Why consolidation in OOH is inevitable

Although the industry welcomes consolidation in Out-of-Home market, comments posted on the article on this site by persons unknown once again raise issues about relationships between large buyers and sellers of the media.

I am not a self-appointed “guardian angel” for OOH, more an interested observer, and although my sentence construction leaves something to desired, I have some thoughts.

I am in no way condoning the current (and legal) business practice of pre-pack administration; taking a company into administration, ditching whatever debt is possible and re-emerging as a new outfit or selling the “best” bits to another company. It is nearly always smaller suppliers and creditors who lose out and this is obviously wrong. The fact that JCDecaux now own Titan’s UK assets is just one example of this procedure; however, to put this in perspective it is not confined to the Outdoor industry.

The factors driving consolidation in OOH indicate a further contraction is not only inevitable but is vital if OOH as a medium is to prosper.

Media buying has long been heading towards the kind of commodity trading that most large advertisers, the bread and butter of all major media owners, have demanded. They generally want to reach the largest audiences possible at the lowest possible cost, whilst paying their media agencies the smallest fees.

TV has been through this with consolidation of the ITV network from some years back and the recent merging of VBS’s sales into Sky Media. I don’t think online display advertising would be on as many advertisers’ plans if it wasn’t for aggregators in the sector. When I first bought media, radio was incredibly time-consuming to implement nationally, now large networks dominate.

Any medium not able to offer the utmost efficiency in the process of planning and buying the majority of their time and space will lose out.

This does not mean there is not a place for smaller media owners; traditionally innovation has been driven by entrepreneurs. Media targeting hard to reach audiences carries a premium, new concepts often excite creatives looking for media “firsts”.

I am also told many individuals developed OOH media products and networks prior to selling out to large media companies, making considerable fortunes in the process.

If the OOH industry wants to eat itself, I suppose it will. I fail to see who benefits if this undermines the power of the medium and drives advertiser’s budgets to other more efficient channels.

  • http://

    Interesting Blog Mr Clark. There are ideas & innovations from smaller companies in ooH – sorry, outdoor – but will the big players let it flourish?

  • http://

    An interesting synopsis of current events BUT other media seem far more likely to eat themselves, to use your vernacular, than Outdoor does.

  • Chris Worsley

    What is this Downton Abbey?

  • Nicholas Hoadley

    The idents we wrong in both tone and message. Tone, because Sunday night is about brain morphine as we try to put off the working the week, and the story of Gary the dumb motorcyclist was morbid and failed to elicit sympathy. Content, because it wasnt at all clear what the product being promoted and what the consumer was meant to do about it. Give me more Paul Whitehouse any day.