OFT launches investigation into outdoor advertising market
The Office of Fair Trading (OFT) is to conduct a market study into outdoor advertising, focusing on the structure of the sector and contract arrangements between local authorities and outdoor media owners.
The study will examine whether what it describes as the “complex, multi-leveled structure” - which includes advertising agencies, specialist buyers of outdoor advertising space, outdoor media owners who provide the space, and site owners such as local authorities - of the market is distorting competition or providing barriers to entry.
It will look at whether the concentrated ownership of sites (primarily by local authorities) and outdoor media owners is a barrier to competition. More specifically, the OFT will examine contracts between local authorities and outdoor media owners and whether these contracts might contain clauses that prevent local authorities from dealing with other outdoor media owners or with advertisers directly to the detriment of local authorities.
The study will also look at the payment of commissions by outdoor media owners to the specialist buyers and how these affect the incentives of those buyers.
Heather Clayton, Senior Director of Infrastructure, said: 'The cost of all forms of advertising is reflected in the price consumers pay for goods and services. 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.'
The evidence gathering phase of the project is expected to last three months, with the study expected to be completed by December 2010. The OFT said that it will contact key parties directly, but those who wish to make a submission should send their written views by email to: This email address is being protected from spambots. You need JavaScript enabled to view it. or by post to:
Outdoor Advertising Market Study
Office of Fair Trading
Floor 2C
Fleetbank House
2 - 6 Salisbury Square
London EC47 8JX
Market studies involve an analysis of a particular market with the aim of identifying and addressing any aspects of market failure from competition issues to consumer detriment and the effect of government regulations.
Possible outcomes from market studies include:
- enforcement action by the OFT
- a reference of the market to the Competition Commission
- recommendations for changes in laws and regulations
- recommendations to regulators, self-regulatory bodies and others to consider changes to their rules; campaigns to promote consumer education and awareness
- a clean bill of health.
