Media Forum: Is outdoor a closed shop?

Are there too few buying points in out-of-home, Alasdair Reid asks.

The demise of Gen Outdoor Media Intelligence is hardly a surprise - there's been speculation for many months that it has been struggling, having lost its grip on important clients such as Twentieth Century Fox and Volkswagen. At a more philosophical level, its failure was perhaps predictable too, given the almost Herculean task it had set itself - to prise apart the established closed-shop structure of the outdoor buying business.

This is a sector dominated by the Aegis-owned Posterscope and the WPP-owned Kinetic, which between them control more than 80 per cent of UK out-of-home media spend. The only other significant player, taking around 10 per cent, is Interpublic's IPM.

For historical reasons, outdoor is treated as a separate part of the media marketplace, with unique levels of commission and systems of remuneration - and these unique factors have not always been transparently clear to the uninitiated.

This lack of transparency formed the basis of Gen's sales pitch when it launched in 2003. In what was essentially a play for the moral high ground, it promised to show its clients every detail of every transaction - and painted itself whiter than white when it offered to work on a fee rather than a commission (and other incentives) basis.

However, its sales pitch was too negative for many - it concentrated on the claimed deficiencies of its competitors rather than selling the worth of its own offering. On the other hand, there are those who maintain that the manner of its final collapse (notably its inability, towards the end, to strike competitive deals with media owners) tends to confirm that the market's leading players are no angels.

The worrying fact, surely, is that the unassailable power of the Posterscope-Kinetic duopoly is utterly, irrefutably confirmed. And that can't be healthy, can it?

That is not the way Annie Rickard, the chief executive of Posterscope, sees things. Consolidation, she argues, brings with it companies of real leadership and vision.

She adds: "Posterscope has grown from zero to its current size by winning business. Only 20 per cent of our total comes from our shareholders. Those who work with us benefit from consistently high levels of investment in our people, in consumer insight, in advanced planning and buying tools and digital leadership."

That's also pretty much the viewpoint of Jeremy Male, JCDecaux's chief executive, UK and Northern Europe. He says that the downturn has hastened the consolidation processes across the buying and selling sides of all media sectors.

He adds: "Concentration in outdoor buying provides the professionalism and planning expertise in a rapidly changing out-of-home environment - think digital sites, XTP, mobile telephony, interactive screens and the launch of new Postar research underpinned by GPS tracking technology. The breadth of the offering requires well-resourced companies and, as a media owner, this excellence in outdoor allows us to compete more effectively in the multimedia world with Google, Facebook, ITV and Sky."

That level of enthusiasm is not entirely shared by Bob Wootton, the director of media and advertising at ISBA. In fact, he argues that outdoor's levels of concentration would be a concern if they existed in other sectors, such as TV. But he also calls for a sense of perspective.

He explains: "The market is as concentrated as you'd want it to be. Advertisers have had some concerns in the past but we've been working towards greater transparency and accountability. In the past, it wasn't always possible for those who had a right to ask questions to get answers. But we've done the knitting, now let's wear the jumper for a while and see if it fits."

Many on the agency side would echo that. Phil Georgiadis, the chief executive of Walker Media, argues that "the outdoor medium is well served by a small number of extremely professional specialist companies".

But others take a more critical line. Simon Mathews, a partner at Polestar Communications, would agree that this has to be seen within a wider perspective - but it's not exactly a pleasing one. He concludes: "It's part and parcel of everything that's going on in the media world currently. It's being driven by a review process, motivated by the desire of clients, as they see it, to improve their terms of business. But what clients are actually getting is more average-ness. They've been getting less innovation, experimentation and choice. What's happening in outdoor is an exaggerated version of the general trend in the media industry."

NO - Annie Rickard, chief executive, Posterscope

"Anyone who's been around as long as I have will know how much out-of-home has changed. The challenge is to build understanding of its role in the economy. This needs investment, leadership and vision."

NO - Jeremy Male, chief executive, UK and Northern Europe, JCDecaux

"Buyer concentration provides the professionalism and planning expertise in a rapidly changing out-of-home environment. Scale provides the resource base to deliver the level of service necessary."

NO - Bob Wootton, director of media and advertising, ISBA

"Outdoor is a village. Nobody seems to have a problem with that - but it's as cosy a world as anyone should be comfortable with. And it's true that there's still more than one player on the buying side."

YES - Simon Mathews, partner, Polestar Communications

"The recent review frenzy was motivated by a desire to improve terms. But what clients have ensured is a decline in experimentation and choice. We've been seeing another stage in the commoditisation of media."

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