Poster companies urge caution over immediate tobacco ad ban

Despite the remarkable result, it was a lacklustre election campaign for the media, which saw TV viewers turning away from news programmes, few memorable advertisements or election broadcasts, and no change in the parties’ level of support.

Yet one undoubted winner was the outdoor industry. It took the bulk of the 25m spent on advertising by the Conservatives, Labour and the Referendum Party – money which with hindsight, it could be argued, need not have been spent, for all the impact it had on the election result. And though no party used the medium inspiringly, the campaigns reinforced the now accepted notion that posters, in an increasingly fragmented media age, can create huge awareness.

But outdoor will be one of the losers under Labour. For tobacco advertising will finally disappear from the nation’s poster sites, more than 20 years after an eager young health minister, Dr David Owen, committed Labour to a ban.

No one can say the industry has not been warned. Two decades of borrowed time have reaped it millions of pounds in unanticipated tobacco revenue, and given it the chance to reduce its own dependence on the weed.

Tobacco once accounted for almost half of all outdoor spending (alcohol provided most of the rest). Only four years ago, when Ron Zeghibe and Francis Goodwin led the management buyout of Maiden, it accounted for 20 per cent of income. Now they have reduced this to eight per cent and hope to cut it further this year.

The other big 48-sheet operator, Mills & Allen, takes seven per cent of its money from tobacco, compared with 20 per cent ten years ago. For More O’Ferrall, which mainly sells supersites, the figure is less than one per cent. But many regional contractors rely much more heavily on tobacco, and so do some of the specialist poster planning and buying companies.

Of course, the industry has not reduced its tobacco expenditure entirely on its own. Since 1982, the manufacturers have had a voluntary agreement with the Government to cut advertising and promotion levels. The most recent agreement, signed in 1994, resulted in a further 40 per cent cut in cigarette poster advertising, and the total removal of cigarettes from bus-shelter sites, shopfronts, buses and taxis.

The question now exercising outdoor contractors is how quickly Labour will seek to fulfil its pledge to abolish tobacco advertising. While some still say “if” rather than “when”, most are resigned to a ban – and some believe it could be one of the Government’s early priorities, as a high-profile (and fully-costed, in other words cheap) way of showing that New Labour has a radical edge and a social purpose.

What the industry fears most is that Labour might ban tobacco ads at a stroke, instead of giving contractors two or three years to phase them out. A few weeks ago, Zeghibe wrote to three of Labour’s shadow ministers, urging them to take account of the impact an instant ban would have. “If it were cut all at once, it would cause a recession, because it is just not possible to replace that spending overnight,” says Zeghibe. “The market would soften, and that would affect not only the contractors but many other small businesses, because we would have to reduce the rents we pay our landlords.”

In his letter, to the then shadow small business minister Barbara Roche, health minister Kevin Barron and consumer affairs minister Nigel Griffiths, Zeghibe pointed out that Maiden pays 25m a year in rents to its 7,000 site landlords. Though the largest of these is Railtrack, the majority are small businesses – corner shops, petrol stations, car dealers and local factories – which can earn anything from a few hundred to a few thousand pounds a year, depending on their location.

“If Labour claims to be the party of small business, it should give us time to make the transition from tobacco, as we have shown we can in recent years,” says Zeghibe. “I’m encouraged that Griffiths wrote back saying he was impressed with what we’ve done and that we would be consulted.”

Other contractors have another concern about Labour: that it may get tougher on planning regulations. David Pugh, commercial director of Mills & Allen, says “We’d like much more consistency. Some local authorities recognise the commercial benefits outdoor can bring, in generating rents and rates and helping small businesses. But others simply see it as a blot on the landscape. We must get better at lobbying.”

It is a tribute to those running outdoor, and their success in bringing new advertisers to the medium, that the removal of tobacco advertising will not be a total disaster. When the 1996 Advertising Association expenditure figures come out this month, they are likely to show that outdoor has given radio a run for its money as the fastest-growing display medium, increasing by more than 12 per cent in real terms.

The key to this has been the industry’s new business record. “Five years ago, only 25 per cent of brands had used outdoor,” says Goodwin. “Now it’s 75 per cent of major brands. I think we’ve won the argument that posters can get brands noticed – we’re now tackling other issues, such as how they can shift products and perceptions.”

Instead of tobacco and alcohol, outdoor’s largest category last year was motors, followed by entertainment – where Channel 5 has stood out in recent months, even at a time of prolific political advertising. So far this year, election ads have dominated the medium, helping Maiden grow by 30 per cent in the first quarter.

Even without the parties’ campaigns, spending looks healthy for May, and the long-term prospects are good. But the outdoor contractors can be forgiven for feeling a bit nervous about the incoming Government.