Outdoor: Clash of the Titans

With Maiden having been acquired by Apfelbaum's Titan and Clear Channel looking to put its management woes behind it, the outdoor players are returning to health, Alasdair Reid says.

One damned thing after another. Life, of late, has been full of distractions for the UK's biggest outdoor media owners. All except for JCDecaux, that is - it seems to have a peerless ability to steer clear of trouble and strife.

In fact, one outdoor media buyer (who wishes to remain anonymous, largely because he clearly watches too much Star Trek) recently likened JCDecaux to "the Romulans" - because both are "cunning, opportunistic, powerful, and you certainly know not to mess with them - but, ultimately, they are rather distanced from the general melee".

Only fellow Trekkies will be able to pass judgment on the appropriateness or otherwise of this analogy - but it certainly seems true that JCDecaux, under the watchful eye of its chief executive, UK and Northern Europe, Jeremy Male, has seemed the only relatively still point (its win of the £500 million BAA contract in May aside) in a rather disordered universe.

Critics of the outdoor medium would like it to rediscover its sense of stability sooner rather than later. It is, after all, supposed to be on the verge of a historical breakthrough. But, against a general background of controversy that centres on trading transparency (or the lack of it), levels of commission, incentive payments and rebates, two outdoor contractors in particular - Titan (formerly Maiden) and Clear Channel - have become downright accident prone.

Viacom Outdoor will feel aggrieved to be mentioned in the same breath as this pair - but it too has been distracted in recent months. All in a good cause, it would argue: and, indeed, it has a thoroughly positive excuse for taking its eye off the ball slightly in recent months. It has, after all, been pitching - led by its joint managing directors, Tim Bleakly and Andrew Oldham - for the biggest outdoor contract there has ever been - London Underground's business, worth a prospective £100 million a year, for ten years.

True, Viacom was head-to-head with none other than JCDecaux; but this arguably meant a lot more to Viacom than Decaux, which has a lot more irons in a lot more fires. For Viacom, the Underground contract is its raison d'etre, so you can understand why it put so much effort into the thing - producing, as it did during the final weeks of the pitch, a mammoth bid document stretching to three-quarters of a million words and covering 1,250 pages.

Now Viacom can face the future with optimism, with the added buzz that will come from upgrading the whole Tube network with whizzy new digital display technologies.

How Clear Channel and Titan would like to be able to say the same. Perhaps it is testament to their spirit that, in fact, they do. Many observers, not least those at outdoor buying agencies, remain to be convinced - the recent catalogue of calamities racked up by the UK's two most spectacularly accident-prone contractors cannot just be imagined away.

It is perhaps ironic, given the extent of Maiden's fall from grace, that Clear Channel (still the market leader: see box opposite) is the company that is perceived to have the biggest question-marks hanging over it.

At a simplistic level, that is testament to the charisma of Bill Apfelbaum, the man who rode to the rescue of Maiden back in March. And however unfair this may be, agencies tend to compare his arrival with that of Barry Sayer, who similarly rode to Clear Channel's rescue back in January.

It's not a comparison designed to be flattering to Sayer. Back in March, Apfelbaum's US company, Titan, announced that it had purchased the failed transport media and billboard company Maiden - taking the previously quoted operation private on a bid of 20 pence a share. An ignominious end to a once proud company but, in the circumstances, probably the best outcome imaginable at that stage.

Maiden was in debt, trading at a loss, had broken banking covenants and when it was originally put up for sale, attracted bids of around 5 pence per share from companies that, you had to suspect, were not entirely focused on maintaining it intact as an ongoing interest.

Sayer's rescue act was much more low key and, for most observers, tinged with far greater shadings of emotional ambiguity - because he arrived as a replacement for Clear Channel's long-term UK chief executive, Stevie Spring, who departed back in January following a series of disagreements with the company's US management.

The Texas-based outfit has been in something of a transition phase. Previously a company embracing both radio and outdoor under the one umbrella, in April 2005 it undertook an amoeba-like process of binary fission, emerging as two separate listed companies, Clear Channel Entertainment housing the radio assets and Clear Channel Outdoor the posters.

At the same time, Clear Channel Outdoor elevated Paul Meyer to the position of global president and chief operating officer, worldwide. Anxious to make sure Clear Channel Outdoor outperformed Clear Channel Entertainment, Meyer entered into his new role with great zeal and it is believed that single-country chief executives such as Spring soon discovered they had been given a lot less room in which to manoeuvre.

Spring had one or two detractors, but was almost universally recognised as one of the outdoor medium's most glamorous and effective assets. Many saw Clear Channel losing her in this fashion as more than careless.

So the applause that greeted Sayer's arrival was muted and, in some cases, ironic. In any case, this was not to be a permanent appointment. While acting as the interim UK chief executive, he retained his main day job as the Clear Channel South Africa chief executive, shuttling back and forth between the continents as demanded and living out of a suitcase at a London hotel while in the UK.

