The entry of new players and expansion by existing companies has increased competition in Canada’s out-of-home media business.

Although competition usually means lower prices for advertisers – and there has been some cost cutting – insiders suggest that the eventual outcome will be just the opposite in outdoor.

The rationale for that is simple: out-of-home media companies are now paying more for transit contracts as well as for the right to lease billboard, poster and mural real estate.

On the transit side, increased costs can be attributed to the fact that new players are pledging more to transit authorities for the right to provide transit advertising services in an effort to establish a foothold in the marketplace.

One of these new players is Obie Media of Vancouver, b.c., the Canadian division of Obie Media Corp. of Eugene, Ore., which is publicly traded on the Nasdaq Small Cap Market.

Fueled by investment dollars, Obie did a fair amount of expansion in the mid-western and eastern United States last year and also made a move into Canada.

Last August, it won the contract to provide transit advertising services for BC Transit’s 1,400-vehicle system from incumbent Pattison Outdoor Group.

This month, it opened an office in London, Ont. to handle the 170-vehicle fleet of the London Transit Commission, a contract awarded last fall and previously held by Urban Outdoor Trans Ad.

While not as obvious as the cost issue, another result of competition on the transit side is the increased regionalization of the players.

Jim Wilkins, director of national sales for Obie, says transit companies have no choice but to grow on a regional, market-by-market basis because expansion depends entirely on where the opportunities present themselves – in other words, on which transit authorities are tendering their contracts.

Although the company offers other outdoor products in the u.s., Wilkins says Obie has committed itself to transit in Canada and, in particular, to developing smaller markets.

Wilkins says that won’t stop him from looking at Canada’s largest market at the end of this year – along with everyone else in the outdoor industry – when the Toronto Transit Commission contract goes out for bid.

John Baird, vice-president and general manager of Toronto-based Urban Outdoor Trans Ad, the company that currently has the ttc contract, says his company is redirecting its focus from national to regional in the transit category.

By concentrating on the Toronto market, Baird says Urban Outdoor Trans Ad can court local and regional advertisers as well as national advertisers that tend to favour transit, such as confectionery and packaged goods clients.

Brian McLean, president of outdoor giant Mediacom, says he welcomes new competition because there have never been more feet on the street selling and spreading the word about out-of-home.

His enthusiasm for competition, however, is tempered by the fact that buying outdoor isn’t as tidy or easy for advertisers as it used to be.

McLean points to airport advertising, for which a national advertiser must deal with Omni in Montreal, Eller Media in Toronto, a New York company for still others and a slew of airport authorities.

(Mediacom had the Toronto Airport business for 16 years, a contract assumed by new entrant Eller Media Co. – previously More Group Canada – last year.)

McLean says, wherever possible, media buyers should be able to call one number to handle national programs, rather than have to deal with a host of regional players.

While the transit and airport side of out-of-home is becoming more regional in nature, Canada’s major billboard, poster, and mural companies – Mediacom, Pattison, Urban Outdoor Trans Ad and Omni: The Outdoor Company – are building themselves into national companies, with Mediacom and Pattison neck-and-neck for the lead.

To complicate matters further, aggressive growth is causing saturation of billboard faces in some prime locations at a time when the cost of doing business continues to go up.

Reneault Poliquin, vice-president and general manager of Omni, says he’s concerned that the rising cost of leases will create an upward price spiral over which suppliers have little control.

‘The main thing is to make sure leases are stable. There is quite a lot of supply, but on the other hand the demand is also there.’