Green Tongues: Business Plan for Solar Billboards in GCC

Company Overview and Mission

In an age where seemingly every product and service niche is already occupied, identifying new opportunities in the marketplace has become especially challenging. Yet truly timely solutions emerge from time to time that optimally match current and projected demand in ways that distinguish them from competitors. This is certainly the case with solar-powered billboard technology today, particularly in areas where deployment represents a cost-effective marketing alternative.

Green Tongues is an advertising company that provides environmentally friendly advertising solutions to companies that value their environment and want to give back to the society in which they operate. Green Tongues envisions itself becoming the premier advertising company in the near future across the entire Gulf Cooperation Council (GCC) region, as consumers and businesses there are slowly beginning to recognize the importance of environmental conservation.

The six member states comprising the GCC — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates — are well positioned to become an increasingly important consortium economically and politically. For instance, Siddiqi (2006) reports that during the period from 2001 to 2006, the GCC economy more than doubled in size in nominal dollar terms to approximately $723 billion. A study conducted by the Institute of International Finance (IIF), an association of private banks headquartered in Washington, D.C., determined that collectively the GCC comprised the 17th largest economy in the world, ranking just below the aggregate gross domestic product (GDP) of the Russian Federation at $763 billion (Siddiqi, 2006). More importantly, Siddiqi concluded that current trends indicated the GCC would become the world's 10th largest economy by 2016.

This impressive economic performance is attributed in part to skyrocketing oil and gas prices, but there are signs that GCC governments are reinvesting their profits into a wider range of industries in an effort to diversify their economies and improve environmental sustainability practices (Siddiqi, 2006). For example, Siddiqi notes that "there are encouraging signs that the energy-rich region is actually deploying surplus petrodollars (windfalls) to more prudent use — unlike the spending binge of the 1970s and early 1980s" (2006, p. 410). Moreover, government investments in the private sector are expected to fuel demand for alternative marketing methods that reflect this increased focus on environmentally responsible solutions. In this regard, Siddiqi reports that Moody's Investors Services noted that throughout the GCC, "a higher proportion of [oil revenues] has been saved than previously, while extra government expenditure has been focused more on capital than on current spending. Most governments are also proceeding with structural reforms aimed at boosting the private sector" (2006, p. 41).

There are also significant trends discernible throughout the GCC with respect to increases in disposable incomes being earned by a growing upper middle class. The International Monetary Fund reports that real economic growth averaged nearly 6% per year during the period from 2000 to 2005, with corresponding increases in per capita GDP (Siddiqi, 2006). Although this rate varies significantly from emirate to emirate — $12,600 in Saudi Arabia versus $51,975 in Qatar in 2006 dollars — the GCC states in aggregate enjoy a healthy economy with a generous social welfare system and social indicators on par with the Western world (Siddiqi, 2006).

The company's target market will consist of enterprises in the GCC region that are dissatisfied with traditional advertising concepts and seek a more creative and innovative approach to communicating their message to consumers. This target market includes all firms — public or private, profit or non-profit — that want to support the environment by using commercial advertising media such as solar-powered billboards. A summary of relevant economic data for the six GCC member states is provided in the table below:

Table 1: Current Per Capita GDPs of GCC Member States (2010 est.)

Bahrain: $40,300 | Kuwait: $48,900 | Oman: $25,600 | Qatar: $179,000 | Saudi Arabia: $24,200 | United Arab Emirates: $49,600

Source: CIA World Factbook, 2011

All of the GCC member states have a healthy per capita GDP, but Qatar leads the group by a considerable margin with an impressive per capita GDP of $179,000.

Environmental and Industry Analysis

In the dynamic marketing environment emerging in the GCC, identifying opportunities to capitalize on enormous governmental investment in the private sector represents a timely and valuable enterprise. The use of environmentally friendly advertising platforms has become increasingly popular in recent years. For instance, an electronic billboard entirely powered by the sun and wind was installed in New York's Times Square in December 2008. According to Lloyd, "The 'eco-friendly' billboard is the first of its kind in Times Square and the eastern United States, the second in the United States and the third in the world" (2008, para. 2). The billboard was designed for Ricoh Americas' parent company, Ricoh Company Ltd. of Tokyo. It measures 47 feet (14 meters) high by 126 feet (38 meters) long, and its floodlights are powered on-site by 45 solar panels and four wind turbines (Lloyd, 2008).

Major corporations such as News Corp., which currently leases thousands of billboards, could significantly reduce their carbon footprint by switching to renewable energy sources (Sheppard, 2010). Even more fortuitously, the introduction of solar-powered billboards is especially timely given the GCC's planned railroad grid across the Arabian Peninsula, which would improve the strategic export reliability of oil, gas, and other resources (Sheppard, 2010). A report from Bains (2008) also notes that solar-powered billboards have recently been installed in San Francisco, Africa, and Canada. According to Bains, "PG&E (Pacific Gas and Electric Company) installed the nation's first solar-powered billboard at 1000 Brannan Street in San Francisco this January. Visible from I-101, the billboard, which contains 20 solar modules, can generate 3.4 kilowatts of power, more than enough to illuminate the billboard at night. The excess electricity is fed back into the grid. PG&E also changed the billboards' lights to more energy-efficient LEDs" (Bains, 2008, para. 2).

