UK out of home buying giant Posterscope has been a huge driver of parent company Aegis’s profits, realised last last year when Dentsu paid £3.2bn to buy Aegis.
But Posterscope has suffered a number of reverses recently: most notably losing all Omnicom’s UK business to former Kinetic boss Eric Newnham’s start-up OOH agency Talon.
Tesco spends about £7m on outdoor, although it’s reported to be a fiddly old account. But Tesco is a huge advertiser in the UK so you want a piece of it.
In the end the business went to WPP’s Kinetic but Posterscope’s case was, apparently, not helped by the fact that it ceased to be an independent corporate entity some years ago, being absorbed into Aegis media agency Carat.
At the time it had been hit by a number of scandals which resulted in, among other things, its German boss being sent to jail. There was also speculation that it wanted to conceal its OOH margins, which are much greater than those in TV or other media buying due to generous media owner rebates.
But Tesco also holds a UK banking licence, for in-house Tesco Bank. And one of CEO Phil Clarke’s plans is to expand this to offer current accounts, mortgages etc.
And UK banking rules are incredibly strict about who bankers can offer contracts to. So contenders for these accounts (bear in mind client Tesco is a UK banker as well as a supermarket) need to be able to show all the financial bells and whistles – turnover, profit, balance sheet, liabilities etc – an independently registered company should be able to.
Posterscope, of course, cannot; being an operating division of Carat which in turn is a subsidiary of Dentsu/Aegis. If Carat had pitched it might have been different.
All of which will leave veteran Posterscope boss Annie Rickard spitting feathers. She’s determined to get Posterscope back up there as the leading OOH independent but, without Omnicom’s media business, it’s hard.
Might there be some re-engineering of Posterscope at Dentsu/Aegis?