In a public toilet outside Paris, Jean-François Decaux lays out his plans to conquer America. His company, JCDecaux, has become the world’s biggest outdoor advertiser by building posh potties and slick bus stops designed by the likes of Norman Foster and Philip Cox and plastering them with ads. While the French company operates in more than 1,800 cities across the globe, from Berlin to Bangkok, it has just 3 percent of the U.S. market. “We’ve had to create a new way in,” says Decaux, co-chief executive of the company his father founded.
A recent deal with Chicago to erect 34 massive digital billboards, expected to generate $700 million in ad revenue a year, will help JCDecaux catch up in the U.S., Decaux says. Chicago will collect 40 percent of the proceeds: Decaux hopes the deal—one of the most prominent uses ever of billboards on public land in the U.S.—will serve as a model for other American cities.
By yearend, JCDecaux will install the billboards, which resemble giant iPads with LED displays on both sides, along Chicago expressways. They’ll post emergency information such as weather or missing person alerts between eye-grabbing ads that will change as often as eight times a minute. Until now, JCDecaux has had no U.S. billboards, in part because of restrictions in the 1965 Highway Beautification Act that make it difficult to build new ones. Clear Channel Outdoor (CCO) and CBS Outdoor (CBS) control about 80 percent of the billboard space in the top 20 American markets, Decaux estimates. “With Chicago, this is about creating a billboard network from scratch,” he says.
JCDecaux typically builds new spaces for ads that benefit cities, such as $100,000 street toilets in Germany and the Vélib’ bike-sharing program in Paris. America’s love affair with cars, though, has left the U.S. with relatively few thriving city centers, the natural home for JCDecaux’s street furnishings. While the company runs ads in some U.S. airports, has installed Philippe Starck-designed street lights around San Francisco, and has built Robert A.M. Stern-conceived bus shelters in Chicago, the U.S. accounts for just 7 percent of JCDecaux’s revenue.
The company’s roots go back to the 1950s, when founder Jean-Claude Decaux sped around Lyon on a Vespa scooter, his wife on the back holding a bucket of glue, posting bills on walls. In 1964, JCDecaux built its first bus shelters in the city in exchange for the right to put ads on them. Over the years it’s developed a Japanese bus shelter tall enough for a bicyclist holding an umbrella to pass under and a street toilet with a hand dryer and self-cleaning floor now in use in 25 locations in San Francisco. It’s about to install 1,000 ad-laden street clocks in São Paulo, ahead of Brazil’s hosting the 2014 World Cup and 2016 Summer Olympics.
Next the company hopes to win some of the 100 billboards that may soon become available in Los Angeles, and it’s seeking to build 800 phone booths in New York City, which could draw $50 million a year in ad fees. Says Berenberg Bank analyst Sarah Simon: “Most cities could do with more cash, and you can assume that JCDecaux will be going to visit a lot of the mayors in the U.S. from now on.”