Plakanda acquisitions help close the gap with AMS
Clear Channel Communications, the U.S.-based media giant and owner of outdoor advertising company Plakanda International Poland, said last week that it had signed contracts to acquire three other Polish outdoor advertising firms.
"We expect a finalization within two months," said Fred Levy, chairman of the board at Plakanda, referring to the company's acquisition of IdeaPiu'Mapp, Outdoor City Marketing and Media Rail.
Prior to the purchases, Plakanda was ranked as the No. 2 outdoor advertising company, both in terms of sales and the number of advertising panels (billboards, placards, etc.) at its disposal. With the three new companies, Plakanda will have 20% of revenue in the sector, which is 13% less than the market leader, Poznan-based Art Marketing Syndicate (AMS).
The acquisitions are expected to considerably expand the scope of Plakanda's services. IdeaPiu' Mapp offers an array of street-lamp panel sizes, while Outdoor City Marketing specializes in citylights (lighted billboards). Media Rail will offer its expertise in railway station panels. By the end of the year, Plakanda has plans to boost its rail station presence from Warszawa Centralna to a network of stations around the country, Levy said.
At present, Plakanda owns 100 backlite billboards. These megaboards are both atypical and spectacular, said Bohdan Gumkowski, managing director of Plakanda. With the acquisitions, that number is expected to increase to 129. "Media Rail brings in backlites located in Warszawa Centralna," Gumkowski said.
The finalization of the three acquisitions will strengthen Plakanda's position on the market, not only in terms of increasing its market share, but in total number of advertising panels.
The number of billboards and freeboards (free-standing billboards) will increase to 6,300 from 4,450. Citylights will boost by nearly 2,000. Plakanda will also gain 593 bus shelter advertisements, 4,990 diapasons (smaller, unlit billboards) and 970 street lamp panels.
In general, Plakanda's total advertising space, which will rise from 9,000 spaces to 19,000 "will increase by more than 100%," said Anna Nowakowska, marketing director at Plakanda. "I do believe that Plakanda has built a very good image," Levy said. At the same time, the company hopes to develop its image even more and to increase its market share. Future acquisitions will help to achieve these goals. "We're in talks with other outdoor companies," Levy said, declining to reveal the names of the firms. The possible acquisitions will be revealed soon, though, even as soon as in a month, he said.
"The market still has a very high growth potential," he added. But Plakanda, like all advertising companies, will be faced with the potentially devastating loss in revenue stemming from the ban on all cigarette advertising scheduled for the end of this year. "The market will stagnate," Levy said. Apart from that, he said, the sector needs to improve its quality.
In 1999, revenue from cigarette advertising accounted for 32% of Plakanda's advertised products. This year the number decreased to 23%. Next year such items such as cosmetics, pharmaceuticals, retailers and ".com" business will be the most visible products on Plakanda's panels.
The acquisitions are expected to boost Plakanda's sales to zl. 85 million ($19.3 million) this year.
