Global Media & Entertainment, the UK’s largest commercial radio operator whose networks include Capital, LBC, Heart and Classic FM, has acquired the out-of-home advertising companies Primesight and Outdoor Plus for £200m — its largest ever deals. The two companies have aggregate revenues of some £90m.
The 11-year-old Irish-owned Global has expanded into advertising and music festivals in recent years amid radio industry concerns about declining young audiences. But overall audiences and profit growth (for Global as well as its close UK competitor Bauer) seem to have avoided any kind of digital disruption – so far.
Even music streamers like Spotify, Apple and Amazon seem not to have dented the popularity of radio in the UK. But the impressively growing £300m-revenue and 26% EBITDA-margin Global is not waiting for the tsunami that just might hit radio at some point; its investment in the increasingly digital world of out-of-home advertising (OOH) seems a smart move.
A 2017 report by PWC forecast that digital out-of-home (DOOH) would become more widespread everywhere in ways that would improve measurability and targeting. DOOH allows for more dynamic ads, some resembling short broadcasts more than static posters. Many high-traffic outdoor sites feature a spattering of news, weather and celebrity content to reinforce the comparison with broadcast media.
As DOOH is still relatively new, digital formats carry more prestige and tend to be targeted by top-tier advertisers. Global DOOH revenue has increased from $6.9bn to US$11.7bn in the past four years and the digital proportion of all OOH advertising has increased from 23% to 32%. The UK is one of the most digitised markets in Western Europe.
Global’s two-deal swoop to become the country’s fourth largest OOH firm (behind JCDecaux (the 35% leader), Exterion and Clear Channel) is sure to spark some advertising innovation in shopping malls and transport hubs that may combine big-screen digital displays with radio and messages on the smartphones that increasingly also account for young radio listening. Global hopes to make Clear Channel, for one, wish that it still owned America’s largest commercial radio network. Convergence looms.