Many believe he accepted the UK role merely to oversee a brief transition period in which the top job would eventually be given to Julie France, formerly Spring's managing director and second in command. Famously, it was not to be.

In an episode that aspired to low comedy, France was forced to depart following a bad day at the office, during which she e-mailed sensitive information to the wrong addresses. Some outdoor buyers and their clients got to find out what their rivals had been paying.

Sayer, it seemed, was destined to be the interim chief executive for just a little longer. Back in April, as France cleared her desk, he did not exactly seem overjoyed at the prospect - and he has subsequently made it clear that he will never move here permanently. His family is settled in South Africa.

So the contrast between Sayer's woes and the hullabaloo of Apfelbaum's arrival, just a couple of weeks previously, was stark.

Apfelbaum is from the Mr Motivator school of business management and although he is now in his late fifties, he remains an enthusiastic, energetic and charismatic breath of fresh air. He's also the ultimate safe pair of hands - and though, like Sayer, he's not planning on spending much time in Britain, he has a back story in the UK outdoor business that has, over the years, acquired an almost legendary status.

In the late 80s, Apfelbaum turned TDI (the progenitor of Viacom Outdoor, which, then as now, operated the London Underground franchise) from a basket-case operation into a world-class media company. He has a "back to basics" approach that is so effective you have to wonder why no-one else tries it.

His sales teams have neat haircuts, wear clean shirts and smart ties and stay sober. They make lots of calls and are punctiliously cheerful and polite. They write thank-you notes when you have taken them to lunch. And, most importantly (lunch notwithstanding), they are hungry. They want your money. Now.

Apfelbaum's impact has been almost instantaneous, outdoor buyers say. It has, they add, been astonishing to watch. As Roy Jeans, the chief executive of Magna Outdoor, puts it: "There have already been huge changes there - in terms of personnel and in the way that its inventory is presented to the industry. The phones are now answered immediately. It may seem like a small thing, but it isn't."

The senior line-up has been tweaked too. David Pugh, previously Maiden's managing director, has been promoted to chief executive; and Apfelbaum has also brought in two former TDI staffers, Alison Reay and Andy Moug, as the joint managing directors. All of which may be distracting some commentators from the fact that Apfelbaum's focus is unashamedly on revenue, not investment.

He has promised that the company will break even in 2006 and make money in 2007. No mean feat, if it can be pulled off - and Paul Shearing, the UK managing director of the poster specialist Kinetic, argues that in making the most of the inventory it has, Titan will be doing a service to the medium as a whole. "The whole billboard sector as a format is undersold and under-utilised. The value is there for advertisers and Titan's arrival will assist the promotion of value," he says.

The irony, given all the praise being heaped on Apfelbaum, is that it is Sayer who is presiding over a programme of accelerating investment. For a start, Clear Channel has recently acquired Van Wagner's UK assets - 70 high-quality, super-sized panels spread across 43 premium locations in London.

On top of this, it has launched the UK's first network of digital billboards and has just introduced "Building Blocks" - a new way of selling its panels, packaged up to target specific audience demographics in specific environments.

Clear Channel's sales teams, led by the UK group sales director, Rob Atkinson, are universally acknowledged to be doing a good job despite the partial management vacuum above them. And they are playing from a position of strength because, despite all the controversy surrounding whether outdoor's arcane system of buying and selling (all those extra layers of incentivisation) is transparent enough, and despite moments of potentially confidence-damaging ineptitude on the media owner side, the market in general is looking good.

Trading in the second quarter has been difficult because, these days, all UK advertisers seem to stop advertising during a Fifa World Cup. However, the second half of the year looks promising. The year as a whole could be up by more than 5 per cent year on year. Outdoor is the fastest-growing medium outside the internet and it is on the verge of achieving its long-term historical target - taking 10 per cent of UK advertising spend.

And yet, the natives - at least, those on the media buying side of the fence - remain restless, especially at the way the "interim" chief executive situation at Clear Channel seems to be dragging on indefinitely.

Is Sayer the outdoor medium's version of Tony Blair? Going, going, but not quite gone. Sayer, if not exactly oblivious to the increasing sense of disquiet, seems to feel that it is being overplayed. He is absolutely adamant that there's no need to panic.

He concludes: "We are always in the market for good people but we are not (currently) charging about looking for them. We are fine-tuning internally, working really carefully on our business and currently the existing teams are handling it appropriately. I certainly do not want any extra layers between me and the divisional directors. It is an opportunity to get my hands dirty. That day-to-day involvement is very helpful to me."

OWNER Revenue share
2006 (%)
Clear Channel* 29
Viacom Outdoor 24
JCDecaux 18
Titan** 15
Others 14
Source: Campaign estimates
*Includes Van Wagner
**Includes Maiden


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