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Jcdecaux S.A. Business Information, Profile, and History

company decaux advertising furniture

17 rue Soyer
Neuilly sur Seine
France

Company Perspectives:

The inventor of the "street furniture" concept in 1964, the JCDecaux Group is the only company worldwide to focus exclusively on outdoor a dvertising and develop activities in all three segments: street furni ture, billboard, and transport advertising.

History of Jc Decaux S.A.

JCDecaux S.A. is one of the world's top three specialists in outdoor advertising (number two worldwide and number one in Europe) and the o nly group covering all three of the primary outdoor segments of billb oards, public transport, and urban street furniture. Decaux claims th e world leadership position in the urban furniture segment, a market invented by the company in the 1960s; it is also number one in Europe an billboard advertising and holds the world leadership position in t he airport advertising sector, with contracts are 155 airports. More than half of the group's revenues of EUR 1.6 billion ($2 billion) in 2004 came from its urban furniture operations--which involves the installation of bus stops, benches, public toilets, kiosks and the l ike, which also serve as the support for advertising. Decaux holds st reet furniture contracts, which often range from eight to 20 years, i n some 36 countries. Large-size billboards are the company's second-l argest market, accounting for 27 percent of sales. Decaux operates ne arly 200,000 panels in 29 countries. Transport advertising makes up 1 9 percent of group sales, backed by 157,000 panels and contracts with 155 airports in 20 countries. France remains the company's single-la rgest market, accounting for 34 percent of sales; altogether, Europe accounts for 87 percent of company revenues. Decaux is also present i n North America and in Asia. The company is listed on the Euronext Pa ris stock exchange and is led by co-CEOs Jean-Francois and Jean-Charl es Decaux, sons of company founder Jean-Claude Decaux.

Inventing an Advertising Market in the 1960s

Jean-Claude Decaux was just 18 years old when he launched a small bus iness placing advertising signs and billboards along France's roadsid es in the late 1950s. Called up for military service, Decaux managed to avoid being sent to fight in Algeria and instead continued to run his company while completing his military service at Bourget.

Decaux's company remained a small affair into the early 1960s, in a m arket long dominated by just three companies: Avenir, Giraudy, and Da uphin. The future of Decaux's business appeared even more uncertain a s pressures began to rise to ban the placement of billboards along Fr ance's growing road and highway system. By 1964, that pressure led to the enactment of legislation, under then finance minister Val&eacute ;ry Giscard d'Estaing, restricting the use of billboard advertising.

With the urban billboard market controlled by the industry's big thre e, Decaux's company faced collapse. Yet Decaux had been developing an idea that would enable him to skirt the new restrictions and at the same time slip past his larger competitors. Decaux's idea was simple. He created his own range of street furnishings, starting with bus st ops, which he then offered at no charge to municipal governments. In return, Decaux received an exclusive 20-year contract and the right t o sell advertising space for the bus stop's wall panels. A typical bu s stop shelter held six panels.

Decaux signed on his first customer in 1964, when the city of Lyons c ontracted with the company to install a network of bus shelters in th e city. The company easily signed up advertisers for its bus stop pan els, to the extent that the shelters rapidly paid for themselves. In the meantime, Decaux was not merely content with providing the shelte rs. The company also recognized the need for incorporating both aesth etic and functional design concepts, making the shelters not only com fortable for users but also an attractive part of the urban setting. The company also showed itself committed to maintaining the cleanline ss and good condition of its shelters and quickly gained a national r eputation for the high-quality of its street furniture.

JCDecaux's entry into Paris, where it received its first contract in 1972, underlined the group's arrival as a major force in the country' s exterior advertising market. In the meantime, the company had conti nued to develop its furniture designs, adding new features such as pu blic telephones in partnership with the French telephone service PTT. In 1972, the company also launched its Citylights information panels . In 1976, JCDecaux's partnership with the city of Paris was extended with a new series of contracts, giving the company more or less excl usive control of the city's street furniture market through the end o f the 1990s.

