OFT launches market study into outdoor advertising

50/10 18 May 2010

The OFT has today launched a market study into outdoor advertising. The study will focus on both the structure of and competition within the sector.

The outdoor advertising sector has a complex, multi-leveled structure, with advertising agencies, specialist buyers of outdoor advertising space, outdoor media owners who provide the space, and site owners such as local authorities. The sector is highly concentrated at the levels of the specialist buyers and outdoor media owners. This study will consider whether there are any distortions of competition or barriers to entry at different levels within the sector.

Among other things, the study will look at the payment of commissions by outdoor media owners to the specialist buyers and how these affect the incentives of those buyers.

The study will also enable the OFT to consider potential issues with contracts between local authorities and outdoor media owners. The OFT understands that some contracts might contain clauses that prevent local authorities from dealing with other outdoor media owners or with advertisers directly. This may be to the detriment of local authorities and therefore the tax payers that fund them.

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 initial phase of this project is expected to last three months, during which time the OFT will gather and assess evidence from interested parties. The final duration and scope of the project will depend on the outcome of the initial phase. The market study is expected to be completed by December 2010.

The OFT will be speaking with key parties directly. Others who wish to make a submission should send their written views by email to: outdooradvertising@oft.gsi.gov.uk or by post to:

Outdoor Advertising Market Study
Office of Fair Trading
Floor 2C
Fleetbank House
2 - 6 Salisbury Square
London EC47 8JX

NOTES

Updates to the timetable for the study will be published on the market study page.
Read the Q&As.
OFT market studies are carried out under section 5 of the Enterprise Act 2002 (EA02) which allows a market-wide consideration of both competition and consumer issues.
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 results of 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.

Back to: Press releases

Navigate the OFT website:

News and updates

What was new in...

Feedback

Press releases 2010 -