The billboard was installed by PG&E as part of a larger marketing campaign intended to promote public awareness of the company's commitment to adopting environmentally responsible solutions. According to PG&E's senior vice president of corporate relations, "As a leader in the fight against climate change, we're always looking for new ways to educate our customers. With this solar-powered billboard — the nation's first — we increase the amount of clean, renewable energy we provide our customers. We also hope to capture the imagination of Americans about the actionable steps one can take to reduce their environmental impact" (quoted in Bains, 2008, para. 3). The PG&E billboard followed the installation of two other solar-powered billboards in Canada and South Africa. The first solar-powered billboard in the world was installed by Nedbank in South Africa in mid-2006; it generates enough surplus energy to power a kitchen at a local primary school. Bains adds that "the electricity generated by the billboard feeds more than 1,400 children each day, and saw the bank scooping South Africa's first ever outdoor Grand Prix Award at the 54th Cannes Advertising Awards" (2008, para. 4).

Although the specific technological applications used in the solar-powered billboard array described herein differ in their particulars, the underlying concept — using renewable energy sources — is essentially the same. The ability to deploy solar-powered billboards in the otherwise hostile environments that characterize much of the GCC states is therefore a viable marketing approach, and one that is especially well situated to take advantage of the GCC railway grid connecting the member states. This railroad grid consists of hundreds of miles of potential billboard sites, and the ability to continuously power these billboards using solar energy makes them particularly suitable applications. According to Blanche (2011), "Middle East governments have committed more than $100 billion to railway projects in the coming years. Saudi Arabia is the driving force in the drive to build the rail network linking the six Gulf Cooperation Council countries" (p. 13).

The rail network will be highly suitable for billboard deployments based on its focus on light rail passenger services, with Dubai becoming the first member state to complete a metro system in September 2009 (Blanche, 2011). Forecasts indicate that these trends will continue well into the future, fueled by ongoing financial investments from the GCC member states. Blanche reports that "business on the $28 billion system has already doubled amid predictions that in 10–15 years around 80% of the GCC's population will be living in cities. Taking their lead from the golden days of European railways, the six GCC states are planning ambitious rail systems to carry both passengers and freight" (2011, p. 13).

This regional network will require between $30 billion and $100 billion to complete and will ultimately include about 1,500 miles of track in a region that has lacked any substantive railway transportation in the past (Blanche, 2011). Scheduled for completion by 2017, the railway system is currently planned to be extended further throughout the region to link other major cities. One major associated project is the 245-mile Haramain High-Speed Rail between the holy cities of Mecca and Medina, priced at $7 billion and intended to transport the 10 million Muslim pilgrims who complete the Hajj each year (Blanche, 2011). Scheduled for completion in 2013, this railway system will become part of the larger network being constructed throughout the region.

In fact, the railway system being constructed throughout the GCC grid will eventually connect to other railway projects currently on the drawing board or already under construction (Blanche, 2011). According to Blanche, "Other states in the Middle East and North Africa have also drawn up ambitious plans for rail systems that could eventually connect with the GCC grid north through Iraq to Turkey — although right now Iraq's stability is uncertain — and the Mediterranean" (2011, para. 4). Additional routes are planned for the Jordan-to-Syria connection as well as through North Africa and Europe, with the potential to expand further into burgeoning Asian markets (Blanche, 2011). Taken together, the market for solar-powered billboards is growing rapidly in the GCC, and the company's primary product is well positioned to satisfy this demand.

Products, Services, and Pricing

The company's primary product will be environmentally friendly solar-powered billboards, projections, and cling advertisements that adhere to smooth glass surfaces. According to Reichert and Lambiase, "Although billboard advertising ranks behind all major media forms in terms of total advertising revenue, it is an important part of the media mix for many products. Billboard advertising is unique because it can reach a large number of viewers, and these viewers have only a few seconds to process the message" (p. 107). Despite some backlash from conservationists who decry the visual impact of billboards in densely populated regions, billboards continue to gain in popularity among companies of all sizes for several reasons:

1. Billboards provide companies with a larger-than-life image.
2. Billboards can help reach a large audience of potential new customers. Placed in the right location, a billboard can be seen by customers and prospects several times a day and reinforce messages sent via direct mail, television advertising, or other media outlets.
3. Billboard advertisements are, for the most part, exposed for an extended period of time. In most cases, billboard advertising space is sold on a monthly basis, and space is typically purchased several months in advance (Ginyard, 2003, p. 120).

The company's pricing strategy for its solar-powered billboards, projections, and cling advertisements will follow a penetration approach: the company's leadership team will aim to penetrate the market with more competitive prices than those offered by competitors. Lower electricity consumption will result in lower operating costs, and the marketing department plans to pass these savings on to consumers as lower prices. The corporate strategy, in essence, will be to provide the same advertising medium at a significantly lower cost than traditional competitors.

References

Bains, K. (2008, January 9). Solar powered billboards in San Francisco, Africa, and Canada. Solar Power Authority. Retrieved from

Blanche, E. (2011, February). Gulf rail network: The dream becomes reality. The Middle East, 419, 12–13.

Elefant, C. (2011). The 'power' of social media: Legal issues and best practices for utilities engaging social media. Energy Law Journal, 32(1), 1–3.

Ginyard, R. (2003, June). Marketing matters. Independent Banker, 53(6), 120.

Keay, J. (2011, April). A region in transition. Global Finance, 25(4), 2–4.

Lloyd, R. (2008, July 2). Times Square gets solar-powered billboard. LiveScience. Retrieved from

Reichert, T., & Lambiase, J. (2003). Sex in advertising: Perspectives on the erotic appeal. Mahwah, NJ: Lawrence Erlbaum Associates.

Sheppard, K. (2010, July/August). Fair and … carbon neutral? Mother Jones, 35(4), 42–44.

Siddiqi, M. (2006, December). Gulf Cooperation Council goes for growth. The Middle East, 373.