OOH is capital intensive: huge investments in street furniture and digital are necessary, but also the franchise fees to the municipalities and other landlords are high (e.g. JCDecaux reports an average franchise fee of 17.2% or revenues in street furniture which go back to municipalities). Due to the strong competition, but also relative good margins companies still have the power to guarantee significant fees.
Clear Channel Outdoor is the world’s largest outdoor advertising company with close to one million displays in 49 countries across 5 continents. It also operates airport, rail, taxi and mall advertising businesses worldwide. Revenue in 2007 was $3.3 billion in 2007 with a $246 million net profit. They expect to have 150 digital boards in 2008.
JCDecaux is the 2nd largest outdoor advertising specialist in the world, the market leader in Europe and n°1 in China. The inventor of the “street furniture” concept in 1964, the JCDecaux Group focuses on outdoor advertising and develops activities in three segments: street furniture, billboard and transport advertising. JCDecaux is n°1 worldwide for street furniture, n°1 in Europe for billboard advertising and n°1 worldwide for airport advertising with concessions in 145 airports, and n°1 worldwide in self-service bicycles. The Group is present in 54 different countries and has over 95000 displays in 3,400 cities. Revenue in 2007 was $2.9 billion with an operating margin of $760 million, ebit $480 million.
CBS Outdoor is among the world’s largest out-of-home media companies providing media opportunities in the United States, Canada and Mexico and across Western Europe with a strong presence in the United Kingdom, Ireland, France, Italy, the Netherlands and Spain. The company has recently expanded into China where it sells advertising on 5700 buses in Beijing.