Even in Internet Age, Ads on Sides of Buildings Are Big Business

In Tel Aviv, advertisers are even willing to cover a building’s renovation costs so they can get the city’s most coveted facades

A big ad along the side of a building on Rothschild Boulevard in Tel Aviv.
Ofer Vaknin

From time to time an apartment building on the corner of Sderot Chen and Frishman Street in Tel Aviv will display a giant ad, eight meters wide and 10 meters high.

Even if the age of the internet, outdoor advertising remains an attractive way to reach consumers. Tel Aviv is the epicenter of outdoor advertising in Israel and in Tel Aviv the corner of Rabin Square is a star: Tens of thousands of people pass through the area every day and, if there’s a major event in Rabin Square, the lucky advertiser could get some free air time as well.

The homeowners benefit as well and so does the city, which collects a fee for outdoor advertising. Even though Mayor Ron Huldai often expresses concerns about the city “turning into a giant billboard,” regulations are weak and advertising agencies find ways to work around them.

Officially, Tel Aviv only allows residential and office buildings to put advertising on their facades when they are under construction or undergoing renovations. Yet in spite of that rule, one building on the corner of Gordon and Hayarkon streets has displayed ads on its façade for years, changing them every few weeks.

Industry sources estimate that advertisers pay between 10,000 and 20,000 shekels ($2,800-$5,600) for the spot.

In another case, an office building on Yigal Allon Street. With its east facade facing the Ayalon Highway and its tens of thousands of commuters daily, the location is an outdoor advertiser’s dream. The building’s owner received permission to put up an ad last July because it was about to undergo renovations, but eight months later the ads are there but no renovations have begin and tenants’ windows have been blocked.

The municipality says that there are few cases of building owners taking advantage of the rules. Last year, Tel Aviv issued 2,500 special permits for outdoor advertising, 80% for buildings undergoing renovations or for new construction. It says that on average it uncovers fewer than 10 cases a year of violations.

“If it becomes clear that a billboard was erected but renovations haven’t gotten underway, we have the authority to enforce the rules. In any case, the city is under no obligation to extend a permit past its first year,” a spokesman said.

Outdoor advertising involves a lot of money. Ads can cost anywhere between a few thousand shekels a month up to 120,000 shekels depending on the location, the size of the ad and the time of the year. That top rate is for a building on the Ayalon Highway’s Halacha exit.

An apartment building on the upscale Rothschild Boulevard can expect to get 12,000 shekels a month. On a more commercial street like Shenkin an apartment building can get 7,000 a month or more while undergoing renovations. At the Elephant Junction near Neot Afeka buildings get from ad agencies between 10,000 and 12,000 a month.

For instance, the Beit Kalka office building on Begin Boulevard the rate for a 120-square-meter ad runs at 15,000 shekels a week, or about 45,000 a month. That works out to about 200 shekels a square meter a month for the building’s owner

It’s no wonder that advertisers have creative ways to get around the rule. In 2005, Baram Advertising came up with the idea of helping finance upgrading the facades of buildings in exchange for advertising rights .

In the next 12 years, Baram made deals with 25 buildings in Tel Aviv for a combined 20 million shekels. It did another 20 in nearby Ramat Gan and Ramat Hasharon for additional millions more.

The Tel Aviv municipality does well from the business, too. It collects monthly fees of 82 shekels per square meter on outdoor advertising.

At Beit Kalka, the city collects 10,000 shekels in fees a month, or about 1,000 shekels per square meter annually. By comparison, the average the municipal tax (arnona) the city collects on commercial property is just 30 shekels per square meter and on residential properties in the range of 35 to 120 shekels.

Gabi Lavie, who has been in the outdoor-advertising business for more than a decade, said Tel Aviv’s policies aren’t weaker than in other Israeli cities, but Tel Aviv is one of the few places where there is enough traffic to make it pay.

His firm has expanded from Israel into Italy where it manages outdoor advertising in Rome, Milan and Naples. Italy has very stringent rules on outdoor ads being erected on buildings only when they are undergoing renovation and then covering only a portion of the facade. But because buildings are typically very old, facades undergo restoration work every 10-15 years so the supply of locations is big, said Lavie.

Tali Hatuka, a lecturer and head of the Laboratory for Contemporary Urban Design at Tel Aviv University, isn’t happy with the spread of outdoor advertising.

“Advertising is aggressive and ubiquitous, continuously penetrating urban space like brainwashing – without anyone’s consent and no escape route,” she said. “After all, I can’t give up driving on the Ayalon or walking through the city. ... It’s an attack of visual noise with no escape from products and celebrities.”

She said Tel Aviv should follow the example of Brazil’s Sao Paulo and ban nearly all outdoor ads. “You can see the skyline and enjoy the landscape,” Hutuka said. “And, no less important, the problem of maintenance and neglect of buildings isn’t covered up.”