Tuesday, June 25, 2024

Westfield owner bets on ad sales at its Europe shopping malls

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By Helen Reid

LONDON (Reuters) -The owner of Westfield malls is looking to cash in on shopper traffic by charging brands to be featured on screens and in pop-up spaces, a business it aims to grow.

Using its physical space for advertising is one way Unibail-Rodamco-Westfield can get more revenues per square foot as it shrinks its portfolio, selling billions of euros worth of shopping centres in Europe and the United States.

URW, which runs 78 shopping centres in 12 countries, launched Westfield Rise — its in-house retail media agency for Europe — last year to bring its advertising offerings under one banner.

Westfield Rise contributed 19.6 million euros in net margin for the group over the first half of this year, up 14% compared to the first half of 2022, URW said on Thursday.

The media agency unit aims to make 75 million euros in net margin by the end of 2024 and 200 million euros of net margin by 2030, targets URW Chairman Jean-Marie Tritant said it was on track to meet.

Citi analysts expect the global retail media market to be worth $110 billion by 2027, from an estimated $65 billion today, excluding China.

URW has 1,700 digital billboards in its shopping centres across Europe, and 170 dedicated spaces which it markets as offering brands “physical” contact with consumers.

While online advertising has been dominant, tighter controls on cookies – tracking codes that advertisers use to collect information about consumers’ online browsing and behaviour – could change this, Tritant told Reuters in an interview.

“In a context where brands and advertisers have been using a lot of social networks previously, … now that you have less cookies and this is somehow tougher, you see brands and advertisers trying to get to reach the consumer where they are,” Tritant said.

In the United States, URW has been disposing of shopping centres, including in downtown San Francisco where it expects a foreclosure of its Westfield mall near the troubled Tenderloin district.

Overall, URW has made 4.7 billion euros from real estate sales since 2021, with 3.3 billion euros out of Europe and 1.4 billion from the U.S., where it is cutting its footprint.

“The idea is really to reduce our exposure to the U.S., and to be a pan-European pure play,” Tritant said.

(Reporting by Helen Reid; Editing by Alison Williams and Susan Heavey)

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