzerland, the Zurich system of tendering in lots and considering more than one concessionaire has not yet caught on. Why not?
Not everything that is done in Zurich has to be adopted elsewhere. (laughs)
But elsewhere, for example in Geneva, Lucerne and Basel, the legal tussles took much longer. Were there never any inquiries from other cantons?
There is a loose exchange. Especially among the large German-speaking cities of Switzerland and some German cities. Experiences are exchanged on a selective basis and we look at what has proven successful, what has not and whether there are innovations in this area.
Last year, there was a change at the top of the two large poster providers: Jürg Rötheli is the new CEO of CCS, Daniel Hofer at APG. Have you already met with them?
Yes.
Was a change in climate felt?
I perceived that they both focused less on quantity and more on quality.
This comes in handy for you.
It depends on how you define quality (laughs). The city defines quality in terms of a well-kept cityscape and the quality of stay in public spaces. The outdoor advertising industry, on the other hand, defines it in terms of what customers want. That leads to a conflict of goals from time to time.
For the future tender, it will be essential to find a common line on this issue. How are you proceeding?
On the one hand, we will review the conceptual specifications and, in a second step, we will welcome the stakeholders.
APG and CCS want to set up soundless digital screens in outdoor areas in the future. CCS, for example, is planning a pilot project. Will Zurich offer a hand in this?
In this regard, we are in talks with both providers, and we certainly see a qualitative potential for this new medium, especially if it could replace so-called scrollers or poster changers or dismantle other installations that are a burden on the cityscape. In some cases, digital posters could provide solutions that are more compatible with the cityscape.
More compatible in what way?
The rapid alternating motion of scroller ads in particular can be very disruptive in public spaces.
Interview: Markus Knöpfli