Media: All about ... Outdoor specialists

There are signs that the outdoor system is progressing.

So, farewell then, Concord. No, not the airframes of British Airways' former supersonic fleet, pictured in the papers last week mouldering away in a hangar out at Heathrow.

Sad, but not half as drastic as the fate befalling another Concord of the 70s, the slightly less than supersonic media specialist. Though pre-eminent in its day, this outmoded model, acquired in 2005 by Aegis (owner of the sector's new market leader, Posterscope), was scrapped last week.

Or perhaps "rebranded" would be closer to the mark. Aegis is launching a new operation called Source in Concord's place. Headed by the managing director, Nicole Guerretta, Source will be complementary to Posterscope, able to house the accounts of conflicted clients; but it will also aim to be more fleet-of-foot than established specialists, working directly to individual clients, creative agencies and digital consultancies on a project-management basis.

It will also, interestingly, be prepared to work on a fee basis, and, as such, this could be interpreted as the first acknowledgement by one of the market's major players of an irritating (for them) issue that just refuses to go away.

1. The outdoor medium evolved its own unique trading system largely because during the 80s and 90s it was too complicated and too fragmented for the media departments of full-service advertising agencies to handle on their own - so they have always relied on the extra expertise supplied by outdoor specialist agencies. This historical anomaly has survived consolidation on both sides of the industry. These days, there are only three main buyers - Kinetic, Posterscope and Magna - and four big multinational media owners - Titan, Clear Channel, CBS Outdoor and JCDecaux. Ever-improving, site-specific audience research data, plugged into easy-to-use planning software enables any moderately resourced media agency group to take control of this themselves. They fear the risks involved, however - initially, they could never hope to emulate the performance of the established specialists.

2. The poster specialist Harrison Salinson rebranded as Posterscope in 1995. Since then, the operation has grown faster than its rivals through successive waves of sector consolidation. It was also the first to build a coherent and consistently resourced international network. The endgame in the consolidation process effectively began in July 2004 when Posterscope's biggest rivals, Portland and Poster Publicity, announced their merger, creating Kinetic. In August 2005, Posterscope acquired Alban Communications, Concord's holding company.

3. Kinetic, which is 50 per cent owned by WPP, almost drew level with Posterscope last week, when, in a predictable move, the last WPP agency not aligned on a group basis, MediaCom, shifted its £80 million billings out of Posterscope and into Kinetic. However, some observers say Kinetic still has a way to go before it can equal Posterscope in operational terms.

4. The Interpublic-owned Magna Outdoor (formerly IPM) mainly buys for the group media agencies, Initiative and Universal McCann. Posterscope now represents Carat, Vizeum, OMD and ZenithOptimedia. Kinetic represents MindShare, Mediaedge:cia and MediaCom.

5. Aegis (Posterscope plus Source) now has estimated UK outdoor billings of £390 million - a 44 per cent market share; Kinetic has £370 million (42 per cent); Magna £100 million (11 per cent). Direct purchasers and smaller agencies make up the rest.

6. Some observers believe that recent demands for increased transparency in the wake of US accounting scandals will force the outdoor market to abandon its unique remuneration system, with its reliance on agency discounts and volume incentives. This in turn will threaten the future of the specialists themselves. One new entrant to the market, Gen, has been causing controversy by offering to work directly for clients on a fee basis.

7. The cause of transparency in the outdoor medium may further be advanced if a company launched earlier this year by Alistair Lines, a former boss of IPM, succeeds in establishing a significant pool of data on which to begin accurate auditing of the medium.



- Source will pitch itself as offering not just choice and flexibility but also the reassurance of big-buyer backing in the form of Aegis in general and Posterscope in particular.

- Advertisers always welcome choice but the danger (from the viewpoint of the likes of WPP and Aegis) is that this sort of initiative will keep the broader issue of remuneration bubbling under.

- Outdoor's status as a special case (in remuneration terms) is enshrined in ISBA's best practice guidelines, but media agencies report growing numbers of client procurement people asking them to assess whether they are getting best value from this sector. To date, by and large, they seem satisfied with the answers they've been given.


- Kinetic will undoubtedly launch a consulting division similar to Source. But it is unlikely that the bulk of the outdoor media business, processed as it is through Kinetic, Posterscope and Magna Global Outdoor, will be in any way affected. In the near future at any rate - and the outdoor specialists would like it to stay that way over the longer term. The holding companies also favour the status quo because they are rather partial to the huge margins derived from outdoor trading.

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