MediaWorks Secures Major Outdoor Advertising Contracts Worth Hundreds of Millions

MediaWorks has made a significant move in the outdoor advertising sector by winning a series of high-value contracts with Auckland Transport (AT). The deals, which are expected to be worth over $350 million over the next decade, involve managing advertising across AT's buses, billboards, bus shelters, and train stations. The new agreement will take effect on October 16, marking a major shift in the industry.

The contracts, which are spread across four key areas—street furniture, vehicles, transport hubs, and billboards—will see MediaWorks take full responsibility for the advertising on AT's public transport network. This is a big win for MediaWorks, which is now 100% owned by Australian outdoor advertising firm QMS. The news has sparked speculation about whether MediaWorks will retain its radio arm or focus solely on its outdoor advertising business.

MediaWorks currently manages advertising on AT buses and some billboards and was long seen as the favorite to win the contracts. However, other major players in the industry, such as oOhmedia, JCDecaux, and Go Media, were also in the running. The deal will be a major blow to oOhmedia, which currently handles advertising at AT bus shelters.

AT’s chief financial officer, Mark Laing, expressed his enthusiasm for the partnership, calling it a “game changer” for the out-of-home media industry. He said the new agreement would lead to a significant increase in advertising revenue, with AT expecting to receive at least $220 million over the next 10 years. This represents a major increase from the $7 million in advertising revenue the company currently earns, which is expected to more than double in the coming year.

Laing also highlighted how the additional revenue will help offset the costs of operating public transport services and bring Auckland closer to meeting the government’s “private share” targets for public transport. He emphasized that the new deal would allow AT to receive more than half of the gross advertising revenue from its out-of-home media assets, up from the current quarter.

MediaWorks’ chief executive, Wendy Palmer, described the win as a “game changer” and said it would reshape the way advertisers plan and buy out-of-home media in New Zealand. The company plans to increase the digital capabilities of the street furniture network, adding more digital assets and offering new audience-informed advertising packs to make it easier for advertisers to do business with them.

MediaWorks and QMS chairman, Barclay Nettlefold, said the new deal has firmly established MediaWorks as the number one out-of-home operator in New Zealand. He also highlighted the growing trend of trans-Tasman trading and how the shared expertise between QMS and MediaWorks will provide greater opportunities for media agency partners and their clients to plan and buy across both markets.

The tender process, however, was not without its challenges. The procurement process had been delayed for almost 12 months, with AT initially aiming to have the new deals operational from January 1. The process was extended after AT decided to pull the pin on the RFP (request for proposal) in December, citing a need for further review of market dynamics and transition risk. The decision left the industry frustrated, with some sources calling it a “clusterf***” and pointing out that AT had not clearly understood the scope of the project.

Despite the delays, the new deal marks a significant milestone for MediaWorks and signals a new era for the outdoor advertising industry in New Zealand.