"It is the original form of advertising, but it has been reinvented." This is how Clear Media Chairman Steven Yung describes his company's specialist outdoor advertising business.

Outdoor advertising has grown substantially in China over the past decade, and is the only media sector in which the country allows foreign investments.

Though Clear Media, as the country's largest outdoor advertising company, generates all its revenue in China, it is listed on Hong Kong Stock Exchange's main board. Yung says Chinese companies, especially the bigger brands, are, like their foreign counterparts, now aware of the advantages of outdoor advertising over TV commercials (TVCs) and print ads in brand building.

"Outdoor advertising reflects the way people live and the general trend towards urbanization," says Yung, who once held a senior management post in Coca-Cola. "People nowadays spend more time away from home.You have more affluent and mobile consumers today, so the medium that creates the biggest impact cannot possibly be confined to your house." And that's precisely what TVCs and print ads are.

The market for outdoor advertising is growing at twice the rate of the GDP. Money thus spent (known as ad-spend) in the PRC grew from 2.7 billion yuan (US$326 million) in 1996 to 9.99 billion yuan (US$1.2 billion) in 2002.

Clear Media's highly focused business model revolves around a network of bus stop panels, the largest in China. This network of 24,000 panels, with content provided by clients, provides a healthy cash flow, says Yung. And the 2003 net profit of HK$81.8 million, up from HK$71.1 million in 2002, is proof of that.

What made the more than HK$10-million-profit jump possible for Clear Media is its acquiring of 3,000 more new panels from the Beijing authorities in 2003. Apart from holding 86 per cent of bus stop panels in Beijing, the firm won the exclusive contract for all billboards at Beijing Capital International Airport's new terminal - in time for the 2008 Olympics.

The company's domination, however, is not restricted to Beijing. For it controls 98 per cent of the market in Shanghai, 99 per cent in Guangzhou and about 50 per cent in China's other key cities. Of late, Clear Media has moved into Shanghai taxi stands, though its focus is still on bus stops.

Clear Media's panels are identical with 21 fluorescent tubes at the back.

"It is a simple but hard to achieve idea," says Yung, because clients have just one design to choose from.

But isn't Clear Media more akin to an agency? "No," says Yung, explaining that his firm is not restricted to just one client from each sector - even rival companies in the telecommunication, beverage, cosmetics and pharmaceutical sectors can be "our clients".

"China has 30,000 advertisers, but we serve only the 500 blue- and red-chip companies," says Yung. "We want to work with clients who understand what advertising can do. Serving rival clients does not create a conflict of interest because we just provide the panels just as TV channels provide the slots."

But his staff fully understand the needs of the clients. Says Yung: "We are not in the market to sell panels, we are there to sell soft drinks and milk and any other product our clients want to sell. That is why we recruit the best brains from the marketing sector. Sales and marketing is a relatively new subject in China, and getting the best people is the biggest challenge."

Despite Yung's upbeat mood,outdoor advertising is still way behind other key media, getting just 18 per cent of China's ad-spend. TVCs lap up about 41.5 per cent of the ad-spend, with newspaper and other print getting 36.6 per cent. But the optimist in Yung won't give up easily. He says outdoor advertising still has plenty of room for expansion.

"Take London for example: there are about 10,000 bus stop panels in that city. But Shanghai has only 2,500. So with a population of 20 million there is plenty of room for growth."

TVCs will remain the main mode of advertising for the major brands. A growing array of channels means consumers are getting a wider range of choices, making it harder to reach them through a single dominant channel. The emergence of more and more cable, satellite and digital TV has ironically made reaching the consumers more difficult, and certainly more expensive.

And this is where Yung wants to score over his rival media. He says: "The cost of every 1,000 panels is just 5 per cent that of ads in a newspaper or TV." He agrees that "50 per cent of my advertising is wasted, but I don't know which 50 per cent." But the panels are there at prime locations and vantage points - always waiting for the potential consumer to spare a glance.

"But once you change a TV channel, or flip the page of a newspaper," the ad is lost till such time as the viewer or reader chances upon it the next time - that is, if the ad is repeated, at all.

Producing a TVC is more time consuming, making it more difficult to respond to emergency situations. Yung cites a client's demand for an LCD display while updating China's medal tally thrice a day during the recent Athens Olympics. "It was a powerful and innovative idea and the client essentially used our operation as a broadcast network."

But despite Yung and his colleagues' buoyancy, they're still reluctant to invest in strategically vulnerable media. "Advertising at bus stops is regulated very tightly. You can't just put up your own ad at one of them," Yung says.

Efforts by the authorities to bring into line chronically unregulated advertising for major international events such as the 2008 Beijing Olympics and the 2010 Shanghai Expo are also a deterrent for Clear Media to move away from bus stop panels (though the company does have a small number of "unipoles" near major highways in Shanghai and Beijing.)

And this is how Yung explained his fears of venturing into another media: "We don't know which direction the authorities will take. If they go the way of Singapore, where the airport-downtown stretch has to be ad free, you will lose your business. So we will have to wait for the rules."

(HK Edition 12/28/2004 page16)