OUTDOOR/AMBIENT: THE EVOLVING MEDIA

Anna Griffiths talks to the outdoor experts and looks at those ambient companies destined for success, and those which fell victim to market forces.

Five years ago ambient media was a relatively new phenomenon, a form of advertising which materialised just about anywhere and everywhere.

Perpetuated by around 400 companies, it is unlike any other medium. While TV, radio, press and outdoor players have slimmed down in numbers through mergers and acquisitions, the number of ambient companies has continued to grow.

Is this merely the nature of the business, or will a process of natural selection and a trimmer company round-up occur as the market gradually matures?

With clients demanding more accountability many outdoor experts believe there's bound to be some sort of shakeout among the smaller players. Mike Segrue, the managing director of Poster Publicity, says: "They won't all survive because what they're often lacking is any measurement. You don't buy innovation for innovation's sake. You buy by quantifiable product."

Nigel Mansell, the managing director of the poster specialist Concord, adds: "There will still be companies that will do things such as stunts, fridge stickers and litter bins, but there will be this drift as accountability and better audience figures come through from the bigger players."

Ben Tolley, the vice-president of the media corporate finance house Long Acre, believes the key to survival for many ambient media companies is following through a great idea with some long-term contracts.

"The market will consolidate, but it won't necessarily happen through mergers and acquisitions. It will partially consolidate through shabbier operators failing to pick up contracts when they come up for renewal.

The ones who succeed will be the ones who focus on customer satisfaction, not just the clients they sell space to, but their underlying property clients whose space they sell on," he says.

In tight economic times, the funding of ventures has inevitably come under more critical scrutiny. A recent victim has been Forecourt TV, the petrol station media network set up in 1998 by the former BSkyB group sales and marketing director, Tony Vickers, and the former HTV sales and marketing director, Alan Bryson. It ceased trading in September. In July it was looking for a fourth round of refunding and one of the problems it cited was that it fell between the two stools of TV and outdoor, with buyers in neither medium understanding the innovation.

Segrue observes: "I think the demise of Forecourt TV is a pivotal event in the ambient sector. It seemed like a good product. But I suspect costs were very high and there was a creative issue in what could run on these screens which often didn't have sound. There was a lack of acceptance from creative agencies and it was operating in a pretty cluttered environment."

Other ambient companies which have bitten the dust, included Ad In The Hole, a golf-hole advertising company, XBO, which launched interactive kiosks at Heathrow, and Z Beermats. Tightened purse strings often mean that companies that have come up with new technologies destined to get the creative juices going fall at the first hurdle or are forced to limit their growth because of the outlay needed on capital costs.

The Swedish company DHJ worked with Viacom Outdoor on a technology which enabled moving images to be projected on to the walls of tube platforms.

Interest was high but technical problems forced the project to be abandoned.

But Tolley believes: "It's not the market to be launching new media products."

There are some ambient outfits that have been bought by big outdoor companies, but these can be counted on one hand. High-profile buys include Clear Channel's acquisition of Taxi Media, the company that sells advertising on the side of taxis, and its sizeable stake in the trolley advertising company the Media Vehicle.

A big outdoor player would not acquire a small specialist ambient company unless it recognised cost synergies and the benefit of adding to an existing sales package. It would be perfectly logical, for example, for the German company that owns Blow Up Media to get together with Megaprofile, which owns the scaffol-hang business. You would be able to go to one buying point to access a particular form of ambient media. Likewise, in the postcard advertising business, there are a number of players and so it would make sense in time for some of the larger players to acquire some of the smaller ones to build their networks.

Tolley believes that the more established players will consolidate, while the smaller quirky companies will continue to proliferate the business.

"It's not a big enough market to justify lots of people doing it. Without a middleman it's a bit of a faff to buy. But people do buy ambient for a bit of fizz, and then they go to the more traditional players for more accountable business," he says.

But those in the smaller companies disagree. Marco Pieters, the managing director of T4 Media, a company that sells advertising on ticket barriers, believes that the industry will always be dominated by a melting pot of small companies.

"Ninety per cent of the ambient business is very small and too much hassle for the bigger companies to manage. Those who have come up with the original idea often sell it. Maybe great ideas are not so scaleable because of their complexity."

With so many bit part players there is a danger that clients and agencies will be overwhelmed by the opportunities available to them. Some suggest that brokering on behalf of smaller players could become more prevalent and establish a more cohesive market. Poster specialists, such as Concord, already offer clients help in finding out-of-home solutions beyond the normal poster buying opportunities.

Mansell explains: "It's not a lucrative area for us to specialise in because its planning, compared to mainstream outdoor, is time-disproportionate.

For our advertisers the incremental impact, cover and frequency, and PR opportunities mean effective campaigns. So the time and effort invested is rewarded by clients who admire our planning solutions and are tremendously loyal."

However, there is scepticism about how much can be realistically achieved through brokering on behalf of ambient specialists. Philip Vecht, the joint chief executive of the washroom advertising specialist Ad Media, observes: "The best people to sell a medium are the people who do it themselves.

They can provide accountability and the ammunition that's needed to sell it on. If people are trying to cut corners and use a broker there's a danger that the broker has so many opportunities they've got to understand that the advertising message gets diluted and a campaign's direction gets fudged."

It would seem that, for the foreseeable future, ambient media is destined to be made up of an elaborate patchwork of companies. But it is likely that in time the layer of larger players, who can boast a strong network of sites and accountability, will become consumed by big outdoor companies keen to sharpen their skill-set.

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