Media Perspective: Is high commission really what's behind the rise of outdoor?

My TV has been replaced after last week's blow-up but its absence provided some valuable learnings. Not least that, as opposed to 'fighting' lager, you can drink a phenomenal amount of Young's 'ordinary' bitter before collapsing.

While putting this learning to the test one night last week, I happened to be in the company of a TV sales chief and an agency director. In a moment of almost heart-rending poignancy, the two indulged in a show of unity ahead of the bitterly fought TV deal season. Clients were buggers for taking most of an agency's 15 per cent media-owner commission on TV deals. Agencies, with media owners, should work harder to counteract this.

That was my recollection of the conversation, albeit filtered through a gauze of malt, hops and yeast.

More soberly, I noted some more good PR for the outdoor industry in last Monday's Guardian media section. The article analysed outdoor's impressive second-quarter performance (revenues up from £184 million in the second quarter of 2003 to £210 million in the same period of this year) and credited the rise to an increase in the "quality of locations, new products and attracting new advertisers".

The Outdoor Advertising Association is predicting overall growth of 7 per cent this year and this is all very laudable. But is this success really all down to the benefits of consolidation (the big four of JCDecaux, Maiden, Viacom and Clear Channel own the majority of sites and claim to be pumping money into innovative new formats) and all-conquering research (the industry unveiled its new, improved Postar system at its recent knees-up in Barcelona)?

Perhaps, but there may be another contributing factor. TV and press traditionally pay a 15 per cent commission to agencies (there was recently a massive outcry when the regional newspaper group Northcliffe Newspapers announced that it was slashing its rate to 10 per cent). As mentioned earlier, much of this is passed on to advertisers. In outdoor, commission rates are usually higher - anything up to 25 per cent - giving agencies and their outdoor specialists healthier commission on their deals.

What agency chief, hampered by years of dropping his or her pants to clients on new-business pitches, could resist the tangible commission benefits of diverting spend into outdoor? All that you have to do is back the outdoor companies' claims for greater effectiveness and pocket the profits.

This is all just a theory, of course; but varying levels of commission by media, combined with the nagging pressure on agencies' bottom lines, has to make outdoor look like a good bet at the moment.

So much for media neutrality and top-quality agency research then, but at least it will keep agencies in warm beer.

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