Decaux expanded rapidly throughout France, duplicating its successful formula in all of the country's major urban markets. The company's c ommitment to design and innovation led it to work with noted designer s and architects. At the same time, the company's built up a work for ce dedicated to cleaning and maintaining its fixtures, an effort not lost on the French public. As a result, the company met with little r esistance as it expanded throughout the country.

During this time, JCDecaux made its first moves into the internationa l market. As the recognized inventor of the street furniture sector, JCDecaux claimed a long head start on its competitors. This fact help ed the company expand its sphere of operations into Belgium and Portu gal in the 1970s. In 1982, the company established its first operatio ns in Germany, which quickly became one of its top markets. The compa ny entered the United Kingdom in 1989, and by the end of the 1990s it had expanded throughout most of the rest of Europe. Jean-Claude's el dest son, Jean-Francois Decaux, led much of the group's expansion in Northern Europe, setting up first the group's German operations and l ater establishing the London office.

JCDecaux also sought new markets within the urban furniture sector. J ean-Claude Decaux, who lay at the origins of what some called the com pany's 'obsession' with cleanliness, turned his attention to France's notorious pissoirs, the often unsanitary public toilet facili ties then in place around the country. JCDecaux set out to design a n ew type of public toilet capable of automatically cleaning itself aft er each use. With support from friend and then mayor of Paris Jacques Chirac, JCDecaux secured its first public toilet contract in Paris i n 1980.

The company launched a new product in 1981, an electronic bulletin bo ard for city councils for posting messages and other information. JCD ecaux's interest in automation also led to the launch of its automati c scrolling billboards, called Seniors. These billboards allowed for the potential for multiple advertisement on a single site. In this wa y JCDecaux, which in the meantime had captured some one-third of Fran ce's exterior advertising market, now positioned itself in opposition to the proliferation of billboards in France.

Going Global at the Turn of the Century

JCDecaux's grip on the French street furniture market continued to ti ghten through the 1990s. By then, the company controlled the market f or advertising columns, called Morris columns, in France. In 1992, th e company began extending the functionality of its columns, installin g telephones, or recycling bins and the like in the fixtures.

In 1994, JCDecaux launched a new generation of automatic public toile t, now made handicap-accessible. The new toilet provided the company with its first entry into the United States, as it gained a contract with the city of San Francisco. Nonetheless, through most of the deca de, the company's expansion efforts remained focused on the European market in general and France in particular. In 1997, the company debu ted its new Infobus system, installing real-time bus traffic informat ion panels in its bus shelters. JCDecaux's full-fledged move into the United States came in 1998, when the company landed its first major contract with the Simon Properties Group, an operator of shopping mal ls.

In the meantime, JCDecaux had begun to face challenges back home. In the early 1990s, Jean-Claude Decaux had been convicted for providing funding for a Belgian politician's election campaign. (The company de fended itself by noting that this was a common practice at the time.) In the late 1990s, the company once again came under criticism, this time for its contracts, considered by many to be abusive. Indeed, ma ny of the company's contracts contained clauses calling for their aut omatic renewal with no possibility of a public tender for other bidde rs. The criticism led the city of Paris in 1998 to end the company's virtual monopoly on the city's street furniture market, opening up it s tender process for the first time.

At the same time, the rest of the exterior advertising world had been undergoing a consolidation phase. JCDecaux now found itself faced wi th a smaller number of far larger competitors. In the meantime, throu ghout its existence, the company had remained resolutely family-contr olled and had relied solely on organic expansion for its growth. By t he end of the 1990s, as Jean-Claude Decaux began to transfer control of the business to sons Jean-Francois, based in London, and younger b rother Jean-Charles, who had become responsible for the group's south ern European operations, the company recognized that it needed to joi n the consolidation drive.

