Media Forum: Is it time for outdoor reforms?

Should the way outdoor media is bought and sold be changed, Alasdair Reid asks.

"We believe that the (outdoor) market is ready for a change. We recognise that the existing specialist model has become stagnant and predictable and fails clients looking for an advantage."

Controversial stuff. And even more incendiary for the fact that the speaker is Michael Higgins, the former sales boss of both More Group and Mills & Allen - a man who has been round the outdoor media block a couple of times.

His critics may argue that he is betraying his own community; but it isn't exactly easy to dismiss him as some sort of crank.

Gen Outdoor was set up in 2003 by Higgins and three former directors (Steve Wilson, Malcolm Thomas and Nick Maddison) of the Alban-owned outdoor buying unit, Blade. For the past couple of years, it has been acting as a small-scale outdoor specialist.

Following a strategic review, it has decide to break ranks and work for clients on a fee basis - the first time anyone has attempted to do this. As a mere idea this would be bad enough for some in the industry, but last week the cat landed squarely in the middle of the outdoor pigeons when Gen won the £4 million 20th Century Fox poster account - business that was previously held by Kinetic.

Currently, the outdoor market is the only media sector with dedicated specialist buying operations - and they are given an extra 5 per cent commission (on top of the conventional 15 per cent) by media owners.

Historically, the outdoor specialists have argued that the medium needs this extra slice of commission to pay for field teams to ensure that campaigns are properly posted as agreed with the contractors. Right inventory in the right place and all pasted up tidily. No ugly graffiti.

No other medium needs this extra layer of scrutiny. No other medium is as complex to plan, they add. The counter-argument is that this lack of transparency hides all sorts of volume deals that don't always find their way back to advertisers.

This is exactly the line that Higgins has been pursuing in recent correspondence with advertisers. He has been trying to convince them that the current trading system is perhaps not constructed with the best interests of clients in mind.

Is he right? Steve Bond, the managing director of Posterscope, says that with digital technologies impacting in all sorts of ways, the media landscape is evolving rapidly, and managing outdoor's role in this new, complex world requires more investment than ever before. He adds: "One or two of Gen's directors have been out of the mainstream out-of-home market for the past four or five years, so they can be excused for not realising that the market has already changed beyond all recognition during that period."

Paul Shearing, the UK managing director of Kinetic, adds: "The growth of outdoor specialists has assisted the growth of the medium as a whole. The commission system is open - everyone is aware how it works and understands the contributions that properly resourced specialists can make. The vast majority of advertisers recognise that."

Many media owners are happy with the current system too. Spencer Berwin, the managing director, sales, at JCDecaux, comments: "Outdoor is now regularly chosen by 99 per cent of advertisers for its innovation, sophistication, simplicity and accountability - and, therefore, its ability to deliver outstanding results."

However, Bob Wootton, the director of media and advertising affairs at ISBA, doesn't entirely see it that way. He thinks this issue may be worth looking at. He says: "Whatever the outdoor specialists say, the market they operate in is a bit closed to outsiders and many advertisers still regard it as a bit murky. So transparency is still an issue.

"I know some people will be upset about the coverage that Gen Outdoor has generated but my view is that there is no reason, in principle, why someone should not come along and ask a few difficult questions."

But one advertiser disagrees. Danni Murray, the UK media controller of Warner Brothers Entertainment, argues that the recent success of outdoor has nothing to do with commissions. And he's less than impressed with Gen's approach. He concludes: "Careless comments (such as Gen's) can create problems for a medium that has changed significantly in the past few years to embrace transparency."

NO - Steve Bond, managing director, Posterscope

"Advertisers and agencies now get more than they ever have before from the out-of-home medium, and more than they ever have before from out-of-home specialists. We reckon that we're offering them greater value for money - greater return on their media investment - than ever before."

NO - Paul Shearing, UK managing director, Kinetic

"When we go into pitches the procurement people are there and they have auditors vetting this too. It is just not credible to suggest that there are hidden aspects to the way their money is spent. To my mind all of this is just a distraction from the real business."

NO - Spencer Berwin, managing director, sales, JCDecaux

"The (current system) is far from stagnant and predictable. It's helping to drive the fastest growing medium - and has been for many years. The reason for this is that as an industry we continually strive to improve the product offering, the planning process and the channels of communication open to brands and advertisers."

MAYBE - Bob Wootton, director of media and advertising affairs, ISBA

"Everyone knows that there is an extra layer of commission in outdoor. I think everyone admits that there are also volume deals and over-riders - it's just that many advertisers are not entirely sure about the details of those arrangements. Why shouldn't someone come along and ask a few difficult questions?"

- Got a view? E-mail us at campaign@haynet.com.