Bus shelters might be doing better than other out-of-home advertising media, with occupancy rates continuing to be stable at 50 per cent since the beginning of the year.
Patrick Chaundy, CEO and President of Right Angle, the company that was granted the bus shelter BOT contract by Roads and Transport Authority, said the occupancy rate has remained at 50 per cent. But taking into consideration the number of locations available for sale has doubled since the beginning of the year, he said, this was an actual growth.
In December 2008, the company expected a 70 per cent occupancy, with plans to set up about 1,000 shelters in the first quarter of 2009.
The plan was delayed and many shelters are yet to be finalised.
However, Chaundy remained positive and said the delay was due to logistics and had nothing to do with performance, lack of advertising or the crisis.
According to Chaundy, the cloud of short-term booking trend which prevailed throughout the year, was starting to clear and more long-term talks were in the process.
Did bus shelters benefit from the fact that the larger formats were no more affordable, being unreasonably overpriced for a market which saw an unprecedented boom in 2008, and an equally unprecedented decline this year?
It is not about the cost it is about value. What we are focusing on and have always focused on is delivering value to clients and potential customers. So when you say it is cheaper, I would say it is cost-effective.
Similarly, when you talk about size, I would say bus shelters enjoy the advantage of being an eye level billboard with a large impact. I wouldn't say it is small. To me, it is an enormously impact-full piece of artwork.
Looking at the audience, it is only in an ideal world that people would wake up in the morning with an eagerness to ingest 3,000 advertising messages. Sadly, that doesn't happen in reality, and therefore, 99 per cent of all media is consumed subconsciously and recognised depending on the creative. The average number of times visuals make it from the subconscious to the conscious level is between 13 and 14.1 times, unless it is an extremely stunning creative.
What we have done is deliberately going with two separate forms of creative treatments, which are complimentary but provide a different image, thus awakening the viewers' mind and helping register the advertisement message. Having said that, you can assume that by carrying advertising the clients are happy with the rates. Other outdoor formats have reached a stage where spaces are given away almost free.
What about the claim that some shelters are not yet illuminated because of the lack of advertising?
We do not put up a space for sale unless it is illuminated. Our advertising is only carried on our shelters that are fully illuminated.
Regarding the occupancy, the rate was 50 per cent at the beginning of the year. The expectations of growth to 70 per cent, I believe, were extremely optimistic.
We have continued to maintain a 50 per cent occupancy rate, but now that the number of bus shelters has doubled, this means an increase in advertising.
We have doubled the number of shelters available for sale in such times, and we are pleased with the sales. During the crisis, property advertising which almost comprised 80 per cent of the industry, was significantly sidelined, and we had to replace the loss with new clients.
For us, the past 12 weeks have seen a 70 per cent in brand count. That means 70 per cent new advertisers have decided that they were going to advertise on bus shelters. We have concentrated on educating advertisers and agencies about the visibility and consistency of bus shelter advertising. We have also conducted research to show people how the medium is consumed, what works what doesn't and the importance of the creative and it is now paying.
We are witnessing very exciting times at the moment. I think the occupancy will continue to grow - it definitely won't be shooting through the roof - and we are very confident that we are on the right track.
What brands are most interested in bus shelter advertising?
We have nine banks advertising with us. We are growing not only in the FMCG sector but other areas as well. In addition to FMCG and banks, we have IT, telecommunications and luxury goods.
Right Angle's best-case scenario at the beginning of the year was securing 70 per cent occupancy rate. Your worst-case scenario was zero occupancy. How would you comment on the company's performance?
I believe, that since September there has been a positive change in the mindset. Local companies have never been through a downturn before. They have just started to realise that despite the recession they still survived and that things will eventually start to improve.
One of the challenges that outdoor had was that it was entirely dependent on property. What happened, especially in Dubai, is that property took up a great majority of the market, pricing out everybody else, and it was ego buying rather than value buying. Currently, things are starting to revert back to the international order of things. Interestingly, we have recently had our first sort-of- tentative inquiries from developers.
Your company also saw a short-term booking trend at the beginning of the year, like the rest of the media industry. Your clients are more geared towards promotional advertising rather than brand-positioning which also signifies short-term campaigns. Do you think this trend will continue?
I think we are talking about a global trend. I agree, there has been a lot of short term-ism. When this crisis hit top executives in companies started questioning budgets and asking whether they needed to spend in certain areas, thus budget cuts. A lot of bookings have become limited to short-term periods no longer than a month ahead.
However, we are now in a situation where people are starting to look forward. So we are starting to have long- term conversations that weren't existing before. When I say medium- to long- term it means three to six months. We are currently having conversations with clients and agencies about next year first quarter.
Of course, there is an exception to the multinational companies who strategically plan their advertising a year ahead, such as Unilever, for example. The rest are just starting to explore the medium-term possibilities.
Right Angle planed to complete 1,000 shelters by early 2009. What happened?
We were never scheduled to have 1,000 shelters. This number was a round figure. In fact, our plan was to complete about 972 shelters. The project has been a fascinating challenge; we have almost finished.
But are you behind schedule?
It has taken a little longer than we anticipated, and one of the reasons for is that Dubai is a very young city, compared to Europe for instance, with its massive infrastructure, electricity installed for a 100 years, and power demands fully realised.
You will occasionally see shelters that are not working across the city. This is due to a couple of reasons.
First, during the planning phase, some stations were decided in certain areas, with given power availability. By the time the stations were completed, new structures in the vicinity had already used up the power available. Nobody could have foreseen such a growth in demand.
Technically speaking, the electricity required for bus shelters does not only comprise the illumination but also air-conditioning, which consumes a huge amount of electricity.
In addition, bus shelters require different cabling to provide the needed power. Therefore, a lot of time has gone to relay the cables which also required permission from the RTA and private location owners [some locations are controlled by individuals and private owners] and we had to manage the costs.
The delay has not been something we would wish for, but it has been beyond our control.
Second, in certain locations we had to co-ordinate with the Metro project. Many bus shelters are situated near Metro stations on Sheikh Zayed Road.
We decided with the RTA to wait until the Metro stations under construction were completed, to start with the bus shelters nearby. As a result, there were 30 to 40 locations left idle.
We are currently proceeding with those shelters. We are also trying to be realistic.
We cannot build a bus shelter on a certain road and receive orders three months later to remove it for the sake of a construction project meant to widen the road.
We can face these issues in every city, yet particularly in Dubai a young but fast-growing city.
By Dima Hamadeh
© Emirates Business 24/7 2009
