Advertising giants fight for $500m City of Sydney contract Media Man Int

Advertising giants fight for $500m City of Sydney contract - 6th February 2018

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JCDecaux and Telstra have already been in partnership creating digital phone booths. Photo: JCDecaux

by Jennifer Duke

Outdoor advertising companies are competing for Australia’s most valuable outdoor advertising contract with the City of Sydney, with one reportedly teaming up with a telco to make a bid for the sought-after deal.

Expressions of interest closed for the City of Sydney street furniture contract on Tuesday, with most of the industry's biggest names keen to get their hands on the agreement to deliver bus stations, billboards, free WiFi and digital kiosks, said to be worth about $500 million.

An expression of interest is often the first step in the tender process, typically followed by a request for tender sent to companies selected based on these proposals.

The winner of this tender will find themselves holding onto a contract potentially worth tens of millions of dollars a year, in a deal expected to be up to 15 years long.

The previous contract was for 20 years with the world's largest outdoor advertising agency JCDecaux.

It’s no secret the multinational advertising agency is keen to hold onto the agreement given it is the main revenue driver for the company. The Sydney CBD location makes it a lucrative spot for major advertisers.

While JCDecaux did not provide comment, it confirmed it was making a submission.

There is speculation telecommunications companies have also made a punt for the contract – possibly in combination with an advertising agency.

A source familiar with the process claims Telstra and JCDecaux have made a submission together.

Telstra would not confirm its involvement in the tender, referring inquiries to the City of Sydney, but the two companies are well acquainted having announced a joint contract in November to revamp Telstra's payphone network, with new advertising panels and interactive screens across 1800 digital kiosks in five cities.

Both will face stiff competition from other advertising giants, with industry members saying the majority of the big players were attempting to get the contract as it has the potential to pick the market leader for the next decade.

A City of Sydney spokesman said it received 12 expressions of interest "from a range of Australian ans international companies" to provide the furniture, advertising panels and WiFi.

APN Outdoor confirmed it was participating in the tender. oOh!media had also put in an expression of interest.

Australia and New Zealand out of home advertising company Adshel did not comment nor confirm its involvement, though it is well known for winning significant bus shelter, train and tram contracts.

At the end of January, Adshel sales and marketing director David Roddick wrote in a blog that the upcoming City of Sydney tender would be a "hard fought process with a wide range of participants beyond the traditional out of home players".

"It’s likely to prompt innovation like never before in the sector, and and whatever the outcome, out of home may never look the same," he said.

The council expects to award contracts for the WiFi service and street furniture by mid-2018 with the roll out of the new furniture to begin in 2019.

Former chief executive of APN Outdoor and chief executive of Cody Live, Pierce Cody, described the contract as "an integral part of the city's past and now the future".

"When the [current] contract was awarded it was one of the most transformative urban investments," Mr Cody said.

The submissions will be assessed by council, with tenders to be called in the next few months.

(The Sydney Morning Herald)