I f JCDecaux

First Annual

Los Angeles World Airports Airport Advertising Concession Year End Revie~e: vee-. \'7 ~.z,

Submitted in ~ Committee

Council File No: ~ ·- . 3 Z-cfJ .£

Item No.: . . . .... ,_

Deputy: f?il (_, VtlLANU•

Prepared by JCDecaux Airport, Inc. April 22, 2008

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JCDecaux A World Leader in Out-of-Home The Group has operations in 54 countries a presence in 3,375 cities

#1 Worldwide in Street Furniture Advertising #1 Worldwide in Transport Advertising #1 Worldwide in Airport Advertising -145 concessions in 16 countries #1 Worldwide In Transport Advertising- 300 transport contracts in subways,

buses, street cars & trains European Leader in Billboard Advertising

JCDecaux North America A Leader in Airport, Mall and Street Furniture

4 out of 6 top US Cities 98 Shopping Malls 32 Airports

JCDecaux reaches an estimated 276 people worldwide every day.

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Advertising Concession Partners JCDecaux put together a team that has proven to be perfectly suited to make the most out of the Los Angeles World Airports advertising concession.

}Perez Associates, Inc. • A certified ACDBE headquartered in LA County • One of the nation's largest full-seNice outdoor installation & maintenance companies • Installation and maintenance seNice provider for both LAX and ONT

Venture Partner, with a 7.5 % ownership in the contract • Already recouped a significant portion of their initial investment in the first year

BaumanCurry & Company ·A Certified DBE/MBE!WBE based in LA • Known for their work with ethnic minorities in the areas of strategic media, social marketing

and public education programs • Provides targeted local advertising sales • Sold the single largest advertising contract to date for a total of $5 million at LAX and ONT

The Wilkinson Group • A global leader in sponsorship marketing responsible for over $1 .3 billion in cash

sponsorship and integrated marketing contracts • Created the modern age of Naming Rights and Sponsorship Partners with AT&T Park,

a $50,000,000 deal • Developed Cisco Field's Global Sport and Entertainment Venue strategy • Now working with LAWA to develop marketing and sponsorship potential at LAX and ONT

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Airport Advertising Concession Progr___:a_:__m ____ _ During the first 12 months of operation of the Arport ;C\dvertising Concession at LAX and ONT, working in close relationship with LAW/\s staff and management JCDecaux and its partners have fullv delivered on - and often exceeded - the commitments we made in our proposal

The program implementation began in April 2007 and has been installed in phases. Today, there are 340 units installed in LAX and 53 units in ONT

We have, in particular • Generated significantly higher revenue than originally projected • Rolied-out the most innovative airport advertising program ever in a US Airport

showcasing high-quality fb<tures and technology • Kept clutter to a minimum by drastically limiting the number of advertising fib<tures in

the terminals (less than half the number of signs found in other major US airports such asJFK)

• Improved the passengers' experience by providing seNices (PowerPoles, Recycling Airport Amenity Units (MUs), Interactive Visitor's Centers) and entertaining video stimulation (Prestige Digital Units (PDUs), Hollywood Network)

• Fostered meaningful ACDBE participation for both sales and maintenance seNices

In addition, we have presented several new high-value opportunities to LAWA for approval (sky bridges, jet bridges, garage sponsorships, pouring rights), further increasing the concession's revenue potentiaL

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Advertising Concession Revenues

First Year Advertising Revenue and Rent Payments Year one gross revenues and percentage rent payments have exceeded the projections in the Proforma submitted in response to the RFP by more than 72%.

YEAR1 MAG YEARS MAG

actual Sales

.. '-!)wi, $14;po5;QOQ ; f<evenue. ··•·•·•·· ••

1. . .. I ·········j·

1,520,000

proforma .S.ales ..... !I

·.· ·." ·.·.····. ·.·.··.·.··. .·.' .. ·· .. · ... ,···. ··. '.· ... ··.·.· .. ·.·.: .. ·.· .. · .. ·.·.· .. ·. -.. ·· .. · , .. · .. -.. · .. • · .. ·•·.• .. ····:: I • LAW!;. ···· $8 400 000 i 'Revenue "--_---! > .-. _, -. _"· .. -- _;

$560!,000

so S5M $10M '$15M

I )rl $2,172,000

$20M

LAX

111111 ONT

$25M

Year 1 Percentage Fee payments exceed the contractual Year 6 MAG by more than .1 0%!

