The third largest traditional media format, with 6.1 per cent share in the national ad pie of Rs 18,670, the outdoor industry has met the projections made in the mid-term review of the Pitch-Madison Media Advertising Outlook. However, as compared to 2008 when the ad revenue for the outdoor industry stood at Rs 1,419, the industry has had a negative growth of 20 per cent, falling to Rs 1,135 crore. The last quarter of the year 2008 saw the beginning of the economic slowdown, which continued well into the first half of 2009. This reflects in our data, which shows that in H1 of 2009, the outdoor industry saw as much as 30 per cent decline at Rs 477 crore (as compare to H1 2008). With only 11 per cent decline at Rs 658 crore in H2, the industry was on the recovery path.

Sunder Hemrajani, Managing Director, Times OOH, points out, "Advertisers were very cautious during the first half of 2009, especially in the January-March quarter. All of them were looking to conserve funds." According to him, heavy discounting was the order of the day, while fierce negotiations were adopted for all campaigns. "Billboards and bus queue shelters (BQS) went for as much as 50 per cent and 20-25 per cent discount respectively," he adds. Perhaps, as Rabe Iyer, Business Head, Allied Businesses, BIG 92.7 FM, suggests, lack of proper accountability and measurement resulted in this medium being one of the worst hit amidst the slowdown. "One of the key takeaways from 2009 has been revaluation of properties and rationalisation of tender bids," he says.

Indrajit Sen, President - Projects, Laqshya Media, on his turn says that overall revenues went down by about 30 per cent to about 2007 levels, which he estimates to be around Rs 1,400 crore. (The Pitch-Madison Media Ad Outlook 2008 indicates the same to be Rs 1,275 crore though.) With the exception of mid-size hoardings, which did fairly well, large size hoardings in 2009 largely went vacant. According to Noomi Mehta, Managing Director, Selvel Vantage Group, the smallest format, lamp-post kiosks too did badly, due to the large numbers required to make an impact. "Across the industry, sales dipped between 40 per cent and 20 per cent ," he says.

That exit costs for the industry players are high, did not help matters. Also since the license fee is fixed, beyond a point, it was not possible for an outdoor agency to cut costs. Therefore, it was all the more important that overall valuation of properties must be reasonable. Industry players suggest that as banks charge around 12 to 13 per cent interest on loans for biddings, the returns obviously should be higher at around 18 to 20 per cent.

However, all are not unhappy. Erosion in pricing may have acted as an advantage to some. Ishan Raina, CEO, OOH Media, says, "Erosion in pricing has resulted in leaders in each category getting stronger at the cost of weaker and smaller player. Clients have got excellent value from all media in 2009."

Apart from that there have not been any major movements in the outdoor industry last year. According to Sen, no new formats and no major new contracts or tenders saw the light of the day. "Nothing especially new has been seen in any of the top 10 cities," he says. Mumbai and Delhi street furniture contracts remained on paper only and the tenders that could have made the difference - Delhi domestic airport's Terminal 3 and Mumbai's Terminal 1C - didn't move beyond the evaluation stages.

The gloom fades gradually

The turning point, for the outdoor industry, according to Hemrajani, was the period of general elections in April and May 2009, after which the situation began to look up. According to estimates, the general elections pumped approximately Rs 350 crore into the ad industry, which came as a welcome relief after a dry first quarter. The industry's perspective on a tough-to-handle year has been one of caution and measured optimism. Optimisation of spends was the priority on the minds of business managers. Efficient and cost effective use of smaller formats like BQS and transit media saw wider acceptance with advertisers, mainly because of their reach and frequency. Players like Big Street, focussed on investing in low-risk inventories like Haryana Roadways (HR), DMRC (Delhi Metro Rail Corporation) Line-2 structures, cantilevers and gantries in Hyderabad and the Mumbai street furniture project.

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