Thursday 17th March caused a reading on the Richter scale in Camden, North London as the eagerly anticipated news that incumbent Exterion Media had fought off a strong challenge from JCDecaux UK, to be awarded the worlds largest Out of Home advertising contract from TFL.

The London Underground, DLR, Cross Rail and London Overground contract has been a hard fought battle that could have changed the face of the UKs outdoor advertising structure for a decade.  The 10 year contract is said to be worth anywhere between £1bn and £1.5bn in revenue.

According to Out of Home specialist Talon Outdoor, "The ten-year deal will invest time and money across the environment. We’ve seen dramatic change to our rail, shopping and airport environments in recent times. TfL will oversee an even more dramatic overhaul of the Underground as London continues to showcase its offer to the World.

Quality, high impact sites; more digital screens (but not a 100% transition as the value of classic OOH in reaching this valuable mobile London audience is not understated) will complement the technology improvements already underway in Wi-Fi access and other smart data initiatives. Interaction with smartphone usage will only grow in this environment, driving engagement with people’s purchasing, social lives and social media creating a strong and unlimited opportunity for most brands."

What this means for the Out of Home industry in the UK is that JCDecaux are not holding over 50% of market revenues and therefore a monopolistic hold of spend in OOH in the UK.  If they were successful, JCDecaux could have had a case to be on every single OOH brief, a huge negotiation strength.  Thankfully for the OOH marketplace, this is now not an option.

According to Postercope's #TheRealWorld the OOH market share of revenue remains dominated by JCDecaux, but Exterion Media's growth with the investment into DOOH when TFLs upgrade comes to fruition.

According to Gideon Spanier at Campaign Magazine, Exterion Media could be set to takeover rival Clearchannel Outdoor.  This would see the powers of UK OOH landscape shift further with a two giant media owners.  

Gideon writes, "The catalyst for Exterion Media and Platinum Equity to consider a takeover move has been winning Transport for London's £1.1 billion out-of-home ad contract, the most valuable such deal in the world, on Thursday. 

However, Exterion Media and Platinum Equity are believed to have already done preliminary work on a possible bid approach before the outdoor company beat rival JCDecaux to win TfL’s business.

A merger between Exterion Media and its bigger rival CCI could create a powerful "number two" to JCDecaux outside the United States. "

A recent statement from TFL regarding their acknowledgement that they are a major advertising company was a surprise.  A surprise that they hadn't realised this before hand.

Writing in The OutLook, the first report on the outdoor ad industry by trade body Outsmart, Pizzamiglio said TfL would bring a "bold new approach" to how it does business in London. 

He said: "There has been a quantum leap in TfL’s thinking. Obviously the smooth operating of the transport network is always the priority, but it has been realised that in this new more commercial world, whether by design or by good luck, TfL is also an advertising company.

"The demonstration of a desire to work in new ways with partnership at the core is integral in securing the long term agreement with TfL. This long term view clearly shows a commitment from TfL to reflect the need for more agile and flexible solutions for advertisers whilst maximising the commercial potential for all parties." 

Pizzamiglio said TfL’s "fresh approach" to outdoor advertising would include bringing together different networks, including the tube, DLR, Overground, and Tramlink, as well as new investment in developing and advancing its outdoor media estate. 


If you would like to know more about how to engage with the London Underground audience or any other Out of Home or Digital Out of Home opportunities please do get in touch with us here