With the news of the Lamar investment in Vistar Media, our internal conversation at Insider was around one key issue and that was confirmed yesterday from several industry executives.  This comment from a reader and an owner/operator sums it up nicely.

 We are are a small operator, and compete with Lamar in several billboard markets. Our concern is that once Lamar has completed the $30 mill funding of Vistar, Lamar could instantly get access to all of our ad rates. Then, over time we will start to lose Vistar platform deals and tie breakers in our markets to Lamar. Operators like me will grow frustrated and drop the platform. Once that happens advertisers who utilize Vistar will get less selection, and with reduced competitive pricing pressure they lose some efficiency and ultimately a measure of billboard effectiveness.  This doesn’t seem well thought out for either the operators or the advertisers.

Rather than speculate, we reached out to Michael Provenzano, CEO and Vistar Media with one question.

Out of home operators are concerned Lamar will be able to gain access to specific information on location and performance and potentially gain an advantage in competitive markets. Can you comment? 

Appreciate you bringing that up and giving us the chance to comment. As you would imagine, we have been in close discussions with all of our media owner clients, including the other large national billboard operators, to reassure them that we are committed to operating independently and supporting their business goals. Below is some commentary you can include from Michael about the commitments to ensure that appropriate level of independent operation:

“Lamar will not gain any access to proprietary media owner information, including details on locations, performance and pricing. Our board members are expected to serve their fiduciary responsibilities which includes acting objectively on behalf of the company and not placing the organization under unnecessary risk that could arise from a conflict of interest. Further, Lamar will not receive any preferential treatment on the Vistar Exchange, either through technical prioritization or influence over where buyer budgets are directed. Vistar remains as committed as we always have been to operating an independent marketplace.”

Insider’s Take: Growing a business utilizing a strategic partner can be very effective, but brings with it competitive concerns.  Insider feels that Vistar is handling this correctly in blocking Lamar from access to client information.  However, Vistar will need to monitor this very carefully.  The recent issues with Amazon and the temptation to use their access to customer information to create advantage is a good warning tale.  As our small operator pointed out above, Vistar’s operator client base will be watching carefully.

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