Marketing Practices - JCDecaux
Wednesday, June 13, 2007
Focus : JCDecaux
JCDecaux is a strond example of the changes in the marketing industry of Europe and the need for innovation to get higher returns from the saturated market. The moment you enter France, the homecountry of JCDecaux, you can realise that every bus stop, almost every strategic road crossing, and the buses have been taken by JCDecaux.
Idea was simple, in 1964, Jean Claude Decaux invented the now world famous concept of "street furniture" wherein he would maintain the street furniture free of charge to cities and towns in exhange for right to place advertisement on some of these structures. In some cases, later on, he would also contract to build new bus stops aprt from maintainence. The concept was evidently a huge hit as for administration, it would be a healthy outsourcing and to advertisiers it would give the access to advertising space in the city centres where otherwise advertising was very restricted and the returns were quite high. And so it went on as JCDecaux spread from bus shelters to free-standing information panels, automatic public toilets, kiosks for flowers etc, public trash bins, benches, citylight panels, bicycle racks and shelters, interactive computer terminals and so on. The list is a long one.
Another starking project of JCDecaux is Cyclocity. Cyclocity, (registered by JCDecaux) is a self-service bicycle racks. It has presence in Paris, Lyons, Marseilles, Aix-en-Provence, and Brusassels. Started just an year back, Cyclocity has become in its own as a true means of “individual mass transit”. With Vienna in Austria, Cordoba and Gijón in Spain and Lyons, Brussels, Aix-en-Provence, Marseilles, and most recently Paris lapping up the concept. Cyclocity is now the number one provider of selfservice bikes in the world. JCDecaux is now pumping up the project with advertising revenues completely or partially paying the cost of making bicycles available to the public. But again the main stress is on the advertisement opportunity and not teh rental. Infact in connection with bid solicitations made by local governments, provision can be made for the franchisee to keep all or part of the proceeds from bike rentals.
Cyclocity - It works like this, the Cyclocity bikes are kept parked in some of the busiest of places with each bike attached to the holder. Just near the parking area a automatic ticket vending machine is installed, one can get a monthly card and can use the bike for 0.5 euro per hour, the first hour is complimentary. In case the parking lot is full, you can check for the closest parking lot and the machine awards you some free time so that you can submit the cycle there. But the system workd hard to save this situation from happening. As soon as the cycles racks start getting exhausted, a signal is sent to the main controls and the trucks replenish the cycles from the part where they are in excess. The idea is a huge hit with people who use it for mid night travel when public transport isnt available or also while going to work.
The whole idea for JCDecaux is to conquer the outdoor advertising market. The competetion is from Clear Channel Outdoor (American) and CBS Corporation (American again). The revenues of Clear channel Outdoor, JCDecaux and CBS Corporation are 2898 , 2432 and 2103 (in millions of $ as in 2006, as given bu JCDecaux Annual Report).
Acording to UN study, people are becoming more and more mobile and are spending more time outside of their homes, whether driving or walking on the street, or in trains, railway stations, or airports. To amplify the effect, the average commute of drivers in the European Union from home to work has also been reported to be high, same study says that it took 37 minutes for these drivers to go from home to work, and that automobile traffic on major
British roads had increased by more than 200% between 1994 and 2004. In lieu of these facts the outdoor market becomes more potential to giver higher returns and the strategy of the future.
Outdoor market can be divided into three segments:
1. Billboards
2. On and in public transportation vehicles, stations, and airports (“Transport”)
3. On street furniture (“Street Furniture”).
JCDecaux derives more than 50% of its revenue from Street Furniture Segments. It has presence in Europe, United States, Asia-Pacific, North & South America. Coming back home, in India, JCDecaux Advertising India Pte Ltd (a wholly-owned subsidiary) won the exclusive 15-year bus shelter advertising contract for central New Delhi, in response to a bid solicitation. It will now handle 197 bus shelters, representing 591 advertising faces in the most prestigious locations in the centre of New Delhi as per the contract.
