UK poster boys panic over expensive Olympics sites

The imminent London Olympics were supposed to produce a boom time for the whole media sector: from the mighty WPP which anticipated heavy client spending down to the UK’s poster contractors and agencies (one of which, Kinetic, is owned by WPP). All those anticipated visitors would surely persuade advertisers to uncork their wallets.

They still may do of course, but those poster boys who have invested heavily in sites around the Olympics venues at Stratford in East London, particularly at the humungous nearby Westfield shopping mall (pictured), are beginning to panic. Some outdoor owners (and Kinetic) have spent heavily on such sites only to discover that advertisers are surprisingly cautious at this stage. And that, in some cases, planning permission for the sites isn’t done and dusted yet (and may not be).

Westfield sites have sold for £1m plus for the Olympics period and it looks as though some of them may come back on the market as the August Games grows closer. The Games organiser LOCOG, which handled the site auction in the first place, is being pressured to open it up to non-Olympic sponsors (official sponsors had first bite at this cherry with a stone in it) to prevent some severe financial embarrassment.

Elsewhere in the always intriguing area of UK posters (or out of home as we call it these days) it looks as though French-owned giant JC Decaux is no longer in the box seat to buy Ocean Outdoor, the owner of a number of huge digital poster sites including the IMAX at London’s Waterloo.

Ocean is mostly owned by Smedvig Capital and JCD is believed to have jibbed at its £50m price tag. Leading the race now are said to be another venture capital outfit or, intriguingly, a radio operator. The UK’s biggest are Global Radio and UTV Media, which owns Talksport among others. UTV has recently undergone boardroom ructions and hinted that it may sells its once-core commercial TV business in the province.

JCD has decided to spend some its money upgrading its rail network posters to digital, which it has to do in the terms of its contract with Network Rail. But it picked up the rail contract for a bargain £7m a couple of years after the demise of previous holder Titan (and before that Maiden) which had paid far more.

The company is also bidding about $200m for the fiercely-contested contract to plaster Moscow with posters. This is the subject of far more controversy than anything happening currently in the UK, with even America’s FBI becoming involved around the edges. Ad Age’s Rance Crain had the good fortune to see its bid at close quarters (although he didn’t find the experience a very wholesome one). His fascinating account of posterland (Russian version) is here.

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    I don’t know if it’s our forecasts here at GroupM which you construe as ‘the mighty WPP’ but our most recent (published December) gives some context: a guess at £40m-worth of space sold in the LOCOG auction, or 5% of the total £746m outdoor spend we predicted for 2012. That larger number would represent 6% growth for the year. We’ll make a routine revision in the summer.