Billboards market faces OFT investigation

THE Office of Fair Trading is to investigate Britain's £780 million billboard advertising market amid concerns over both structure and competition.

The watchdog, which is headed by chief executive John Fingleton, yesterday highlighted how certain parts of the market are dominated by a limited number of players.

There are also concerns over the market's complex structure, which involves advertising agencies, specialist buyers of outdoor advertising spaces, media owners who provide billboards, and billboard owners, including local authorities.

Heather Clayton, senior director of infrastructure at the OFT, 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."

One of the specific angles the OFT intends to look into is the payment of commissions by billboard owners to specialist buyers. It will also scrutinise contracts between local authorities and outdoor media owners.

The initial phase of the inquiry will last three months, during which time the watchdog will take evidence from a number of parties – expected to include market leaders such as JC Decaux and CBS Outdoor.

Billboards and outdoor panels will dominate the investigation but officials will also look at outdoor digital adverts, which are a recent innovation.

In 2007, Scottish broadcasting firm STV – then SMG – sold its billboard advertising business, Primesight, to private equity group GMT Communications for 62m.