The reason I chose this article I read in today's newspaper was because of the fact that I did not know what JC Decaux did in the first place. After looking at the image in the center of the article it soon struck my mind. The first thing I did the other morning was trying to find a billboard that had JC Decaux on the bottom. I must say, it's hard to find something when you're really giving it all you can to find it. The first billboard I found mentioned the words 'Clear Channel' on it. Clear Channel and JC Decaux are just two key players out of the big four. The other two are Belgian Posters and Think Media Outdoor, as the text also mentions.
First of all, I found it very odd that a company in this sector, in these circumstances, has its mind set on doing takeovers. This company has just had THE worst year since the establishment of the company in 1964. Sales went down with 11.5% worldwide. We must admit that the sector of outdoor publicity incurred serious damage during last year. Perhaps we can define this as collateral damage because of the worldwide economic crisis.
One of the major problems in the outdoor publicity business is the fact that display panels must always contain some kind of publicity, which means they can never be empty. That's the reason why unbelievable discounts were often given to companies during this period of low demands. It's not easy for a major company like JC Decaux to work this way. The varying prices make the market very competitive and unpredictable. At this moment it's very important that the sector maintains the exclusive image it once had. This goal can only be obtained by reducing the outdoor publicity, as well as the amount of billboards the consumer has to face every single day. An important matter in this case is the behaviour of the Belgian government, the legislation is very strict and conservative.
Most of the competitors have no plans to be taken over by JC Decaux in any way whatsoever. They also don't think the sector is in structural difficulties for the moment. This is why the other market parties think the size of the subject is rather exaggerated.
In my opinion JC Decaux just wants to set a mark and point the government its duties by taking this topic to a new level. Playing the public opinion in the media has always been an important possibility to put pressure on authorities. I think the key element to a better use of billboards is a well-structured third party that controls the outdoor publicity market. Later on, this organisation would be able to discuss several ideas and key issues. These ideas and key issues could then be introduced to governmental agencies in a way that improves the dialogue. I think this is the only way the sector can make decent neutral decisions and differences. Otherwise self-interest will always get the upper hand in this extremely competitive market situation. I believe this is the only way to a better and supportive climate to do business. Every opinion has to be treated in an equal sense, so it can be considered before the discussion takes place.
On the other hand, I can understand the situation of JC Decaux. It feels as if it is being slowed down by several factors and obviously it wants to express its concern about these issues. Of course the prices need to go up again, I think everybody agrees with this statement. So, although I think prices need to go up again - and they will when our world economy is recovering - I think there is no need for this kind of panic.
On the other hand, I can understand the situation of JC Decaux. It feels as if it is being slowed down by several factors and obviously it wants to express its concern about these issues. Of course the prices need to go up again, I think everybody agrees with this statement. So, although I think prices need to go up again - and they will when our world economy is recovering - I think there is no need for this kind of panic.
I am also more than convinced that JCDecaux really had the intention to reach the press with their story. It's a fact that the government will feel a certain pressure by making this subject public.
BeantwoordenVerwijderenOn the other hand I think that, in contrast with the statements of the other players on the market, the cause of this problem can be found in the worldwide financial crisis. When companies get into difficulties, most of the time the first thing they will do is cut in their marketing expenses. This means that less companies want to advertise. When the demand drops and the supply doesn't change, of course the prices will drop. I strongly believe that this will automatically be solved when the financial crisis passes by and most of the larger companies have recovered from the consequences of the financial-economic crisis.