Competition in the elevator, who divided focus media: gross profit up to 70%!Shares are down nearly 40% from last year’s high

2022-05-23 0 By

When you get into an elevator and the door closes and the reception is poor ina small, confined space, chances are you’ll put your phone down in just a few seconds or minutes.With nowhere to put their eyes, they will stay on the frame advertisement around the elevator and the LCD screen that continuously plays the advertisement.On February 13, the Chinese times reporter visits including Beijing fengtai district, chaoyang district six district 11 detached wing elevator, in addition to relevant community near the merchants super hit “the Spring Festival is not close Discount everyday is to cater to the Spring Festival activities such as promotional ads, many advertisements are “ceng” on the focus of the Spring Festival and the games.Advertisers hope to use the bombing of elevator advertising, enhance brand awareness, to seize the mind of users.With the explosion of Internet media represented by short videos such as Tiktok and e-commerce live broadcasting, as the pioneer and industry leader of the media, can focus Media continue its profiteer business?Whether the ladder media industry will be short video and other emerging media to cut the cake?During a visit to China Times, reporters found that most of the elevator advertisements are from heineken Beer, Sunflower Pharmaceutical and other consumer industries, as well as Internet industries such as, JINGdong Supermarket and Ding Dong Maicai, as well as some home furnishing and automobile advertisements.And this is also the normal situation in the elevator advertising industry: Take Focus Media as an example, the only listed company in the industry. In the first half of 2021, 35% of the 7.3 billion yuan revenue comes from daily consumer goods, and 30% comes from the Internet industry.A research report released by Caitong Securities in October last year also showed that the top 10 brands spending on elevator TV and poster advertising from January to July 2021 were all consumer and Internet brands.Although the elevator advertisement bombards people very much vexed, but a fact is, the elevator advertisement touches and transforms the effect quite ideal.In 2018, iResearch analyzed the advertising conversion rate of all media in China’s first and second-tier cities. Elevator advertising ranked second with a purchase conversion rate of 35%, only 4 percentage points lower than Internet advertising.With a high conversion rate, media companies are not cheap to charge for advertising.The reporter learned from the media, if in Beijing area to put elevator poster advertising, an elevator of an advertising space, a week to pay 2338 yuan.Video ads cover a wider range. Take a package introduced by the staff as an example, covering one quarter of Beijing, about 5,000, and playing 60 times a day.In the package, 15-second videos for a week cost 2.438 million yuan.Trendy Media, the industry’s second largest, offers a cheaper price.Xinchao sales staff told The China Times reporter that in Beijing area 15 seconds short video 80 yuan a week an elevator, which means that if the number of points to achieve the above focus package, Xinchao only need about 400,000 yuan;Elevator posters cost two to three times as much as TV ads.At the same time, some ladder media advertising prices are also rising as the holidays.On February 12, a customer service staff member of Focus Media told The China Times that during the Spring Festival and 11th national holidays, the price of advertisements on Focus Media increased by about 20%.However, trendy media said, trendy advertising prices are not affected by holidays.The difference between focus and trendy in price adjustment during holidays lies in the difference of their coverage points.Ge Jia, an Internet analyst, said to the Reporter of China Times that Focus Media’s main business is in high-end buildings such as office buildings and buildings. This market is the main gathering place of advertisers, so the advertising price is high, but the cost is also high.On February 11, China Times contacted Focus Media by email and phone about the types of companies seeking cooperation and the proportion of changes in demand during the Spring Festival, but there was no reply as of press time.The Times of sudden profits in the media tycoon in the reporter visited the point, each elevator has five poster advertising, an elevator TV advertising space.Reporters found that most of the elevator TV screen by the new wave media laid, the majority of the elevator posters.As the first company engaged in elevator advertising business in China, Focus Media was founded in 2003 and went public in the United States in the second year, becoming the first share of China’s advertising media.After focus Media returned to A-share market in 2015, its market value exceeded 100 billion yuan.According to “China Times” reporter understands, focus media main business is building media, cinema media and other media business.In the first three quarters of 2021, the revenue of 11.1 billion yuan, building media revenue accounted for 92%;Cinema media revenue accounted for 7.5%.Before this, what ladder medium big man divides numerous medium does is “profiteer” business.From 2015 to 2018, the gross profit margin of Focus Building media has remained above 70%.By contrast, Internet advertisers’ gross margins range from 10% to 47% due to the high cost of content, according to Caitong Securities Research.In addition, in 2017 and 2018, focus’s net interest rate was as high as 50% and 40% respectively.However, as the Internet industry, a major client, reduces advertising investment, Trendy Media launches a subsidy war, and Focus Media greatly expands its building