Acsa aims high to keep ad revenue flying at airports
Processes to be streamlined and clutter to go in shake-up
HERE are very few places today where you can escape from the constant bombardment of advertising and, particularly in the Out of Home (OOH) environment, there is a welter of clutter.
And our airports – which used to be bureaucratic, government facilities but are now running as a commercial business – have not been spared the encroachment of commercial messaging.
That fact that the advertising business is significant (R200 million annually across Airports Company of South Africa’s nine airports in this country) and is growing, indicates that marketers believe a “captive” audience – passengers and those welcoming them or seeing them off – can be an effective target for selling messages.
However, according to Acsa’s group executive: commercial, Haroon Jeena, the company is concerned the current airport advertising model is not efficient – for customers or media planners – and that the possibility of increased clutter is a real concern.
“In Out of Home terms, airports are prize locations. Most of the people passing through our airports belong in the LSM (Living Standards Measures) 7-10 bands.
“Few people in the lower LSMs can afford to fly. And, because they are often there for significant amounts of time, there is the sort of ‘dwell time’ you don’t get in other spaces, like billboards alongside roads, for example.”
Acsa has just announced that it intends to rationalise the current system and reduce the number of concessionaires who are permitted to sell advertising space in and around the terminals.
“We currently have between 20 and 30 different concessionaires, which is very different from international best practice where airports often only have one concessionaire.”
Jeena said the multiplicity of vendors meant that media planners and their clients often wasted time getting the space they wanted, because they would have to bounce around from concessionaire to concessionaire and “in the advertising
Tbusiness, time is money”.
The new advertising policy at Acsa will reduce the number of concessionaires who are permitted to sell space, but it will also seek to avoid “having a monopoly or a situation where the big players can win out because they have the muscle.
“We are committed to the transformation of our society and our economy and we want, in awarding the concessions, to take this into account and to give the smaller players, the emerging companies, a chance at sharing in this business.”
Acsa’s overall plan is to increase the revenue from airport advertising – part of a strategy to increase income from its commercial portfolio to 50 percent of its total revenue.
Currently, says Jeena, the commercial side of the business generates 37 percent of total revenue, which is down from what it was before the major re-developments were completed. This is because the non-commercial revenue (what Acsa charges airlines and passengers) has increased recently because the developments are complete and the loans have to be paid back.
But the more income the group can make from its commercial operations, the more it can keep its increase in pure airport fees in check. The airports’ advertising business will be divided into three sections: outside the ter minal, inside the terminal and activations or experiential.
“That, we think, will greatly simplify and streamline things,” says Jeena. When tenders go out shortly for all the nine airports run by Acsa, the business will be split into “four distinct clusters”.
One will be for OR Tambo International in Johannesburg, one for Cape Town International and one for King Shaka Inter national in Durban. The fourth cluster will include all the rest of the airports.
It will make it economically viable, because few concessionaires would be able to make money out of just one of these less busy airports.
“What we are looking to do, in addition to making some more money and to streamlining the processes, is to ensure that we enhance the experiences of those who visit our airports.”