By Charles Lee Mathews. Media agencies on outdoor media’s big problems and how to transform the industry.
The out-of-home (OOH) media industry is grappling with a credibility problem, and outdoor media houses argue it’s time for the sector to address long-standing issues. Celia Collins, VP of Publicis Media, doesn’t mince words: “Let’s be honest, out-of-home has been seen as “the cowboy” medium for a number of years.”
This comment follows an investigation by South Africa’s industry watchdog, The Competition Commission, into allegations of collusion, price-fixing and anti-competitive practices in the OOH media sector. The commission found that members of the industry body, Out of Home Media South Africa (OHMSA), conspired to set prices and fix trading terms between 2004 and 2018.
Fair play, fair practice wanted
Collins believes these actions have damaged the sector’s credibility. “This practice continues today and not only with the members listed in the investigation,” she says. “What we should be looking at is to level the playing field between all OOH suppliers.”
She advocates for using empirical data and a common currency for outdoor media. This approach, says Collins, if measured against legitimate audiences and reasonably compared, would ensure smaller players get a fair chance to compete alongside industry giants.
Interestingly, the credibility crisis hasn’t dampened advertising spend. Collins notes, “We have actually seen an increase in OOH spending at the end of 2023 and going into 2024. I do not believe that most agencies are even aware of the investigation and the outcome thereof.”
The investigation
The commission probe involved 12 OOH companies alongside the OHMSA. These included Boo! Media; Insight Outdoor; Outdoor Network; Adreach; Tractor Outdoor; SP Media; Primedia Outdoor; JB Media; Likhwane Media; Anchor Zedo; Jonet Outdoor; and Airport Media. Primedia was the only company to settle, agreeing to pay a R4m fine split between a cash payment and free advertising space for small businesses owned by previously disadvantaged individuals.
Best known for its radio stations, Talk Radio 702 and Cape Talk, Primedia’s stakeholders include the Mineworkers Investment Company, private equity firm Ethos, banking group FirstRand, and two subsidiaries of Old Mutual (Old Mutual Private Equity and Old Mutual Specialised Finance).
“The commission is engaging in an ongoing settlement discussion with the other 12 respondents to settle the case against them,” a spokesperson for the commission told MarkLives MEDIA. “Members of the public, including any of the stakeholders in the out-of-home media industry, are encouraged to approach the commission and report any conduct that contravenes the Competition Act,” the commission said.
Nomzamo Moalusi, marketing and communications manager for Primedia Outdoor points out: “The settlement agreement between Primedia Outdoor and the Competition Commission pertains to an investigation into documents historically exchanged between 2004 and 2014 through Out of Home Media South Africa (OHMSA), an industry association.”
“The settlement agreement does not include an admission of liability. Both the commission and the Competition Tribunal recognise that the terms of trade were coordinated through an industry body, not between specific members,” she adds.
Industry body addresses challenges
Angelo Tandy, chair of OHMSA, emphasises their efforts to address industry challenges: “We have worked tirelessly to fix the previous challenges facing the industry by working hand in hand with the government and the various municipalities in efforts to positively transform the industry.”
“It is of utmost importance to build SMMEs and promote strong working relations with all industry stakeholders,” he said. “We will continue to promote the current law and ethical business practices. This settlement allows the industry to move forward without the burden of past issues,” Tandy added.
Collins says that the industry needs to ensure proper codes of practice, get sectoral consensus, and ensure that industry bodies like MASA, ASA, and the AMF are on board. Moving forward, she notes that the media industry would do well to ensure all sites are legal, registered with the right governmental authorities, with the right paperwork.
Collins adds that the industry must ensure: “No media owner will hijack someone else’s board and install their client’s visuals. All relevant taxes are paid on the boards. An owner of a billboard should not have more than one sales house to sell the board.” She explains that the last point has created massive confusion about the ownership of boards.
Big issues must still be sorted
Christo van den Bergh, head of out of home at Mediology says there are even more pressing issues the industry needs to square up to. “Navigating council approvals, addressing oversaturation in certain areas, combating illegal sites, and achieving consensus on audience measurement standards,” he said, are amongst the most important issues the sector has to resolve.
“These issues pose more substantial threats and require concerted industry effort to resolve. While the investigation is a serious matter, it also serves as an opportunity for the industry to reevaluate practices and enhance transparency, ultimately strengthening its credibility in the long term.”
Charles Lee Mathews is a contributing writer to MarkLives MEDIA, as well as co-founder of The Writers, a writing consultancy.
