IN DEPTH: Glimmers of optimism for the outdoor titans
The biggest out-of-home media owners in the U.S. and worldwide are hoping that a bitter 2009 will be followed by milder trading conditions in 2010, with Clear Channel Outdoor, Lamar Advertising and JCDecaux displaying signs of recovery and a more upbeat mood after filing financial statements that show the pain they suffered last year.
All three saw revenue drop between ten and 15 percent last year, but orders appeared to be building up again noticeably by the fourth quarter, and a return to actual year-on-year revenue growth seems imminent.
At Clear Channel Outdoor, last year’s revenue of $2.7bn was down 14 percent year-on-year (excluding, like Clear Channel’s other figures, the effects of exchange-rate movements).
However, the firm also managed to cut operating expenses by 11 percent during the year, and revenue seemed to be climbing back toward its former levels in the fourth quarter, when it was down only six percent year-on-year.
The company was hit in the U.S. by campaign cancellations, non-renewals and rate cuts, it said, while international territories suffering major revenue slumps included France, the UK and Italy.
Despite the blow to revenue, however, Clear Channel continued to convert its U.S. billboards to digital last year, rolling out about 120. They brought its total to 457 in 33 U.S. markets by the end of 2009.
At France’s JCDecaux, meanwhile, 2009 revenue was down 11.5 percent to €1.9bn ($2.6bn), but the company – a strong proponent of digital out-of-home in environments such as airports which bills itself as the second-largest outdoor media owner in the world, and the leader in both Europe and Asia Pacific – expects organic revenue growth of around five percent in the current quarter.
Like Clear Channel, JCDecaux worked during 2009 to cut costs, and is sufficiently bullish about the longer-term outlook for out-of-home advertising that co-chief executive Jean-Francois Decaux said the economic times might be right for it to make acquisitions in the U.S. – long a gaping hole in its global empire.
U.S. outdoor firm Lamar Advertising, which has also been converting billboard sites to digital, saw revenue drop 11.9 percent to $1.06bn during 2009. But like Clear Channel it stemmed the flow markedly by the fourth quarter, when revenue fell only 6.1 percent. For the first quarter of 2010, Lamar expects a year-on-year revenue hit of just one percent.
And there was also guarded optimism at CBS when executives discussed its fourth-quarter and full-year financials last month.
For the firm’s local businesses including outdoor, “the fourth quarter was by far the best of the year”, said president and CEO Les Moonves. “Recovery [in outdoor] been slower [than in TV and radio], but also clear,” he added; revenue at CBS’s out-of-home operation was down eight percent year-on-year during the quarter.
www.cbsoutdoor.com
www.clearchanneloutdoor.com
www.jcdecaux.com
www.lamar.com
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