Consumer China

Out-of-home ads – A moving picture

  • Published 06 Aug 2009

The picture is mixed for the key players Focus Media, VisionChina and AirMedia despite signs that ad spending is recovering from a lacklustre Q408 and Q109.

As anyone who has driven along an expressway to a Chinese city airport, taken the elevators in smart new office blocks or strolled through the country's high-end shopping malls can testify, out-of-home advertising is a big deal in China. The business of advertising on roadside billboards, giant outdoor digital displays or on flat panel screens in buses, the metro, taxis, elevators, airports and numerous other urban sites, accounts for about 5% of the country's Rmb 441.3bn ($64.6bn, €44.9bn, £38.2bn) advertising market – a much bigger slice than in most countries. In fact, the segment has been so buoyant that three companies – VisionChina Media (VISN:Nasdaq), Focus Media (FMCN:Nasdaq) and AirMedia Group (AMCN:Nasdaq) – have secured overseas listings on the strength of it. Back in mid-2005, when Focus Media became the biggest Chinese IPO on Nasdaq, enthusiasm ran so high that the issue was 20 times oversubscribed for shares that were priced at 34 times projected 2005 earnings.

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