Outdoor advertizing in Moscow

2019: Mail.ru Group entered the market of outdoor advertizing

At the end of August, 2019 it became known of Mail.ru Group entry  into the market of outdoor advertizing. Her company will sell in cooperation with Gallery through the myTarget platform. Besides, the Internet holding is going to begin sales of digital city boards and the superwebsites. Read more here.

2017: Receipts are three times lower than the plan

Operators of outdoor advertizing in December, 2017 transferred into city budget of Moscow 3.3 billion rubles for the next year of operation of the billboards played at auctions of 2013-2014. As noted, receipts from outdoor advertizing were three times lower than the plan adopted in 2013. Then in Moscow the policy in the field of outdoor advertizing was cardinally reviewed: its volume was reduced and distributed through auctions.

According to the representative of promotion department and media of Moscow Konstantin Gorokhov, under the agreements signed after the second auction in 2014 only the Olimp operator was calculated. The company of Broadcasting Company, as of January, 2018, did not enter required 1.4 billion rubles yet. Agreements with it it is terminated if the company will not pay till January 16, 2018 inclusive. Formally termination the working day from receiving Broadcasting Company of the notification on need of payment, i.e. since January 23 comes on the 11th.

In 2013 according to the results of an auction the most part of spaces for advertizing for the term of ten years seven operators — Russ Outdoor divided among themselves, Gallery, "Nike", Rasvero, Olimp, shopping Mall and Rouen who undertook to pay in total 7.5 billion rubles a year. At the same time Rouen entered 1.45 billion rubles in five years at once. The remained advertizing spaces were played in 2014 with calculation to gain for them 2.18 billion more rubles a year. The most part of places was bought up then by Broadcasting Company. Thus, by estimation, within 10 years advertizing spaces had to fill up the budget to Moscow for 100 billion rubles.

However completely operators could pay advertizing spaces only in the first year after the auctions. Then a part of billboards was excluded from agreements in connection with a town-planning situation when they could not be set therefore payments and decreased, Gorokhov explained.

So, the Nike operator could not pay 1.3 billion rubles in 2014 when in the advertizing market there was a crisis, and the mayor's office terminated with him agreements; the company went bankrupt. Problems with payment arose at Olympus which had legal proceedings with the city about a year, but as a result recovered agreements. At last, Broadcasting Company, one of large participants of the Moscow market of outdoor advertizing, in 2017 timely did not enter 1.9 billion rubles to the budget of the capital. The mayor's office terminated with the operator all eight agreements, but then, after transfer of Broadcasting Company in February of 1.33 billion rubles, recovered five of eight contracts.

The city received that all was foretold: as a result of auctions economic market conditions turned outdoor advertizing into the industry where profitability appeared under a big question — the CEO "ESPAR the Analyst" Andrey Berezkin considers.

In December, 2017 discounts were provided to operators. According to the mayor's office, Russ Outdoor paid 1.8 billion rubles though won boards for 2.5 billion rubles, Gallery — 0.7 billion rubles whereas the basic payment assumed payment of 1.4 billion rubles.

According to Andrey Berezkin, with leaving of "Nike" and possible leaving of Broadcasting Company approximately the fifth part of stock will disappear from the Moscow market, but for creation of advertizing campaigns it is noncritical. For the remained players such situation — serious help, he considers:

If Broadcasting Company leaves, it will allow to redistribute demand, and her clients will continue placement on other boards.

Representatives of advertizing agencies are convinced that in case of leaving of Broadcasting Company it will be difficult to provide the necessary scope.^[1]

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