Outdoor sector set for major shake-up

by Sarah Crawley-Boevey, Media Week 08-Jan-08, 11:55

LONDON – Outdoor experts believe that the long-predicted consolidation of the sector will occur in 2008, with many medium-sized companies disappearing and more agencies taking outdoor planning in-house.

A successful decade for outdoor advertising has seen the emergence of dozens of new companies, all of which are keen to get a share of the sector’s increasing spend.

However, in recent months, there has been a dramatic rise in firms outsourcing their sales to bigger companies, with bosses claiming they are unable to get in front of key advertisers due to agency deals that see entire campaigns put into larger rivals’ portfolios.

Richard Rowley, former head of Transvision at Titan and now head of media sales at ATM:ad, believes that businesses in the middle ground are the most vulnerable.

“The medium-sized contractors with traditional poster sites will either go to the wall or be bought out,” he said. “The bigger firms such as JCDecaux and Clear Channel can move in with massive deals and deliver more or less the whole solution.”

He also believes investment may become a major problem for some digital-led outdoor contractors.

Rowley said:“These companies have been around for four or five years and their product is looking a bit tired.”

“The hardware needs replacing and the question will be whether they made enough revenue to justify that investment.”

A senior executive at one outdoor media owner believes poster outdoor specialists Kinetic and Posterscope will soon begin to see their 80% share of the outdoor market diminish, as more agencies begin to handle outdoor planning activity.

He said: “The top 20 agencies are now very focused on outdoor and they need to be closer to it than they have been before.

“New technology and digital will drive the change in structure because agencies want to be close to it. They don’t want to lose out the way they did with online, and then spend three years trying to wrestle it back.”

Comments

adrian cotterill - 09/01/2008

Nice article and great to see Digital out of home getting some much needed exposure in Media Week. We picked up on your story and promoted it further on our industry analysis blog - see http://www.dailydooh.com/archives/780 I'm not sure why any (existing digital) Hardware will need replacing just yet but do agree that investment going fwd for the small to medium sized digital outdoor 'wannabees' may be an issue. The digital sector does however need someone to give the traditional folks a kick - though at the moment, JC Decauz with their airports (digitally) are doing great things, so too CBS OUtdoor with the underground and some other rail initiatives. Clear Channel too are investing heavily in digital roadside. 2008 will we believe be a good year for digital out of home - you can see our "Trends and Predictions for 2008" here - http://www.dailydooh.com/archives/746