MEDIA ANALYSIS FORUM: Who’s to blame for leaving Maiden in distress? Alasdair Reid asks if Maiden’s claim that the outdoor market is in decline is realistic

Not for the first time in recent months there is a suspicion that the Maiden Group has been consulting its edition of the Bumper Book of British Excuses. This substantial volume is popular with great sporting and industrial institutions, particularly in the field of transport - leaves on the line, the wrong sort of snow, etc - but there’s surely a well-thumbed copy on all the desks that matter at Maiden.

Not for the first time in recent months there is a suspicion that

the Maiden Group has been consulting its edition of the Bumper Book of

British Excuses. This substantial volume is popular with great sporting

and industrial institutions, particularly in the field of transport -

leaves on the line, the wrong sort of snow, etc - but there’s surely a

well-thumbed copy on all the desks that matter at Maiden.



That at least was the view from some quarters of the industry last week

when they read Maiden’s interim results for the six months to 30

June.



The period had, according to a company statement, provided a ’difficult

trading environment’ resulting in an 8 per cent year-on-year decrease in

turnover - and although it still managed to scrape a slim operating

profit, the damage manifested itself in an overall pre-tax loss of

almost pounds 1 million when other balance sheet factors were taken into

account. But, and here’s big excuse number one, there was nothing it

could do about it because the whole outdoor advertising sector had been

depressed.



How so? The outdoor industry likes to think of itself as relatively

recession proof - along with all media sectors it does well in periods

of growth, but when times are tough, outdoor is often the last budget to

get cut because the medium is regarded as being good value as a last

line of defence. And, of course, we haven’t exactly had a recession.

Maiden’s line was that the industry at large had been hit by a far more

subtle phenomenon - indecision.



Advertisers couldn’t make their minds up as to whether we were heading

for boom or bust, so they cut their outdoor budgets.



But no other medium has suffered noticeably, and figures from the

Outdoor Advertising Association indicate that revenue for the first six

months was more or less flat year on year. The obvious conclusion is

that the 48-sheet sector - Maiden’s core market - faced a particularly

difficult time.



Perhaps, but even Ron Zeghibe, chief executive of the Maiden Group, is

ambiguous on this point, preferring to focus attention on price-per-

panel figures. He states: ’If you look at all the publicly available

figures from independent sources, the price per panel in 48-sheets

decreased by exactly the same amount in six-sheets - 15 per cent. That

would point to a broad-based drop in demand across the medium. There has

been a whole lot of uncertainty out there which has led to advertisers

holding on to discretionary budgets. The good news though is that the

second half looks a lot better.’



The City appeared to find Zeghibe’s statement eminently plausible and

took a somewhat lenient view of Maiden’s performance, knocking only 4

per cent off the share price when the results were released last

Thursday.



But some in the industry are irritated that Maiden appears to be

shifting some of the blame for a poor set of figures. Roger Parry, chief

executive of Clear Channel International, which operates in 26

countries, says that the UK was one of the network’s better-performing

markets. He asserts: ’Our UK business for the first six months of this

year was up 11 per cent and we remained very profitable. Admittedly,

growth rates were slightly lower than they have been, but the plain fact

of the matter is that Maiden lost share. What I think we are seeing is a

movement of money from 48-sheets to six- and 96-sheets, from non-

illuminated formats to illuminated, from poor quality to greater

quality.’



He adds: ’There are some of us in the industry who are a little fed up

with the fact that when Maiden has a poor performance it blames the

market as a whole.’



Maiden sources counter some of Parry’s assertions by pointing out that

Clear Channel’s UK operation doesn’t file public accounts any more. The

implication is that Clear Channel (and other contractors in the 6-sheet

market, for that matter) is being disingenuous. But buyers say that

Parry’s figures bear out their experience of the market - which also

indicate that the transport advertising company, TDI, had a superb first

quarter, up by more than 15 per cent.



So what’s going on? Does the 48-sheet market in general, and Maiden in

particular, face a long-term decline in share? And should we give any

credence whatsoever to Zeghibe’s ’uncertainty’ factor? Steve Wilson,

managing director of Blade, says he has some sympathy with the Maiden

point of view. He comments: ’Maiden did very well in the times of plenty

so it is coming from a high base of profitability and outdoor has been

struggling to grow revenue when other media haven’t. One of the theories

is that advertisers are taking money from the outdoor budget to

experiment on the internet. All the same, I don’t think there’s any

doubt there has been a continuing shift in market share towards six-

sheets.’



Wilson, in common with other observers, points out that rates may well

have been as soft in the six-sheet market as they’ve been in 48s but

that’s largely due to the fact that, because of new-build programmes by

Clear Channel and JCDecaux, there has been a huge increase in

supply.



Some analysts believe that Maiden’s 48-sheet rival, Mills & Allen, came

within a whisker of outperforming Maiden in 48-sheets over the first

half - which, if true, could be astounding given that M&A was a company

adrift for two years until JCDecaux bought it earlier this year.



Annie Rickard, chief executive of Posterscope, agrees there’s little

doubt that some sectors of the outdoor market are performing a lot

better than others. She states: ’You could argue that uncertainty over

the future of M&A adversely affected the whole 48-sheet market. But if

you look at the consistently strong performers like TDI, you have to say

that its performance is down to sales and marketing. The 48-sheet sector

is still a big chunk of the market, but they are not selling as well as

they could be. If Maiden had performed better in that area I suspect it

would have led to a better result.’



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