Inclusion of SMMEs in outdoor advertising space critical

11 May 2016

 

Emerging players in the lucrative outdoor advertising industry in Johannesburg have called for the “levelling of the playing fields” in order for them to participate meaningfully and grow.

 

The call was made at the Outdoor Advertising Indaba organised by the Johannesburg Property Company (JPC), the City of Johannesburg's property entity, on Tuesday May 10.

The meeting, held at Indaba Hotel in Fourways, heard that racism and the lack of transformation were holding back black participants, with 95% of the business still controlled by less than 5% of the industry players.

“We're not afraid to compete. Give us an equal opportunity to compete and grow. We mean business and are in it for the long haul,” said Joyleen Mahanetsa of Outsmart Outdoor Advertising.

The industry generates about R32-billion in revenue a year, according to Peter Lindstrom, chairman of the Outdoor Home Media of South Africa.

According to JPC Managing Director Helen Botes, the City has more than 30 000 forms of street furniture and street poles, 732 billboards, 3 800 signs and 130 cellular masts and antennae. However, of the 732 billboards, 156 are illegal and 557 are not compliant with by-laws, costing the City millions of rands in lost revenue. Botes said legal action against by-law transgression was usually time-consuming and costly. She said it was therefore important for the industry and the City to create partnerships to regulate the industry.

“The industry has progressed significantly over the past two decades, which was to be expected with the economic growth of the city. However, recognised SMMEs have not increased by number or diversity. At least 95% of billboards are owned or controlled by less than 5% of media players,” Botes said.

Lindstrom evoked strong reaction when he told the gathering that clients preferred to work with big companies. His Outdoor Home Media represents 220 companies and is one of the five dominant players in the industry.

Mzwanele Manyi, who was directing the proceedings, said it was unacceptable that a few players still dominated the industry.

“Why are you allowing yourselves to be racist by not using black companies?” he asked Lindstrom.

“By continuing this trend, dominant companies are stealing from the City and impacting on service delivery.”

Lindstrom said although the industry was well regulated, by-laws were poorly enforced. He said quicker turnaround times on applications and tighter by-law enforcement would go a long way in resolving the issues.

Member of the Mayoral Committee for Economic Development Councillor Ruby Mathang conceded that the City needed to streamline the application process. He announced an amnesty for those that comply with by-laws but warned those resisting change –- including those using fronting to short-circuit transformation – that their contracts would be cancelled.

“This meeting of industry players was long overdue. The outdoor advertising industry is extremely important to the City. We're sincere in wanting to work with you and we hope to find common ground. [But] if you don’t play ball, your contracts will be cancelled. The inclusion of SMMEs is a priority for the City to allow those on the margins to participate in the economy,” he said.