With less than two years until the Expo 2010 in Shanghai, the city’s authorities have embarked on a clean-up of its often chaotic outdoor scene. The Shanghai Greenery and Public Sanitation Bureau has officially issued an outdoor regulatory guideline on billboards in a move that has parallels with the clean-up of Beijing ahead of the Olympics.
The question for media owners, agencies and advertisers is how extensive this clampdown will be, and whether it will cause problems for brands in the way the Beijing clean-up did.
1 The regulations are still being developed, but Shanghai has been divided into three areas: exhibition, control and forbidden. Billboards that are on buildings and the Bund are particularly affected by the new regulations. The policy also targets the major elevated highways. According to reports in China, since last April, 6,000 hoardings and 1,400 billboards from rooftops and buildings have been removed. A total of 16,000 billboards are expected to be pulled by the end of this year as authorities look to root out both unauthorised ads or ones that do not follow the new guidelines. Bus shelters, phone booths and mobile displays are also in review process.
2 However, sources in Shanghai believe the regulations will be less severe than they were for the Olympics. In Beijing, only sponsors were permitted to advertise around the Games; there are, so far, no such rules for the Expo. “The Shanghai Government is not so much banning OOH, but trying to establish more control over it,” argues Stella Lee, deputy MD of Universal McCann China.
3 Nevertheless, brands may find themselves paying more for outdoor in Shanghai, despite the economic slowdown. The remaining displayable areas with high traffic are limited, says Freddie Wong, outdoor business director of OMD Shanghai. He predicts the new policy will inflate the current price range by up to 15 per cent. The OOH industry is highly segmented, which means an ad in one area may not be transferable to another, therefore an extra cost for advertisers may be inevitable.
4 For outdoor media owners, a change of strategy may be required. Seven Media, which owns LED display boats on Shanghai’s Bund, is said to be in negotiations with the authorities over suspending the boat operation as the current route includes the Expo sites. CEO Tony Lee, does not rule out the fact that the company may look to change operations, looking for indoor OOH opportunities rather than relying on outdoor sites that are prone to regulation. “Our past experiences taught us that ‘indoor’ OOH media is relatively safer from unexpected government bans.”
5 From a marketer’s point of view, there may be benefits despite the short-term pain. Shanghai’s outdoor scene is both cluttered and chaotic, and a more orderly industry may ensure greater cut-through. Erica Kerner, global Olympic director for adidas, supported the Beijing authorities’ efforts and points out that a certain level of restriction aids marketers. What’s more, Kang Shih, business director of MPG, suggests that limited resources will challenge media agencies and advertisers to come up with better thought-through solutions. “We will need to spend more time to research and study the relations between products, consumers and media touchpoints to have an appropriate media mix recommendation.”
6 The Shanghai regulations should be seen within the context of the broader evolution of outdoor in China’s major cities. “If you look at Beijing, the streets are still fairly clean after the Olympics as it has to prepare for the next big thing - the 60th anniversary. Guangzhou is cleaning up for the Asia Games in 2010 and so are other cities up in the North. Basically, this is more of a reaction to China being more transparent and regulated,” said Wong, adding that this might be the chance for OOH industry in China to reorganise and consolidate.
That said, Wong admits that something may be lost in the process. “It is a bit disappointing to see the streets being emptied, and neon [lights] taken down, especially around the commercial business districts and the Bund. It takes the liveliness away from Shanghai.”
Media owners
- The regulations promise to bring an end to Shanghai’s chaotic outdoor scene, meaning fewer opportunities to plaster ads all over the city.
- Some outdoor owners may seek alternative opportunities in less sensitive areas, such as within buildings, stores and malls.
- Outdoor spots that remain are likely to fetch higher prices, at least in the short term.
- Greater control over the sector could lead to consolidation.
Marketers
- Fewer opportunities in outdoor, with higher prices.
- However, less clutter may be beneficial to brands looking to achieve stand-out.
- The changes may also force the outdoor sector to work harder in terms of demonstrating effectiveness.
The question for media owners, agencies and advertisers is how extensive this clampdown will be, and whether it will cause problems for brands in the way the Beijing clean-up did.
1 The regulations are still being developed, but Shanghai has been divided into three areas: exhibition, control and forbidden. Billboards that are on buildings and the Bund are particularly affected by the new regulations. The policy also targets the major elevated highways. According to reports in China, since last April, 6,000 hoardings and 1,400 billboards from rooftops and buildings have been removed. A total of 16,000 billboards are expected to be pulled by the end of this year as authorities look to root out both unauthorised ads or ones that do not follow the new guidelines. Bus shelters, phone booths and mobile displays are also in review process.
2 However, sources in Shanghai believe the regulations will be less severe than they were for the Olympics. In Beijing, only sponsors were permitted to advertise around the Games; there are, so far, no such rules for the Expo. “The Shanghai Government is not so much banning OOH, but trying to establish more control over it,” argues Stella Lee, deputy MD of Universal McCann China.
3 Nevertheless, brands may find themselves paying more for outdoor in Shanghai, despite the economic slowdown. The remaining displayable areas with high traffic are limited, says Freddie Wong, outdoor business director of OMD Shanghai. He predicts the new policy will inflate the current price range by up to 15 per cent. The OOH industry is highly segmented, which means an ad in one area may not be transferable to another, therefore an extra cost for advertisers may be inevitable.
4 For outdoor media owners, a change of strategy may be required. Seven Media, which owns LED display boats on Shanghai’s Bund, is said to be in negotiations with the authorities over suspending the boat operation as the current route includes the Expo sites. CEO Tony Lee, does not rule out the fact that the company may look to change operations, looking for indoor OOH opportunities rather than relying on outdoor sites that are prone to regulation. “Our past experiences taught us that ‘indoor’ OOH media is relatively safer from unexpected government bans.”
5 From a marketer’s point of view, there may be benefits despite the short-term pain. Shanghai’s outdoor scene is both cluttered and chaotic, and a more orderly industry may ensure greater cut-through. Erica Kerner, global Olympic director for adidas, supported the Beijing authorities’ efforts and points out that a certain level of restriction aids marketers. What’s more, Kang Shih, business director of MPG, suggests that limited resources will challenge media agencies and advertisers to come up with better thought-through solutions. “We will need to spend more time to research and study the relations between products, consumers and media touchpoints to have an appropriate media mix recommendation.”
6 The Shanghai regulations should be seen within the context of the broader evolution of outdoor in China’s major cities. “If you look at Beijing, the streets are still fairly clean after the Olympics as it has to prepare for the next big thing - the 60th anniversary. Guangzhou is cleaning up for the Asia Games in 2010 and so are other cities up in the North. Basically, this is more of a reaction to China being more transparent and regulated,” said Wong, adding that this might be the chance for OOH industry in China to reorganise and consolidate.
That said, Wong admits that something may be lost in the process. “It is a bit disappointing to see the streets being emptied, and neon [lights] taken down, especially around the commercial business districts and the Bund. It takes the liveliness away from Shanghai.”
Media owners
- The regulations promise to bring an end to Shanghai’s chaotic outdoor scene, meaning fewer opportunities to plaster ads all over the city.
- Some outdoor owners may seek alternative opportunities in less sensitive areas, such as within buildings, stores and malls.
- Outdoor spots that remain are likely to fetch higher prices, at least in the short term.
- Greater control over the sector could lead to consolidation.
Marketers
- Fewer opportunities in outdoor, with higher prices.
- However, less clutter may be beneficial to brands looking to achieve stand-out.
- The changes may also force the outdoor sector to work harder in terms of demonstrating effectiveness.
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