oOh!media - owner of wide format specialist Cactus Imaging – says it will cooperate with an Australian Competition and Consumer Commission (ACCC) investigation into the use of heavy discounting in Australia’s $1bn outdoor advertising market.
|oOh!media billboard in Adelaide|
Outdoor companies offer discounts of up to 50 percent on less valuable assets to ensure that media agencies spend more on large format signage, according to Ad News. Examples include discounted rates on public transport advertising contracts which prevent competitors from being able to match the offer.
In a statement to the ASX, oOh!media said it was aware of media reports regarding “industry-wide inquiries” by the ACCC in relation to discounts and rebates in the out-of-home (OOH) advertising industry.
As part of its usual business operations, oOh!media corresponds with regulators including the ACCC from time to time. oOh!media understands its legal obligations and respects the ACCC’s processes. oOh!media’s practice is to engage with regulators to assist with any questions regarding the industry. oOh!media will not be making further comment at this time.
Several outdoor companies have been asked to provide information as the corporate regulator considers whether advertising deals which include heavy discounts are in breach of the Competition and Consumer Act. The investigation is in an assessment stage before a decision on whether a full investigation is warranted.
Six months ago, as the ACCC approved two major outdoor mergers that reshaped Australia’s OOH industry - oOh!media’s $570 million deal to buy Adshel Street Furniture and JCDecaux’s $1.2 billion acquisition of APN Outdoor Group - chairman Rod Sims noted:
“Some market participants expressed some concerns, in particular about the possible anti-competitive bundling of different out-of-home categories. However, the major media agencies and large advertisers did not generally express strong concerns, and the ACCC considers that bundling is unlikely to have a significant impact on competition.”
The ACCC has declined to comment on the investigation.