Global's Exterion deal: A potential watershed?
Kinetic UK's John Davidson shares his views on what Global’s acquisition of Exterion means for the media industry
Late last Friday, Global announced the completion of their out-of-home trifecta, revealing a binding agreement to purchase Exterion Media. Once the deal is finalised, Global Outdoor will become the second-largest UK OOH media owner, giving them immediate scale and influence in the sector.
For an industry experiencing the most transformational period in its history, Global’s entrance has the potential to shake up the landscape still further. It’s too early to know what Global’s plans are for the newly-formed business, however there are many questions that will need addressing.
Such a committed entrance into OOH is certainly a testament to the strength of the medium and the optimism for its continued growth. Global have a track record of commercial success, and the portfolio they now have in the combined Exterion, Primesight and Outdoor Plus estates are broadly complimentary to each other.
However, merging these three entities will not be without its challenges, and it may be some time before we see the ‘real’ Global Outdoor offering emerge.
What isn’t up for debate is that this move will further accelerate the transition of OOH to a digital medium, as Global Outdoor will seek to replace much of the classic estate they now own. Many clients will be hoping the classic billboard will not totally disappear and we are keen to hear about Global Outdoor’s investment and modernisation strategy, but also to see the impact this has on other vendors, who may now need to revisit – and speed up – their own plans in order to keep pace.
Crucially, we hope that this consolidation of media owners in turn accelerates the standardisation of technologies, trading currencies and reporting needed to make automated trading in OOH a reality.
This, of course, is incumbent upon Global Outdoor working with the other media owners in the space, as opposed to ploughing a furrow of their own - in radio, Global developed DAX, which demonstrated their willingness to take a lead role in the transformation of trading and ultimately became the industry-standard trading platform for that medium.
But with JCDecaux’s VIOOH already leading in this space in OOH, it will be interesting to see which direction Global will take.
The impact on the wider industry is another issue. TV, digital and print all have strong marketing bodies, but in OOH this has been stymied by the difficulty in getting unanimity across every media owner.
Our hope is that a more consolidated market should make it easier to present a unified voice for OOH and help accelerate revenue growth – even more important when you consider the many millions of pounds that have already been invested in new and upgraded digital screens.
Broadly though, we are optimistic about Global’s entrance into the OOH sector. In the short-term, we believe it will be business as usual, as the three businesses are integrated and the portfolio strategy is developed. But looking in the medium to long-term, this could be the watershed moment, the catalyst for an industry-wide acceleration in investment in the infrastructure of OOH, both visible (the physical sites) and invisible (the technology required to standardise currencies and make automated trading a reality).
Out-of-home is undergoing a huge transformation and Global’s investment represents a huge demonstration of confidence in its future. It’s now over to them to help us collectively shape an even more compelling outdoor future for all brands and businesses.
John Davidson is COO of Kinetic UK