Australia’s two biggest out of home providers, oOh! Media and APN, are set to renew their bid to merge despite concerns by the Australian Competition and Consumer Commission (ACCC) that the new company would reduce competition, force out smaller players and increase prices for agencies and advertisers.
The two players announced plans to merge in December 2016, however, 10 days ago the ACCC issued a statement expressing concerns the marriage of the industry’s two biggest players would create something approaching a monopoly and dramatically reduce competition in the sector.
Other outdoor players have complained to the ACCC if the merger was to go ahead then the new company would have a stranglehold over lucrative sites in Sydney, Melbourne and the airports that are so highly-prized by OOH providers.
“The ACCC’s preliminary view is that the merger is likely to substantially lessen competition in the out-of-home advertising market. The loss of competition could result in increased prices for advertisers, or lower levels of service, quality, or innovation,” the statement said.
The ACCC is due to make its final decision on the merger on July 6.
However, The Australian Financial Review is today reporting the two companies are to renew their bid to merge arguing when compared to say digital or TV ad spends, OOH is still makes up a very small per cent of overall spends.
The AFR is reporting that oOh!’s and APN’s renewed bid “will centre around data which shows out-of-home’s overall share of Australia’s $12 billion advertising market is 5.7 per cent – up from 4.2 per cent in 2009.”
It added: “However, the key point the pair will make is online’s portion of the overall advertising pie grew from 38.3 per cent in 2015 to 44.4 per cent in 2016 – or an additional 6.1 per cent of the advertising pie in Australia, greater than out-of-home’s entire share.”