Adshel and Telecom embrace the great outdoors

Walk around any major New Zealand urban centre and you’ll probably notice a host of strange tardis-like constructions emblazoned with large white squiggles. Some call these relics from another time ‘phone booths’ or ‘payphones’ and, as a result of the rampant onslaught of technology, they are becoming increasingly irrelevant. But, as they’re typically situated in the most convenient locations, they’re also extremely visible. And where there are eyes, there are often advertisers. Enter Adshel, which has struck up a deal with Telecom to use its national network of 3,700 payphones as a new form of out-of-home media. 

An agreement has been made and it’s close to being finalised (a formal release is expected in the next few days), but neither party would discuss the specifics of it, including how much the deal was worth. But, just like the Adshel bus shelters, it seems site selection for this new form of street-level advertising will also be dependent on the approval of the relevant councils.

Adshel builds and maintains ‘street furniture’ in exchange for the right to place advertising on the infrastructure. It reduces costs for the council and provides a service for the residents, as well as for advertisers, so it’s the epitome of a mutually beneficial relationship. But phone booths seem slightly less useful than bus shelters these days, so it will be interesting to see how willing New Zealand’s bureaucrats are to allow yet more commercial messages, particularly in urban areas.

In Auckland, the recent move to reduce the number of Nextbike rental bikes dotted around the city in an effort to free up bike racks and remove advertising from the streets, doesn’t seem to bode too well.

“[Nextbike] is a nice idea – but these things need to be off the footpath, and it’s a pretty cheap way of just getting a whole lot of advertising on to the footpath,” said city transport committee chairman Ken Baguley. “. . . If someone came along and put a whole lot of billboards on the footpaths, we’d be objecting to that.”


Telecom wouldn’t divulge how much revenue it had made (or lost) from its national network of phone boxes (or how much that has decreased over the years), due to commercial sensitivity. And the Commerce Commission didn’t have that information either. But it seems safe to assume that with the uptake of mobile phones, the prevalence of internet cafes and the costs involved in the maintenance of the payphones, the network probably isn’t a huge money-spinner for Telecom, which presumably makes the Adshel proposal all the more attractive.

Advertising on phone boxes is already common overseas (for example, JC Decaux’s StreetTalk, which uses British Telecom’s network of 23,000 phone boxes in urban areas around the UK). And Matt O’Sullivan, co-director of Naked Communications thinks it will be popular here at first, primarily because there will be a few media shops interested in getting involved because it’s “shiny and new”.

But he thinks the proof of its worth will come later, in the next year or so, when it becomes clear whether or not there is genuine commercial demand for a new out-of-home medium. O’Sullivan believes it would be quite expensive to produce a lot of them and he will be interested to see whether it cannibalises Adshel’s existing bus shelter business or adds a new media string to its bow.

Conversely, he thinks the payphone offering could give smaller advertisers, such as youth-centric fashion labels, a chance to play outside. And he also sees it appealing to FMCG and technology brands, more as an addition to than a substitute for its existing out-of-home media channels.

Added to that, he thinks creatives will be able to come up with some quirky ideas to make the medium more enticing and, with Adshel recently taking a more experiential approach (like this), he thinks there will be good opportunities to incorporate technology into the offering.

But in what is already a very competitive out of home market, particularly in the urban centres, he thinks there needs to be some added benefit for the payphone network to become a regular part of the media mix.

“It’s not like we’re short of out-of-home opportunities. It needs to fulfill a different role. If it’s doing the same old thing, I’d have to question the benefit,” he says. “If if it is, then it could be a little bit like the Emperor’s New Clothes.”

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