Albert Asséraf

EVP Communication & User Innovation, JCDecaux

JCDecaux operates OOH advertising networks in hundreds of different airports and transit systems worldwide, which gives you a unique viewpoint on the ongoing Covid-19-related events. Where does your industry stand, 6 months into the crisis?

During the Covid-19 lockdown period, the temporary historic drop in urban and transport audiences as well as severe economic uncertainties led companies to react immediately and to reduce their advertising spend on an unprecedented scale. Once lockdown measures were lifted, urban audiences started to recover progressively in Street Furniture and in Billboards while Transport audiences are still lagging significantly, mainly in airports.

Advertising revenue has, for the time being, not followed the same pace of recovery. We see an important difference between audiences’ levels, which are in some geographies close to pre-Covid-19, and revenue levels which do not yet reflect the positive momentum in urban audiences.

Our Group revenue declined by €766.9 million reaching €1,075.4 million with a decrease in adjusted organic revenue at -40.8%, mainly in Q2 2020 (-63.4%). Our H1 2020 operating margin reducing significantly to -€61.8 million.

Regarding Transport, the first half adjusted revenue decreased by -45.6% to €423.0 million, -44.2% on an organic basis, significantly impacted by the Covid-19 outbreak, reflecting a significant decline globally in both airport passenger traffic as well as public transport commuting. Europe (including France and UK) and the Rest of the World were the most affected regions.

In the second quarter, adjusted revenue decreased by -65.5% to €141.2 million. On an organic basis, adjusted revenue decreased by -62.6% compared to the same period last year. Asia-Pacific was the least affected geography.

What are the key conditions for recovery in the longer term?

The audience recovery is the first key condition to achieve and there has been an encouraging rebound to date in France for our street furniture business after lockdown measures were lifted.

Within airports, all aeronautical and non-aeronautical industries are heavily impacted by this unprecedented crisis and depend on local government decisions for the reopening of borders and the suspension of measures, including compulsory self-isolation and the quarantine of arriving tourists. We can’t predict what the final impact will be, but we know that the recovery will come and it has already started for domestic flights in China. It’s a hopeful sign as domestic markets are real growth drivers for brands in countries like China.

To value and monetize the returning audience requires it to be quantified and qualified. For the last 2 years, our group has invested heavily in driving its ability to operate data at scale. We now have a data division operating with landlords, advertisers and agencies to enhance our data provision for our partners. Data will help us to provide our advertisers with both accurate and agile solutions post-Covid. Its quality, accessibility and usage (meeting privacy and safety requirements) are fundamental to our transformation to develop sustainable and scalable value across the company and for our stakeholders. We believe that in-depth data analysis will have a transformational impact on through market analysis practices, knowledge of our partners and advertisers, media strategies and planning, measurement practices (for audience, impact and efficiency), ROI, working methods and decision-making processes.

Data has been at the heart of JCDecaux’s recent strategic developments including:

  • The VIOOH launch in June 2018. This global independent platform has been designed to accelerate the growth of OOH/DOOH and connect the industry to the programmatic digital ecosystem, all with full transparency. The aim of VIOOH is to automate the planning (VIOOH Automation), trading (VIOOH Exchange) and serving of content to screens (VIOOH Content). Specifically, VIOOH Content is a real-time content management system for contextualised and interactive advertising. It allows advertising to be automatically scheduled according to specific live data feeds – such as destination, language, location, social media, news, weather and much more. It drives consumer engagement by displaying relevant content, with the right message, to the right audience, at the right time.
  • AAM (Airport Audience Measurement) which was launched in March 2019.  We developed the first international audience measurement system for the airport industry. It was deployed initially at Paris and Singapore airports, then at Sao Paulo, Hong Kong and  London Heathrow and it will gradually roll out to our main hubs, integrating them into the VIOOH programmatic platform.

Beyond passenger counts, it looks like Covid is deeply affecting the traffic mix. Teleconferencing and travel budget cuts may slow down recovery of the business travel market for the years to come; WFH (Work From Home) and business real estate cost cuttings may change commuting patterns, with lower frequency. It is of course very early to make hard predictions, but what are the trends that you think will structure tomorrow advertising market in airports and transit systems?

“Nothing beats the face-to-face”. So says Jo Sully, regional general manager for Asia-Pacific at American Express Global Business Travel. This quote is confirmed by  research conducted by our team in the UK in order to understand  attitudes towards future business travel. ​This online study surveyed 200 UK residents who are key business decision makers within their organisations. Resuming business travel will be key for this audience as they move into 2021, as nearly half of the audience believe that face-to-face meetings will be more important than ever. There are many advantages of communicating via Video Conferences, but as time goes on its limitations become clearer and that there is no substitute for face to face engagement in the business world.  These new communication models that we experimented with during lockdown won’t be a long-lasting alternative but rather a supplement to physical meetings.

Transit systems can’t be compared to airports due to the different audience profile and the frequency of use. People commuting every day for job-related reasons usually do not have the choice not to, nor the option of working from home. In countries where restrictions to use public transport have been lifted and safety protocols implemented, the traffic has recovered quickly and close to normal such as in the main metro systems in China.

At the other end of the spectrum, what do you think Covid-19 will change in the relationship with landlords (airports, station operators)? And what changes would you advocate to facilitate recovery of the business and adapt to the new normal?

This crisis is unique and the airport industry has been heavily impacted and there is still uncertainty. However, airports have always shown their resilience and capacity for innovation not only in terms of investing in products but also as a driving force bringing all stakeholders together, breaking silos, and moving towards a more collaborative approach. In this context we reference the innovative partnership signed with Dubai Duty Free, on top of our contract with Dubai Airports, for the launch of a new drive-to-store offer at Dubai International (DXB). It is designed to create a new ecosystem based on advertising, airport and travel retail data to deliver an optimized advertising scheduling system and thereby boost campaign effectiveness.

The industry is at a turning point and to succeed, airports should foster new common initiatives between non-aeronautical operators by adjusting their financial model based on the new reality and providing even greater flexibility.

JCDECAUX KEY FIGURES

  • 2019 revenue: €3,890m, H1 2020 revenue: €1,075m
  • Present in 3,890 cities with more than 10,000 inhabitants
  • A daily audience of more than 890 million people in more than 80 countries
  • 13,210 employees
  • Leader in self-service bike rental scheme: pioneer in eco-friendly mobility
  • 1st Out-of-Home Media company to join the RE100 (committed to 100% renewable energy)
  • JCDecaux is listed on the Eurolist of Euronext Paris and is part of the Euronext 100 and Euronext Family Business indexes
  • JCDecaux is recognised for its extra-financial performance in the FTSE4Good index and the MSCI and CDP 'A List' rankings
  • 1,061,630 advertising panels worldwide
  • N°1 worldwide in street furniture (517,800 advertising panels)
  • N°1 worldwide in transport advertising with more than 160 airports and 270 contracts in metros, buses, trains and tramways (379,970 advertising panels)
  • N°1 in Europe for billboards (136,750 advertising panels)
  • N°1 in outdoor advertising in Europe (636,620 advertising panels)
  • N°1 in outdoor advertising in Asia-Pacific (260,700 advertising panels)
  • N°1 in outdoor advertising in Latin America (69,490 advertising panels)
  • N°1 in outdoor advertising in Africa (22,760 advertising panels)
  • N°1 in outdoor advertising in the Middle East (15,510 advertising panels)

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