Decaux's first target was U.K. rival More Group, the U.K. leader in t he outdoor furniture sector. The company offered some BP 475 million for More Group but was ultimately thwarted in its bid by fast-growing Clear Channel Communications. Instead, JCDecaux decided the time was right to extend its own operations. In 1999, the company paid the eq uivalent of $900 million to acquire the outdoor advertising opera tions of Havas Media, including its control of European billboard lea der Avenir and major U.K. outdoor group Mills & Allen, among othe rs. The addition of Avenir also established JCDecaux as the world lea der in the airport advertising market.

The purchase transformed JCDecaux from a company focused on the stree t furniture sector to one with leading global positions in all three of the major exterior advertising segments. The acquisition doubled J CDecaux in size, placing the company in the top three worldwide.

By the 2000s, Jean-Claude Decaux had ceded direction of the company t o his sons. In 2001, the Decaux brothers decided the time was right t o list the company on the stock market, in order to gain access to fu nding for its further expansion. The company's timing was unfortunate , coinciding with a global stock market slump. Nonetheless, JCDecaux went ahead with its public offering, listing on the Paris Stock excha nge that year.

Into the mid-2000s, JCDecaux continued its tradition of innovation. I n 2001, the company became the first to launch plasma-based airport s creen displays. In 2002, the company borrowed a leaf from experiments elsewhere in Europe, notably in Amsterdam, launching fleets of self- service, advertising-supported bicycles in Vienna, Austria, and then in two cities in Spain. The following year, the company launched clos ed circuit television programming for Aeroports de Paris.

JCDecaux also added to its global operations. In 2001, the company ma de a new acquisition, of Gewista in Austria. The following year, the company added Afichage Holding and DSM, specialized in billboard medi a and transport advertising. The company's U.S. operations received a significant boost when the company won the street furniture contract with the city of Chicago.

Into the mid-2000s, JCDecaux targeted growth in the Asian region. In 2004, the company added its first operations in Japan, winning a cont ract to provide street furniture to the city of Yokohama. The followi ng year, in partnership with Mitsubishi, JCDecaux won a new 20-year c ontract to provide bus shelters to the city of Nagoya. JCDecaux had a lso entered the Chinese market, forming a joint venture to gain a con tract to provide exterior and interior advertising in two Shanghai ai rports.

The year 2005 held a setback for the company when the contract for th e city of New York (acknowledged as one of the world's most important outdoor advertising contracts) was awarded to a smaller Spanish riva l. Still, JCDecaux remained in position as one of the world's leading outdoor advertising companies in the new century.

Principal Subsidiaries: JCDecaux Asia Pte Ltd (Singapore); JCD ecaux Australia; JCDecaux Deutschland/Aribus Citymedia (Germany); JCD ecaux do Brasil, Ltda. (Brazil); JCDecaux North America (United State s); JCDecaux Pearl & Dean Ltd (Hong Kong); JCDecaux Salvador S.A. (Brazil); JCDecaux UK; MCDecaux Inc (Japan).

Principal Competitors: Clear Channel Communications, Inc.; Inf inity Broadcasting Corporation; Viacom Inc.; Lamar Advertising Compan y; Cumulus Media, Inc.; Prismaflex International; ARBOmedia AG.

Chronology

  • Key Dates:
  • 1957: Jean-Claude Decaux forms a small billboard advertising b usiness.
  • 1964: Decaux invents the urban street furniture market and rec eives first contract that year, for the city of Lyons.
  • 1972: Decaux wins contract for the city of Paris and begins Eu ropean expansion.
  • 1980: Company launches first automatic toilets in Paris.
  • 1989: Operations in United Kingdom are launched.
  • 1994: Company places first automatic toilets in the United Sta tes in San Francisco.
  • 1999: After acquisition of outdoor advertising division of Hav as Media, which includes Avenir, JCDecaux becomes leading billboard a dvertiser in Europe and world's leading airport advertiser.
  • 2001: Decaux goes public on Euronext Paris Stock Exchange.
  • 2004: Company receives first street furniture contract in Japa n, in Yokohama.
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