Elpert Fitzwarren, Business Writer

Ronan McGrane, chief executive officer, National Outdoor Advertising Limited.

Anglo-Irish investors who recently acquired two of the biggest outdoor advertising production and printing companies - National Outdoor Advertising and City Graphics - say that they are not only spending over J$200 million to upgrade capacity here, but also hope to use Jamaica as a springboard into the Caribbean and Latin America.

"Yes, we intend to expand into the Caribbean and are looking at ventures," said Ronan McGrane.

McGrane, an Irishman who, in July, took over as chief executive officer of NOA, is in the process of merging NOA and City Graphics.

The merged entity will continue to operate under the name National Outdoor Advertising.

Outdoor advertising accounts for about 10 per cent of Jamaica's $5-billion-a-year advertising business, and National Outdoor is perhaps the most iconic name in its segment of the market.

NOA's closest rivals are Caledonia and Signtex, and together the three command an estimated 70 per cent of the outdoor market, according to McGrane.

What that portion looks like in dollar terms would have to be verified by market research, which the new NOA said is now being arranged.

T&T a prospect

Although McGrane declined to name specific overseas markets where NOA plans to venture as early as next year, either through organic growth or acquisition, he conceded that Trinidad and Tobago would be a good prospect.

"Trinidad would make sense in volume and value," he said of the the southern-Caribbean country, whose oil and gas-based economy has enjoyed double-digit growth in recent years.

But he added: "Don't rule out Central and South America."

It would make sense, from an economic perspective, that Port-of-Spain would be in the sights of the new bosses of NOA and that perhaps Latin America would not be far behind.

Market knowledge and access would also be an advantage.

For instance, McGrane was running a distribution start-up in Port-of-Spain when he was recruited early this year by Vincent Slevin, the new majority owner of NOA, to head his Jamaican acquisitions.

Slevin's company bought the 45-year-old NOA from the Chai brothers, Eddie and Wayne, and City Graphics from Mark Ho-Tai, Jeremy McConnell and Deborah Lanigan.

Ho-Tai, McConnell and Lanigan continue to work in the business.

"I know something about Trinidad and Tobago," McGrane quipped in an interview on Wednesday.

Relatively easy

Significantly, too, Trinidad, like Jamaica, is a member of Caricom, the regional trade and functional cooperation group that is transitioning into a single market. On that basis, expansion by a Jamaican firm like NOA should be relatively easy, analysts say.

At the same time the semi-retired Slevin, whose name used to be one of the biggest in the global outdoor advertising business, has more than passing knowledge of the hemisphere.

An Englishman of Irish ancestry, Slevin was managing director for several years of the big UK-based outdoor advertising company, More O'Ferrall plc.

When More O'Ferrall was acquired by America's Clear Channel in 1997, Slevin became Clear Channel International's chief operating officer (COO), focusing on its global outdoor advertising business, until he retired in 2002.

Moreover, Slevin who is married to a Venezuelan, has a home on the island of Margarita and, according to associates, wants to spend more time in this region.

"Mr Slevin is operating with other private investors in the Caribbean and Central America," said McGrane.

Slevin and his partners apparently see in Jamaica not virgin territory for outdoor advertising, but one that, with the introduction of first world techniques and technologies, could be on the cusp of growth even though Jamaica's advertising industry has been largely stagnant for years.

Analysts estimate the size of the industry reached $5 billion in 2007, but stress that it hardly grows much more than the rate of inflation.

McGrane declined to disclose how much Slevin and his partners spent for NOA and City Graphics and is cagey about providing numbers from which this might be estimated.

But he told the Financial Gleaner: "We are investing upwards of US$3 million over the next 18 months. We are upgrading our facilities and the range of media."

Demand will increase

Slevin's assumption is that international companies coming into Jamaica, and elsewhere in the Caribbean and the Americas, will increasingly demand the quality of outdoor advertising, in a range of media, and a standard of service that they receive in their home markets.

"It is a developing market," said McGrane. "We are working on our infrastructure and we intend to give the advertisers who are flocking into Jamaica the same quality they receive globally."

For example, McGrane is about to introduce a new form of advertising here, the mono-pole, a cylindrical metal pole on which advertising is mounted, and used in countries abroad but never yet in Jamaica.

There were three of them lying on NOA's grounds Wednesday. They can, said McGrane, withstand winds of category five hurricane strength.

5,000 'faces'

It is estimated that there are about 5,000 of what the outdoor advertising industry refers to as 'faces'.

But this segment of the operation accounts for only about a third of the new NOA's group sales. Two-thirds is from printing and related businesses.

It used to be that cigarette and drink firms, the so-called sin products, dominated outdoor advertising, but increasingly, the banking and mobile telephone advertising wars are being fought from billboards, bus shelters and the sides of vehicles.

According to McGrane, outdoor advertising in relatively cheap compared to other media, and by introducing new and creative techniques marketers can quickly roll out or change the emphases of campaigns.

If NOA and other outdoor advertising companies - they are just about to launch a trade association - are able to convince advertisers that this is the new best thing, they expect that much of the initial growth will come at the expense of television, estimated to account, at present, about 25 per cent of annual advertising spend. Radio, too, is expected to suffer.

Migrated to cable

In the past two decades, for instance, a substantial chunk of the Jamaican audience for domestic free-to-air television has migrated to cable. Although the new government will allow for domestic advertising on cable networks, there are questions about its likely impact, given that the hundreds of US and international channels available to Jamaican subscribers have created an even more variegated market.

"TV is going to be even more debilitated," said McGrane, in making a case for his own industry. "We are not watching as much television as we did."

Moreover, in tight economic times, firms often cut back on advertising, and, noted McGrane, "the first to be cut is TV".

Radio to decline

Radio, with its 15 per cent share of the advertising market, by the analysis of the NOA boss, could also see a stagnation if not decline of its share of the advertising market, which has to be shared among a larger number of players.

"People are taking more and more of the music on the iPods and other devices, and their phones," McGrane said.

"The Internet is growing but penetration in relatively low in Jamaica."

Surprisingly, the element of Jamaica media that McGrane says continues to hold its own is newspapers - the one that is under most pressure internationally.

The print media here is estimated to account for about 40 per cent of the island's advertising business.

business@gleanerjm.com

Irish owners of National Outdoor