The battle of the big outdoor players has continued, with APN Outdoor adding 113 more panels to its arsenal after acquiring New Zealand-based billboard business Roadside Attractions from Twisted World Limited for $6.5 million.
Founded in 1997, Roadside Attractions had annualised revenues of $2.4 million and it was a 100 percent cash funded acquisition.
This acquisition follows APNO's purchase of Oggi's outdoor assets in 2011 for an undisclosed sum and the purchase of what was then the country's third largest billboard company, Media1, in 2008. With the addition of Roadside Attractions, APNO now has around 600 billboards in total, not including airport and digital assets. But APN Outdoor says it's not so much about the number of billboards and more about their location and this acquisition fills some weaker areas in its regional portfolio (Hamilton, Tauranga and Christchurch in particular). It also gives the company "an opportunity to enhance existing and develop new landowner relationships".
“Securing the Roadside Attractions billboard assets is a strategic move by APN Outdoor and we are very pleased to have finalised the acquisition," says managing director Phil Clemas. "The portfolio complements our existing network very well allowing us to deliver broader, national campaigns and we are looking forward to providing our clients with even more opportunities in the outdoor space.”
iSite also got in on the acquisition action when it purchased OTW in 2011, and this brought iSite's total billboard number to over 500, 70 percent of them in Auckland. This also added to its transit options and the advertising concessions at Wellington and Queenstown International Airports.
APN Outdoor says the new sites allow for simple integration with its existing sites and do not require investment in its overhead base. The new sites also increase the pipeline for potential digital conversion opportunities, which has been a focus for the company in both the New Zealand and Australian markets of late. APN Outdoor launched its first large-format billboard almost two years ago, and added four more screens last year. It also has two 'spectacular screens' at the Auckland Airport.
Clemas said a few months ago that the digital network has proven very successful. He couldn't share revenue figures, but he said they represent a significant part of its growth momentum and every cycle across its five screen Auckland CBD network has sold out since launching back in July 2014. Adshel also switched on its digital roadside network a few months ago.
"Demand remains strong because advertisers are getting it. More and more are seeing the benefits of the immediacy and flexibility of digital, the creative possibilities and convergence opportunities with mobile and social channels. We have learnt a lot over the first two years since pioneering digital in New Zealand and we know from client feedback that the premium nature of our screens is also a compelling factor to their ongoing interest and demand ... We always knew competitors would enter the fray which is good for the market and for the industry. I can see advertising spend on digital assets in outdoor in New Zealand reaching 12 percent within the next year or so."
Outdoor has been on the rise over the past few years and returned to its 2011 Rugby World Cup-inspired peak of $83 million in the 2014 ASA numbers, which equated to 3.5 percent market share. The good news has continued this year, with gross media revenue for the first quarter increasing nine percent on the same time last year to reach $17.2 million. OMANZ has a stated goal of getting to five percent market share of total advertising spend (although it hasn't put a time frame on that). OMANZ was unable to provide data on the overall rise of digital for the sector. But in Australia it charted 23 percent year on year growth in out-of-home and, with static inventory flat, that was driven by new revenue coming in from digital.