sites. In 2019, its net interest rate and gross profit rate of building media decreased to 15.4% and 47.8% respectively.The personage inside course of study thinks at that time, this is the signal of end of profiteering era of cent numerous medium.But in the first half of 2021, its net profit margin and building media gross profit margin have recovered to pre-elevator war levels of about 40% and 70.08% respectively.Caitong Securities research newspaper believes that in the first half of last year, the new consumer industry is the main reason for the rapid rebound in the company’s performance under the background of epidemic easing and improving industry environment.According to The Reporter of China Times, in 2019, Focus media began to improve the proportion of consumer advertisers in the revenue.Soochow Securities said in a research report in January this year, the Internet enterprise advertising volatility, and consumer advertisers advertising strategy is very regular, its advertising accounted for a fixed proportion of revenue.However, during this period, Focus Media is also faced with many new players of ladder media and the challenges of online media.In addition to Focus Media, which was acquired by Focus Media in 2006, In 2017, Trendy Media, focus Media’s biggest competitor, entered into the residential elevator market and launched a positive challenge to Focus Media.Since then, Ladder, City and Chinese media have entered the community building field with smart screen and frame advertising.From the perspective of the whole ladder media industry, with the explosion of Internet media represented by short videos such as Douyin and e-commerce live broadcast, advertisers’ budgets are skewed towards effect advertising.Yu Bin, an Internet analyst, said to the Reporter of China Times that focus Media has a large number of new consumers, who prefer to invest online in channels that can directly obtain customers, and will invest less and less in ladder media, which will bring certain pressure to Focus Media and may show a downward trend in the future.But Ge Jia thinks, elevator advertisement this kind of line high value communication channel, be eroded by the possibility of online media is very small.”The essence of ladder media is brand advertising. It is to expand the influence of the brand, not to emphasize the short-term transformation effect.”He said that the above emerging media is to seize the market share of the similar mode of communication of active media, media and advertising effect is irreplaceable, the relationship between one and the other.The status is difficult to shake the share price falls although the challenger is numerous, but Gejia thinks to “China Times” reporter analysis, cent numerous is in ladder medium and film medium market share rate is very high, trendy and more enter the bureau person cannot shake its leading position.From the perspective of revenue scale, the annual revenue of Focus Media will exceed 12 billion yuan from 2018 to 2020.Caitong Securities research report shows that the revenue of the three major competitors in the same period was less than 1 billion yuan.From the point of view, in the area of commercial buildings covering the first and second tier cities, zhongzhong is dominant.By the end of July last year, the self-owned equipment of Focus Elevator TV media and poster media was about 756,000 and 1.788,000 respectively.In an interview last year, Focus Media’s founder, Jiang Nanchun, said his company already accounted for 80 percent of China’s office buildings and 70 percent of its apartment buildings with elevators.By contrast, according to the official website of Trendy Media, up to now, there are 700,000 elevator smart screens and about 150,000 poster plates.However, focus media in the fierce competition is not always “stable as a bell”.In the past three years, the revenue of Focus Media has been declining year by year.From 2018 to 2020, its revenue was 14.55 billion, 12.1 billion and 12 billion, respectively.Net profit also plunged nearly 70 percent to 1.86 billion yuan in 2019 amid fierce competition.However, in the first three quarters of last year, focus Media’s revenue and net profit increased by 40% and doubled, respectively, recovering to the level of 2018, due to the resurgence of new consumer industries and the gradual reduction of the impact of the epidemic.But the capital markets are a different story: last February, after hitting a 52-week high of 12.65 yuan, its share price began to tumble.As of Feb. 14, Focus Media’s closing price of 7.99 yuan was down nearly 40% from that peak.And to ladder medium advertisement future competition pattern, have brokerage thinks, the competition between cent numerous and trendy won’t continue to burn money to expand strategy before.Caitong Securities research report data shows that in 2018, focus media’s building media point growth rate was 75.4%, but in 2019 and 2020, its building media point growth rate decreased by 6.5% and 4.74% respectively.Caitong Securities predicted that from 2021 to 2023, the growth rate of media points in Focus building will be about 10%, 10% and 5% respectively.In addition, Dongwu securities released in January this year to study the newspaper also believes that trendy first need to ensure profit, substantial expansion will cause losses.So the future two will not have the pattern of point competition.”In the face of competition, focus media takes the competitive means of entering the hinterland of the other side on the premise that they will not lose money while guarding their own territory.Under the current competition, it does not matter if the growth rate is slow. If we blindly pursue the growth rate, others may take advantage of it.Gejia so expressed.Editor: Huang Xingli Editor: Han Feng