When Ron Zeghibe and Francis Goodwin led a management buy-in and buy-out of the Maiden Group three years ago, they not only gave the company a new lease of life. They also boosted the whole outdoor business, in a similar way to Eva Herzigova and her Wonderbra.
Their decision to float the company later this month has been applauded by their rivals – a remarkable achievement in an industry that has often preferred to fight itself instead of other media.
Coupled with record profits at More O’Ferrall (at present the only publicly-quoted outdoor company) and the imminent launch of the industry’s new POSTAR research system, it suggests outdoor is starting to fulfil the promise that too often has proved a false dawn. It’s even ridden out the latest cut-backs in tobacco spending and the switch of spirits and pools advertising to television.
The combination of Zeghibe, a former management consultant who is Maiden’s chief executive, and Goodwin, its managing director in charge of marketing, has won over not only its rivals but also many advertisers and agencies, who have always had reservations about outdoor’s ability to build brands.
They have even managed to convince the Office of Fair Trading – which has had something of an obsession with this relatively small area of the advertising business – that not all takeovers in the industry are a bad thing.
Though the OFT insisted on referring the Mills & Allen bid for London Transport Advertising to the Monopolies and Mergers Commission, effectively scuppering the deal, it allowed Maiden to buy British Transport Advertising – even though it gave it well over 25 per cent of the 48-sheet sector. That takeover made Maiden one of the industry’s largest groups, paving the way for this month’s flotation.
The OFT decision was not a matter of luck, and demonstrates the management skills that Zeghibe and Goodwin have brought to outdoor. From the moment they planned the Maiden buyout, they had a clear strategy for growth and saw the OFT and the MMC as a major regulatory hurdle. The MMC, in a series of time-consuming investigations, had insisted on viewing the outdoor industry as several separate markets. No contractor was allowed to take over another if it would take its market share to more than 25 per cent of any product sector, so rationalisation within the industry was effectively stalled.
This occasionally had good effects. When the OFT blocked Mills & Allen’s takeover of LTA, the company was bought by the American transport advertising group TDI, led by the dynamic Bill Apfelbaum. He has brought marketing expertise and innovation to an area where it was lacking.
But with Mills & Allen already in the hands of the Havas group, LTA owned by Americans, and Decaux of France making inroads into the bus-shelter sector, it seemed British outdoor companies were at a disadvantage. Overseas groups could buy up the industry, while the existing operators had little room for manoeuvre.
Zeghibe and Goodwin patiently put their case to advertisers, agencies and regulators, arguing that each takeover should be looked at case by case. Their groundwork paid off.
Similar attention to detail helped Maiden build organic growth as well, by improving its sites, often through illumination, and introducing marketing initiatives that have benefited outdoor as a whole, like its QED test-marketing service.
“We started off with a very good product that had been built up over 70 years, but it was undervalued”, says Goodwin. “We’ve tried to build Maiden as a brand, by understanding advertisers’ needs better, and setting out to meet them.”
Maiden is about to bring those skills to BTA, doubling its marketing budget this year and introducing further initiatives, including sponsoring the IPA Effectiveness Awards – the first time an outdoor company has done so.
It’s a measure of Maiden’s success that its rivals are strengthening their own marketing activities, with new appointments from other media and marketing companies. David Pugh, former marketing director of the Daily Telegraph, has joined Mills & Allen and Ian McComas, formerly of Procter & Gamble, Heinz and Asda, has become marketing and sales director of More O’Ferrall, where Roger Parry – late of Aegis and a founder of the pre-Reuter London Radio – was recently made group chief executive.
“I think outdoor is the next radio” says Parry, referring to the fastest-growing display medium of recent years. “Like radio it’s had an incredibly active period of consolidation, with an injection of new blood and strong management – and it’s now getting a new research system.”
More O’Ferrall has just reported a 58 per cent increase in profits, which Parry attributes largely to the continuing success of Adshel – perhaps outdoor’s greatest-ever marketing initiative – under managing director Vincent Slevin. “Adshel grew by 33 per cent last year, which must make it one of the fastest-growing media brands.”
Parry welcomes the fact that Maiden is going public. “They’ve done a spectacular job and it will significantly raise the profile of outdoor as a professionally managed industry.”
Goodwin, too, believes this month’s events augur well for outdoor, and not just because of Maiden’s flotation. “If you see how we, and the industry as a whole, have grown in recent years without a credible audience measurement system, think what we can do once POSTAR is in place.”
Perhaps radio must look to its laurels.