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Accom}1lishments The advertising display program instalied year redefines State-of-the-Art

• Most innovative airport advertising display plan in history • 8 JCDecaux exclusive products, including multiple world premieres • Less signs, more technology

Prestige Digital Unit (PDU) • Designed to integrate passenger services with head-on advertising displays • Netvvork of 23 Freestanding Digital Displays, with back-to-back 70" LCD Screens • Content currently consists of an advertising loop of up to 6 semi-animated ad

spots lasting 10 seconds each • First in-concourse digital network in the U.S. ·Same displays being installed in JFK, MSP, DAL, IAH and SAN in 2008 • Similar in-concourse networks being launched in London Heathrow, Shanghai

and Dubai International Airport this year

Airport Amenity Unit (AAU) • Designed to integrate passenger services with head-on advertising displays • Each unit features a scrolling face on one side, enabling up to four

advertisers to be at a single location • The base of the unit is fitted with trash and recycling receptacles

Airport Terminal Directories • One Directory located at the entrance of each terminal • Each unit features a Directory top sign above a terminal map

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Accomplishments cont'd

Business First Scrolling Panels • Network of advertising displays including one vertical scrolling panel outside

of every airline lounge at LAX • Allows advertisers to easily reach all of the business travelers • Part of a national airport network, including the New York, Washington DC,

Minneapolis and Miami airports

Power Poles • 51 units providing power outlets to passengers at standing level, close to

gate hold rooms and food courts at LAX • Branding by Samsung associates them with this positive passenger service • Program generates more than a million dollars annually • Product has proven so successful that together, JCDecaux and Samsung

are now launching similar concepts in airports throughout the world

Interactive Visitor's Centers • The next generation of services for all arriving travelers • Located in every baggage claim area, the unit's interactive touch

screen monitors allow passengers to access detailed information about transportation services, hotel accommodations, restaurants, airport information and civic activities

• Integrated printers allow for directions and coupons • 70" LCD screens provide additional advertising and LAWA announcement

opportunities • Partnered with LA Inc to provide local content

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LAX THE TRAVEL

ISSUE

LA GETAWAYS PLAY TOURIST IN

YOUR OWN TOWN

EGO-TOURISM YOUR GUIDE TO

GUILTLESS TRAVEL DESTINATIONS

OEST!NAT!ON BAJA SUN, SAND AND SURF

SOUTH Of THE BORDER

EVA LONGORIA

Accomplishments cont'd

LAX Magazine • LAX to be the first airport ever with their own branded magazine • Free magazine distributed quarterly ·Approximately 150,000 copies per issue placed in 100 locations

throughout the terminals • Provide travelers with features on Los Angeles area lifestyle and culture

including interviews with local celebrities and civic leaders • LAIN A to receive six pages per issue for LAX information, including

terminal maps, transportation and construction updates • Advertisers already committed include Marriott Newport, Coastal Villas,

Roosevelt Lofts, Ago Restaurants, Hacienda Hotel, Hilton LAX Airport, Elite TraveL Crustacean Restaurant

• First publication scheduled for July 2008 • Published and distributed at no cost to LAIN A with the potential lor profit

sharing

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Pipeline Advertising Initiatives

Hollywood Network • Developed specifically for LAX to create a sense of place • Reinforce LAX's role as the gateway to the motion picture capital of the world • In every LAX terminal one 6'x12' backlit display with an embedded 56" LCD screen • Units not originally designed to have audio capabilities • The entertainment industry requires sound to run movie trailers • A final demonstration is pending to incorporate sound

Welcome Wraps • As part of our submittal we planned to install one large 'Welcome to Los Angeles"

wrap in each terminal • fv1andated that advertisers must include welcome message and 50% Los Angeles

imagery in these locations • lv1ultiple clients refused to execute contracts under these parameters. • JCDecaux created permanent locations for Welcome to Los Angeles Wraps without

advertising and used other locations for "pure" advertising • JCDecaux committed to fund the production and installation of the "Welcome to

Los Angeles' wraps • Currently working with LA Inc for local content design

" The airport's initial requirement for a Welcome to LA message took away the client's creative power and did not fall in line with the overall campaign image. Dropping this requirement allowed the client to take full advantage of the premium placement of the unique space."

