OFT to review £800m outdoor ad industry
The Office of Fair Trading has announced plans to review the £800 million UK outdoor advertising industry.
The OFT expects to complete its review, which will aim to look at the high concentration of specialists buyers, outdoor media owners and the role played by commissions, by the end of the year.
The regulator also plans to look at the agreements between outdoor media companies and local authorities to see whether there are clauses to stop deals with rivals, or advertisers, which may be detrimental to taxpayers.
In a statement, the OFT said: “This study will consider whether there are any distortions of competition or barriers to entry at different levels within the sector.”
The OFT is concerned that the UK out-of-home market, which is estimated to be worth around £833 million this year, is being dominated by a small number of companies, including Clear Channel, JCDecaux, Primesight and CBS Outdoor.
In terms of specialist buyers, who buy the advertising campaigns, the market is led by just two companies – Posterscope, which controls almost 60% of the market, and WPP’s Kinetic, which controls the other 40%.
For every ad campaign, around 15% commission goes back to media agencies, while 5% goes to specialist buyers.
“This market study into outdoor advertising will take a look at whether the market works well in terms of offering firms and local authorities deals that are fair, competitive and transparent,” Heather Clayton, senior director of infrastructure at the OFT, said.