Ad firm must consider consumers' rights
By Chen Weihua (China Daily)Updated: 2007-03-06 13:57
China's largest out-of-home multi-platform lifestyle media
company Focus Media Holding Limited has been a media darling since it was first
listed on the NASDAQ in 2005.
Since then, the company's Chairman and CEO Jiang Nanchun has made frequent TV appearances and won several business awards.
Now, Focus Media is back in the headlines since it announced on March 1 that it would take over the largest Internet advertising service company in China, Allyes Information Technology Co Ltd.
The deal is one of many major purchases Focus Media has made during the last two years. Its biggest purchases during this time included Framedia, which operated a network of print ads mounted in public places such as elevators and bathrooms, and Focus Media's archrival in the flat-panel display market, Target Media.
Last May, Focus Media launched its outdoor LED advertising network, which used large digital billboards installed along the roadsides of areas in Shanghai with high levels of pedestrian traffic, such as major shopping districts.
Focus Media has also aggressively expanded into Hong Kong, Taiwan and Singapore.
Its unaudited 2006 financial results released on February 26 revealed a net income of $83.2 million in 2006, up 253.3 percent over 2005.
But a large chunk of Focus Media's business, as stated in its 2006 report, comes from its flat-panel displays in residential and commercial buildings, print ads in elevators and large LED screens along Shanghai's streets.
The company has built a reputation for its aggressive pursuit of this emergent advertising approach.
However, Focus Media might be caught up in risky business as an increasing number of Chinese become aware and concerned about their rights and the environmental pollution caused by such ads. Today, some Chinese are naming these flat-panel LED screens and print ads posted in elevators as sources of audio and visual pollution.
Because public awareness and concern about consumers' rights and environmentalism remains relatively low, Focus Media could enjoy robust growth during the near future. However, the business' days might be numbered, as people in major metropolises such as Shanghai are struggling to find places of tranquility.
(For more biz stories, please visit Industry Updates)
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