There is still a lot of untapped potential in outdoor advertising on public land
A study by Obeliscum and the University of St. Gallen shows that outdoor advertising on public land is not yet exploiting its great qualitative and financial potential. There are still long contract terms and only a small proportion of advertising spaces are digitized.
66 of 292 cities and municipalities contacted took part in the study on advertising media on public land in the DACH region. The results show that over two thirds of all cities have the goal of modernizing or digitizing their advertising spaces.
Cities often hope that this will improve the quality of the advertising space on offer, while at the same time consolidating or reducing the number of locations.
Low digitization rate
Despite the strong need, the digitization gap in Switzerland is still correspondingly wide with a digitization rate of only 1.1% of all areas. Even compared to German cities, which have a digitization rate of 2.4%.
APG|SGA and Clear Channel remain strong
Although important new players have entered the Swiss market in the last seven years with Neo Advertising, Livesystems and ESH Médias, the two major marketers APG|SGA and Clear Channel are still represented - mostly exclusively - in over 85% of cities.
According to the authors of the study, this could be an obstacle to the stagnation of digitization. Experience has shown that innovations - in this case the digitization of advertising space on public land - arise in a highly competitive environment and require innovative activities on the part of all market participants, from the marketer side, but also from the owner side, i.e. the cities and municipalities themselves.
To date, however, the public advertising spaces have neither been managed nor administered by the cities and municipalities during the contract periods. The know-how is outsourced and left to the marketer. Cities and municipalities thus voluntarily relinquish their creative freedom during the term of the contract and in the preparation of new tenders.
Better tendering practice
Although 47% of contracts still have terms of more than seven years, tendering practices have improved significantly since the price monitor's recommendations in 2012: the average term in Switzerland is 4.5 years, which obviously gives both the cities sufficient flexibility and the marketers enough time to gain a foothold in the cities and successfully commercialize the inventory.
Optimistic mood
Swiss cities are optimistic about the future. 78 percent of cities expect an increase in the amount of concessions in new tenders: 28 percent of those surveyed even expect financial increases of over 50 percent. The results of current tenders, such as in the city of Zurich for VBZ Zurich or the city of Schaffhausen, far exceed this target, especially if advertising spaces are modernized or digitized on a large scale.