Emily Russell, Out of Home Buyer GSD&M

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Pipeline Advertising Initiatives

Sky Bridges • Proposed advertising banners affixed to traffic-facing side of all LAX sky bridges • Conceptual approval granted January 2008 • EPMD and Project Planning currently reviewing the proposal for construction approval • Potential Annual Revenues $4,000,000

JetBridges • Proposed branding to be affixed to the exteriors of all LAX jet bridges, extending from the

terminal to each airplane and wraps affixed to the interior walls of ali LAX jet bridges • Letter of Intent from HSBC for Terminals 2,4,5 and TBIT plus the first Skybridge for a five

year contract generating $1g,ooo,ooo • Conceptual approval granted for TBIT only • No guarantee that HSBC will proceed with the program with only one terminal available

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Pipeline Marketing Income Initiatives

Travelers Aid • Non-Profit Organization that currently operates nine 'Welcome Stations,' one in

each terminal's arrival area, funded by LAWA • Seeking sponsors to fund the program and provide training programs,

computers and uniforms for an enhanced service to travelers ·Targeted sponsors include UPS, FEDEX, Yahoor

Parking Garage Sponsorship • Interior and exterior branding opportunity combining traditional display signage

services, such as valet • Similar programs have been successfully implemented in Portugal and Spain • Targeted sponsors include the automobile industry

Promotions • Potential programs include both product sampling and entertainment themeing • Targeted Product Promotions include sampling such as Kleenex, Trident Airborne,

Dunkin Donuts and Equinox • largeted Entertainment and Therneing Promotions include television stations, the

and music industry and retail stores

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Proposed but not Accepted Marketing Income Initiatives

Pouring Rights • Retained a consultant for pouring rights work • Created an RFP to award beverage rights at LAX • Anticipated submittal responses from Coca-Cola, Pepsi and Cadbury Schweppos • Pouring Rights have boon successfully implemented in Dallas-Fort Worth Airport,

generating significant revenues ·Instructed by LAWA on 12/24/07 to hold off on the initiative until it is determined that the

food and beverage concessions, as well as the pubiic, will not be unduly burdened

Merchandising • To be re-evaluated at a later time

Naming Rights • To be considered in the future

ATM and Financial Service • Discovered that the current concessions generate more revenue than

the sponsorship potential

Airport Radio • LAVVA does not wish for any additional sound in the terminals

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Client Quotes " The variety of unique locations in the highest traffic areas of LAX allows us to make the most of our client's creative messaging throughout the airport The head-on read and visibility of the Airport Amenity Units makes a much larger impact than the standard airport diorama."

Emily Russell, Out of Home Buyer GSD&M

" We strongly believe our airport advertising for Atonement generated new buzz for the film that we seldom receive through more traditional channels We are reminding people to go see this extraordinary film and during Awards season we are reaching out to the Hollyvvood community who travel the LA- NY corridor Our advertising at JFK and LAX has been a real success."

Robert Wilkinson, VP of Media Research Focus Features

" If you look around LAX these days, you see a lot more travelers with mobile phones, laptops, and other personal electronics. Samsung Mobile and LAX are meeting the needs of these travelers with the Samsung Mobile Charging Stations in collaboration with JCDecaux."

Kim Titus, Director of Public Relations Samsung Mobile

" We were one of the first advertisers at LAX and ONT and felt the display location choices were awesome. The displays have heightened the San Manuel name recognition and enhanced our brand image. Passengers can't miss our billboards. We are pleased to be committed long-term at LAX and ONT'

jon Valerio, Media Buyer San Manuel Indian Bingo and Casino

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