Advertising at airports is hugely lucrative but not everyone is happy with the way in which this environment is being managed.
Competition to advertise in what has become a lucrative but unregulated advertising environment has resulted in cluttered and noisy airports across South Africa.
This is according to Bazil Lauryssen, the chief executive officer of Continental Outdoor, who says that Airports Company South Africa (Acsa) has sacrificed the look and feel of its airports for ballooning advertising revenue.
“You only need to go to the airport and get bombarded with all these different advertising messages to understand that it’s an environment where it looks like all you want to do is maximise money, as opposed to creating a world-class airport environment,” says Lauryssen.
Acsa controls nine airports across the country, the biggest being OR Tambo International. The company makes a substantial amount of money from leasing space in and around its airports to concessionaires such as Provantage Media Group, Continental Outdoor Media, Khombisa Media and Primedia Outdoor, thereby giving these media owners access to a highly sought-after audience: wealthy businesspeople who travel often and have time to kill while in transit.
But Acsa has come under the spotlight, says Lauryssen, for shaping itself as a media owner and buyer, in addition to being a landlord. It started taking control of its ad space and selling advertising directly to brands during the 2010 Fifa World Cup. As such, it bypassed media agency expertise by working directly with tournament sponsors such as MTN and Coca-Cola.
“It got out of control and the economics and the perception of value was created,” says Lauryssen. “Little did they know, it was a once-off event, so the advertising revenue obviously peaked, because they cut out the media owner, and they festooned their airport with clutter but made lots of money.”
In an interview with The Media in 2010, Acsa’s Solomon Makgale said the company had no intention of cancelling existing contracts with media companies, but affirmed that it was exploring new ways of optimising revenue.
“Acsa will conduct, with the industry, an assessment of how this strategy can be implemented going forward. We will also ensure adequate resources are in place to implement it,” said Makgale.
Four years later, little has changed for media owners who want to do business with Acsa.
“It’s an environment where, frankly, the landlord has been irresponsible and has allowed too many operators to exploit advertising, with varying types of quality,” says Lauryssen.
There is no real incentive for media owners to abide by the integrity of the airports because there are no regulatory structures in place to control which sites can be used for advertising, explains Lauryssen. The problem is compounded by the fact that advertisers increasingly want total branded solutions, which include reaching people in prime airport spaces.
“I would take a step back and understand what my ultimate goal is first. Then decide how I’m going to get to that goal. Is the goal to make money, or is the goal delivering a world-class experience to (airline) commuters and, at the same time, delivering a reasonable amount of money out of advertising that is done tastefully and with new technologies?” asks Lauryssen.
Acsa has enlisted the help of out of home communications agency Posterscope as consultants as they realign the business model of their advertising division.
“Part of the realignment is to look at the needs of advertisers, brand houses, concessionaires and passengers and to merge this with our current platforms, including digital migration and the future use of displays and activations,” says Acsa spokesperson Unathi Batyashe-Fillis.
“While our partnership with our current concessionaires has yielded mutual, commercial benefit, it remains in the best interest of advertisers’ businesses that, as a company, we continue to demonstrate value to these brand houses by providing unique media solutions given the evolution of the sector.”
Acsa declined to provide further details as to how their strategy is being modified.
According to Lauryssen, however, the solution is easy.
“The simple thing that you need to do is declutter, maximise certain areas and maximise the revenue in those areas, and then you can put any technology you want to upgrade as you go along because technology costs money so you need a decent amount of revenue to be able to invest in it without giving all the economics away to the landlord,” he says.
Lauryssen believes that Acsa is unlikely to approve of any solutions that Posterscope comes up with.
“The airports aren’t going to like what they’re going to hear because they treat us, the media owners, poorly. They’re getting more of the economics than they generally should, they bend over backwards for new entrants and don’t support existing players,” says Lauryssen.
Other media owners declined to comment on this story.
This story was first published in the May 2014 issue of The Media magazine.
