Media Perspective: Could the OFT bring transparency to the outdoor industry?

Should the Office of Fair Trading investigate the outdoor advertising industry? That's the question more than one person asked me this week as we looked into the quite separate issue of management changes at Kinetic, the poster specialist part-owned by WPP (page 18).

The question is on the agenda because some in the ad business, albeit with vested interests, say that they believe that too much power resides within too few outdoor buying points. It's possible to argue the opposite, given some of the excellence and investment the major specialists claim to bring to the market, but there are strong views on the matter.

It remains to be seen what the competition authorities will make of such complaints partly because it's unclear what impact any situation in outdoor advertising could have on the consumer. For its part, the OFT won't comment on whether or not it has received complaints because it has not launched a formal investigation. Yet, elsewhere, the outdoor industry is again facing pot-ential criticisms, especially around the issue of "sur-commissions": extra commission payments made to the specialists by media owners on top of traditional commission.

Last year, ISBA opened talks with its members about introducing a "transparency framework" that would provide its members with a greater understanding of trading practices in outdoor. As David Ellison, the marketing services manager at ISBA, says: "Last year, ISBA believed that it could help in addressing anomalies in out-of-home media. Since then, ISBA has been engaging with a number of out-of-home contractors. It is hoped that these changes will mean that interested advertisers will be able to demand a clear line of sight of the hitherto opaque remuneration chain on their business in out-of-home media."

Progress on this will be discussed at an ISBA meeting in mid-March. For their part, outdoor specialists and contractors argue that outdoor remains excellent value for money and that tough negotiations with specialists inevitably favour the buyer.

That said, I think if I were an advertiser, I would wonder about the value of advice received from any specialist pocketing "sur-commissions", a practice that seems to me to be increasingly hard to justify as the billboard business becomes less complicated and fragmented.

And, with the outdoor industry gearing up for some potentially good times ahead with the 2012 Olympics around the corner, perhaps now is the time for change. In their talks with the likes of IBSA, outdoor contractors and specialists seem to be at least listening to the concerns of advertisers. In exchange, perhaps, advertisers should expect to pay a fair price for the expertise of their media agencies. Something that, far too often, has not been happening.

ian.darby@haymarket.com.

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