Should the two new deals go through, the outdoor market would be 'ruled' by a new major duopoly of just two major competitors, followed by the likes of smaller OOH operators such as QMS.
Nothing is set in stone yet, as consumer watchdog the Australian Competitor and Consumer Commission (ACCC), has just revealed its investigation into each deal.
It is unclear at this point what the results will be. Last year the ACCC blocked a similar deal between APN and Ooh out of concerns for fair competition in the market.
To get a feel for what the industry made of the moves, AdNews approached key players in the market to gauge their thoughts on how these deals would impact the media landscape.
Competition and pricing
HM Communication Group founder and principal Virginia Hyland disagrees with the moves, telling AdNews, "there should be at least three major players in the outdoor environment."
She believes there should be more concern around the plays by JCDecaux and Ooh, as it could lead to a hike in costs for brands looking to advertising in the sector.
"The cost of advertising on outdoor in the digital era will increase if there is a lack of competition within the landscape," Hyland says.
"With the age of digitisation it means that outdoor businesses will charge advertisers a premium for day part and geographical targeted audiences."
As an example, Hyland says that instead of buying a static billboard for a month for $10,000 which appears 24 hours a day, the outdoor companies could see the opportunity to charge by daypart, day of week and geographically.
This would see a digital billboard costing an advertiser $5000 for owning a smaller daypart window – selling four advertisers across the day and equating to $20,000 in income, versus static billboards at $10,000 income for a month.
"As outdoor evolves into a digital offering this becomes a serious game changer to their offering. It means that outdoor companies can become one of the largest mass audience distributors of content as well as advertising," she says.
"With a complete digital transformation, I believe they will have the opportunity to grow to 30% of all media channels because marketers ultimately want to appeal to audiences on their path to purchase."
MD of Dentsu-owned OOH division, Posterscope, Bryan Magee and GroupM chief investment officer Nicola Lewis disagree, with both failing to see this as a logical decision.
Lewis says a move to push up prices simply due to a lack of competition wouldn't be a "smart move" for JCDecaux or Ooh.
"We as media agencies, regardless of mergers or acquisitions, are still measured and held accountable to fair and equitable costs, along with fair and equitable levels of value, and mergers and acquisitions do not change that," Lewis says.
Magee adds that it "wouldn't make sense" to charge clients more as the industry still needs to grow its share and can't afford to price itself out of value when compared to other channels.
"Even if it did go up, that's what clients pay us to protect anyway," he says.
Good or bad: industry impact
Magee views the move was "broadly positive" for the OOH industry.
He says for the moment the impact on agencies will be minimal, and it remains "business as usual", but long-term, serious thought has to be given to measurement and further industry issues.
"It’s bringing together four innovative OOH business with excellent assets and creating two competitive media owners that have scale and are pushing the OOH agenda," Magee says.
"Long-term, there are key industry issues such as digital measurement, automation and third party verification that need to be solved for clients, with less sell-side operators.
“Our hope this that this should be easier."
Lewis agrees and says that deals such as these prove a willingness to invest in diversification and data strategies.
She says this is nothing new for media agencies and should have little impact on how they continue to apply their buying and planning strategies.
"Buying strategies are continually evolving regardless of mergers or acquisitions, so at its core, no, it won't have an impact," Lewis says.
GroupM's Nicola Lewis
"OOH has set itself up as a progressive medium, and as such has a responsibility to deliver on that promise. Organisations that focus on data capabilities, creative innovation, targeting, accountability, and verification are always going to be held in good stead."
Magee says there could be more value in it for clients if it becomes a share conversation, arguing that strategy shouldn't change too much, as media agencies should be buying a combination of inventory regardless.
"The new entities might want to try and change the strategy now with more assets to sell but that’s for us to work through," he says.
“If approved, the market still has choice which is critical. City of Sydney tender is live and each of the four operators would have been bidding, it’ll be interesting to see how the tender is managed now."
The tender for the City if Sydney outdoor street furniture contract was opened for the first time in two decades, late last year.
Free public Wi-Fi and new bus shelters, kiosks and public toilets equipped with digital technology and more sustainable options are on the agenda.
The billion dollar question
As opinions surrounding the deals swirl, one talking point remains on the tips of everyone's tongues, "will this actually go through?"
Magee says it's a tough one to answer fairly but he doesn't see the same issues there were when APN pushed to buy Ooh.
"Total share of each new entity is considerably less than the APN and Ooh proposed merger plus share by formats will not change," he says.
"It’s not just the ACCC but also NZCC plus the respective Foreign Investment bodies that need to green light the deals, there is a long way to go and evaluating both deals at once is a lot of work. I’d say it would be likely that the APN/JCD deal would pass."
Posterscope MD Bryan Magee
Other leaders have said that because the deal doesn't represent the cannibalisation of the other's asset base, there should be little issue.
Hyland concludes that it will come down to how it impacts the industry's growth and whether it can leave enough room for new entrants to make a play for tenders and contracts.
"A small outdoor company will find it difficult to invest in technology and infrastructure to improve the experience of a commuter. As well as to structure programmatic technology to allow advertisers to serve ads in real time – picking and choosing dayparts and geographical areas," Hyland says.
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