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Aren’t some Outdoor Plus shareholders compromised by a conflict of interest?

Marc MendozaThere’s a lot going on under the radar in OOH – or posters, as we anciently called it. And I’m not simply talking of Omnicom’s Eric Newnham-fronted effort to crash the charmed circle of UK specialist buyers – namely WPP-owned Kinetic and Aegis-owned Posterscope.

No, what caught my eye recently was something entirely different. It concerned premium digital site owner Outdoor Plus and its opening of yet another of the landmark London locations in which it specialises – in  this case The Spire, a 20 metre-high construct unmissably situated on the A40 exit from London.

The PR spiel, as conveyed in MediaWeek, was suitably gushing: access to a dedicated commuter and business audience; balanced male:female ratio; 60% ABC1; capable of targeting traffic both in and out of central London. What more could an advertiser ask for?

Very little, according to an excited Grant Branfoot, Outdoor Plus’s sales director: “The potential for advertisers is vast and through the addition of The Spire to our expanding digital portfolio (it includes The Eye in Holborn, the Euston Road Underpass and Vauxhall Cross), we think we can help advertisers exploit the immediacy, the creative possibilities and the opportunity for highly targeted messaging which is associated with large format outdoor digital screens.”

The potential for advertisers is vast, is it Grant? More correctly, the potential for some, carefully selected, advertisers is vast. Many will likely get scarcely a sniff of a placement. The reason is somewhat complicated, and to do with Outdoor Plus’s curious shareholding structure. But don’t go away, readers. It’s worth the wait, really.

Outdoor Plus is a reasonably sized, reasonably well-run private company founded in 2006 by Jonathan Lewis – who remains its managing director. Turnover was about £15.42m in the year to December 31, 2011 – the latest financial figures recorded in Companies House. Group operating profits – of which Outdoor’s comprised the vast majority – were £1.8m, allowing the six directors to award themselves collective “emoluments” (or fees) of about £770,000.

The roll-call of these directors makes interesting reading. Among them are Philip Andrew Georgiadis, daytime job: chairman of Walker Media; and Marc Sydney Benjamin Mendoza, better known as head of Havas Media UK. In other words, principals of notable media-buying organisations whose job it is, inter alia, to oversee without fear or favour the negotiation of the most advantageous placements for their clients on UK OOH sites.

Turn to the share structure of the company and things get even more interesting. It emerges that Georgiadis is also a 5.3% shareholder in Outdoor Plus. Mendoza (pictured) owns just a shade more. And then there’s Mendoza’s cousin and, technically, his boss, Havas Media UK group head Mark Craze, who owns 3.2%. But we’re not quite over yet, because Stephanie Gottlieb, wife of Colin Gottlieb – the EMEA chief executive of Omnicom-owned OMG – also owns 1%.

Now I’m not suggesting anything illegal is going on here. At one level, you have to tip your hat to Lewis, who has been extremely shrewd in persuading these media luminaries to come aboard, thereby – shall we say – reinforcing his revenue stream.

Indeed, even if the shareholding of the Havas, Walker and OMG representatives were to be combined, they could hardly be accused of concert-party style manipulation.

None of that, however, quite expunges the whiff of conflicting interest surrounding this cosy media buy-side/sell-side coalition. Clients whose accounts are not held by Havas, Walker or OMG may well be the losers. And those whose accounts are need to be assured that they are getting the very best deal for all the right reasons.

Senior media executives, like Caesar’s wife, should be above suspicion.

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One Response to Aren’t some Outdoor Plus shareholders compromised by a conflict of interest?

  1. Fred Titmuss says:

    “Senior media executives, like Caesar’s wife, should be above suspicion”.

    What a killer line.

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