Chaos Theory proposes that tiny changes in complex systems can have unexpected and unpredictable consequences. It’s more commonly known as the Butterfly Effect, from the idea that a butterfly flapping its wings in one part of the world could somehow result in an earthquake somewhere else. Closer to home Chaos Theory reminds that the world of business is interconnected, even if the effects may be secondary.
If that all sounds pretty fanciful, consider the seismic announcement that JC Decaux has ousted Clear Channel Transport for London’s coveted £400m bus-shelter contract. This puts JC Decaux in a powerful position for the next decade, servicing the UK’s largest OOH market, and aligns it well for the upcoming London Underground advertising contract that TfL is putting out for tender.
The repercussions won’t end there. Clear Channel UK has been used to its TfL revenue stream for the past ten years and will need to target new business quickly.
It’s impossible to know exactly how Clear Channel will respond to this challenge, but here’s what our crystal ball says:
– Chairman and CEO, William Eccleshare, might decide to audit the Clear Channel portfolio to identify the most profitable business on their books, ahead of restructuring.
– This change in fortunes could herald a round of mergers and strategic alliances.
– Clear Channel may want to exploit its recent success as the Official Media Partner of the British Masters, in conjunction with Sky Sports.
– It may look for new ways to realise the commerical potential of its Storm digital platform.
It’s a strange irony that a sector so dependent on technical innovation and new ideas is often unable to cope with changing circumstances within the industry itself. Perhaps the most valuable lesson to be learned from all this is the importance of information.
If OOH sites are not delivering the goods you need to know where and why – and what to do about it. The consequences of not knowing the value of your portfolio can be catastrophic.
We salute J C Decaux’s success and look forward to seeing how Clear Channel responds. As Dr Nido Qubein, the business leader and public speaker, put it succinctly: Change brings opportunity.