Reading the sensational coverage given to agency commission levels
in outdoor, you would think this is the main issue in our successful and
However, this hype is deflecting attention from those things that really
matter to all our paymasters - the advertisers.
The message we are hearing from advertisers is that outdoor’s commission
structure was addressed fully three years ago.
There are plenty of other things they do take issue with and media
ownership plus media inflation is highest on their agenda.
It’s easy to see why, as the more laissez-faire regulatory stance taken
by the Office of Fair Trading towards outdoor has resulted in virtual
duopolies in each key format. Of 48-sheet sites, 64 per cent are owned
by Mills and Allen and Maiden - two contractors whose recent ’joint
marketing initiatives’ have revealed a level of co-operation that
aggravates advertisers’ unease about lack of media competition.
These two contractors, along with More O’Ferrall, control more than
two-thirds of 96-sheets. TDI now dominates the bus market and more than
80 per cent of six-sheets are controlled by the More Group (Adshel) and
J. C. Decaux. Duopolies cause advertiser frustration when inflexible,
package-based selling creates site duplication and forces up entry
Contractor mergers are motivated by an urge to increase sales and reduce
overheads. Advertisers accept this as long as they still get value for
money, but they object to rate inflation accelerating in the wake of
media owner consolidation.
Over the past three years, rates on 96-sheets have vaulted by almost 50
per cent; 48-sheets by just over 40 per cent, six-sheets by 28 per cent
and regional bus rates have nearly doubled. Maiden has just reported
pre-tax profits up 250 per cent to pounds 7.95 million.
Contractors have invested heavily to improve panel quality, but with
rate and revenue figures like these, advertisers dislike the prospect of
price hikes. If they vote with their feet we will be the losers.
Another issue high on advertisers’ list of concerns is audience
With Postar now one year old I hear many of them asking: ’What has it
ever done for us?’ Promises made at its launch, in good faith
admittedly, have not been fulfilled.
While there are good reasons for this, advertisers have not been kept
informed and ignorance for them is not bliss. Without a currency in the
outdoor market, advertisers cannot make value judgments which adds to
their frustation when confronted with increasing cost.
Another genuine issue causing client concern is campaign validation.
On top of their media spend advertisers are obliged to pay for
independent campaign verification that their ads are actually being
posted correctly up and down the country.
For many years contractors have been promising barcoding of sites but
advertisers have yet to see the benefit. Surely the onus is on the media
owner to provide the necessary reassurance to the advertiser?
Finally, tobacco advertisers have been threatened by a total ban under a
Labour government. Alcohol and confectionery may be the next in
Clients are looking for support here and are concerned that outdoor
media owners lack the will to lobby on their behalf.
Many advertisers feel outdoor contractors should act collectively to
clean up ’bad taste’ posters and avoid the threat of potentially
damaging statutory regulation. The call by the Advertising Standards
Authority for greater sensitivity to public opinion in the portrayal of
women will only heighten their expectations.
So clients feel that when contractors focus on commission they are
looking through the wrong end of the telescope.
Clients have the other end to their ’good eye’ and are rightly more
interested in the bigger picture.