Petrol forecourts fuel advertising revival

YOU might have thought that the four minutes you spend each week filling up your car with petrol was your own. But it isn't. Increasingly that space and time is being filled with ads.

By InvestSMART · 6 Dec 2010

By InvestSMART ·
6 Dec 2010

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YOU might have thought that the four minutes you spend each week filling up your car with petrol was your own. But it isn't. Increasingly that space and time is being filled with ads.

After years of occupying the unsexy, not to mention, grimy end of outdoor media, the market for advertising on petrol forecourts appears poised for a resurgence.

A former Macquarie Bank staffer has signed a deal to put ads on petrol pump nozzles at 400 Woolworths petrol forecourts.

Meanwhile, an Australian company is expanding its network of TV screens on BP petrol pumps in Australia and is taking the media into Shell stations in China.

Both appear to be benefiting from a strong demand by advertisers for ads placed in or around shops prompting consumers to choose their brand over a competitor's.

Chaz Heitner, who worked in mergers and acquisitions at Macquarie, set up Seemedia in June 2009 after acquiring the licence from his father, Brian.

The Woolworths deal will bring his network of petrol stations to more than 750 by next April, giving advertisers a reach of more than half a million motorists a day.

Mr Heitner said he took on the licence because he saw the size of the opportunity in petrol nozzle ads in other markets such as Britain and Germany, where the licensor FillBoard is based.

"Ten years ago when my father was trying, it was very different. Coles and Woolies were just entering the market and were busy bedding down their networks and didn't really have time to think about partnering in new ventures," he said.

At its peak his father's company, Out There Advertising, reached 300 forecourts, which was not a large enough universe to attract national advertisers, nor did it have specialist sales staff to sell it.

Mr Heitner says he has the scale and staff to succeed and adds that he can command a premium on billboards and posters.

Media buyers such as Jo Dick, head of outdoor at media agency OMD, say petrol stations have yet to enjoy the same strong levels of demand of other outdoor and ambient media venues such as shopping malls and airports.

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Frequently Asked Questions about this Article…

What is petrol forecourt advertising and why is it seeing a revival?

Petrol forecourt advertising means placing ads on and around petrol pumps, pump nozzles and in forecourt shops. After years as a low-profile part of outdoor media, the format is enjoying renewed interest because advertisers want point-of-sale and point-of-decision exposure that can prompt motorists to choose one brand over a competitor.

Who is Seemedia and what deal did it sign with Woolworths petrol forecourts?

Seemedia, set up by former Macquarie M&A staffer Chaz Heitner in June 2009 after acquiring a licence from his father Brian, signed a deal to place ads on petrol pump nozzles at 400 Woolworths petrol forecourts.

How large is Seemedia’s petrol forecourt network and what reach does it offer advertisers?

The Woolworths deal will expand Seemedia’s network to more than 750 forecourts by next April, providing advertisers with a claimed reach of more than half a million motorists a day.

Which other companies are expanding petrol-pump media like TV screens and international rollouts?

The article notes an Australian company is expanding its network of TV screens on BP petrol pumps across Australia and is also taking that forecourt media into Shell stations in China, reflecting broader growth in the channel.

Why are advertisers attracted to placing ads in or around petrol forecourt shops?

Advertisers value forecourt and in-shop placements because they reach consumers at the point of purchase or brand choice, increasing the chance a motorist will pick one brand over another — a key reason demand for these placements is rising.

How does demand for petrol station advertising compare with other outdoor venues like malls or airports?

Media buyers such as Jo Dick, head of outdoor at OMD, say petrol stations have not yet enjoyed the same strong levels of demand as other outdoor and ambient venues like shopping malls and airports, even as interest is growing.

What is the licensing and historical background behind petrol pump nozzle ads mentioned in the article?

Chaz Heitner took on a licence (acquired from his father Brian) to operate petrol nozzle advertising under Seemedia. The article also references FillBoard as a licensor based in markets such as Britain and Germany, where similar forecourt ad models have been used.

What should everyday investors look for when evaluating petrol forecourt advertising businesses?

Investors should watch for scale (number of forecourts and daily motorist reach), long-term contracts with major retail partners like Woolworths, the ability to command premium rates on placements, specialist sales capability, and how advertiser demand compares with other outdoor channels — all factors highlighted in the article.