The success of JCDecaux is yet to be seen in India. India being a not at all a mature market, the local unorganised players are many and are infact willing to work for quite small an amount. Maintainig of bus stations wont be easy. But actions of JCDecaux tell that it has understood well the difference and is open to look Indian market in its own focus. Also with time, the domestic shoal is inevitable to be gulped by big fishes. So watsoever, the future of outdoor advertrising will be anything but passive.
Sources: JCDecaux website and annual report
Another starking project of JCDecaux is Cyclocity. Cyclocity, (registered by JCDecaux) is a self-service bicycle racks. It has presence in Paris, Lyons, Marseilles, Aix-en-Provence, and Brusassels. Started just an year back, Cyclocity has become in its own as a true means of “individual mass transit”. With Vienna in Austria, Cordoba and Gijón in Spain and Lyons, Brussels, Aix-en-Provence, Marseilles, and most recently Paris lapping up the concept. Cyclocity is now the number one provider of selfservice bikes in the world. JCDecaux is now pumping up the project with advertising revenues completely or partially paying the cost of making bicycles available to the public. But again the main stress is on the advertisement opportunity and not teh rental. Infact in connection with bid solicitations made by local governments, provision can be made for the franchisee to keep all or part of the proceeds from bike rentals.
Cyclocity - It works like this, the Cyclocity bikes are kept parked in some of the busiest of places with each bike attached to the holder. Just near the parking area a automatic ticket vending machine is installed, one can get a monthly card and can use the bike for 0.5 euro per hour, the first hour is complimentary. In case the parking lot is full, you can check for the closest parking lot and the machine awards you some free time so that you can submit the cycle there. But the system workd hard to save this situation from happening. As soon as the cycles racks start getting exhausted, a signal is sent to the main controls and the trucks replenish the cycles from the part where they are in excess. The idea is a huge hit with people who use it for mid night travel when public transport isnt available or also while going to work.
The whole idea for JCDecaux is to conquer the outdoor advertising market. The competetion is from Clear Channel Outdoor (American) and CBS Corporation (American again). The revenues of Clear channel Outdoor, JCDecaux and CBS Corporation are 2898 , 2432 and 2103 (in millions of $ as in 2006, as given bu JCDecaux Annual Report).
Acording to UN study, people are becoming more and more mobile and are spending more time outside of their homes, whether driving or walking on the street, or in trains, railway stations, or airports. To amplify the effect, the average commute of drivers in the European Union from home to work has also been reported to be high, same study says that it took 37 minutes for these drivers to go from home to work, and that automobile traffic on major
British roads had increased by more than 200% between 1994 and 2004. In lieu of these facts the outdoor market becomes more potential to giver higher returns and the strategy of the future.
Outdoor market can be divided into three segments:
1. Billboards
2. On and in public transportation vehicles, stations, and airports (“Transport”)
3. On street furniture (“Street Furniture”).
JCDecaux derives more than 50% of its revenue from Street Furniture Segments. It has presence in Europe, United States, Asia-Pacific, North & South America. Coming back home, in India, JCDecaux Advertising India Pte Ltd (a wholly-owned subsidiary) won the exclusive 15-year bus shelter advertising contract for central New Delhi, in response to a bid solicitation. It will now handle 197 bus shelters, representing 591 advertising faces in the most prestigious locations in the centre of New Delhi as per the contract.
The success of JCDecaux is yet to be seen in India. India being a not at all a mature market, the local unorganised players are many and are infact willing to work for quite small an amount. Maintainig of bus stations wont be easy. But actions of JCDecaux tell that it has understood well the difference and is open to look Indian market in its own focus. Also with time, the domestic shoal is inevitable to be gulped by big fishes. So watsoever, the future of outdoor advertrising will be anything but passive.
Sources: JCDecaux website and annual report
Labels: Marketing Practices
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