The year 2011 has not been a very good one for the Outdoor medium. Blank hoardings and billboards have been seen more often than before and hence it was no surprise when the ‘Pitch Madison Media Advertising Outlook 2012’ showed a 10 per cent fall in the medium’s overall revenues in 2011. The medium’s revenues in 2011 stood at Rs 1,297 crore as against Rs 1,441 crore in 2010. Outdoor’s share in the total ad pie has also fallen to 5.1 per cent in 2011. In 2010, the share of the medium was at 6.1 per cent.
Noomi Mehta, Chairman and Managing Director of Selvel One Group and Chairman, Indian Outdoor Advertising Association (IOAA) agrees that 2011 has been a damp year for Outdoor. He says, “Tightening of belts and cost cutting was the order of the day. No significant new investments have been there barring T3 airport in Delhi. Revenue is down 10 per cent for our company and across the outdoor media landscape it is down by possibly 20 per cent.”
Indrajit Sen, Executive Director, IOAA is more optimistic. He says,“We are sure that there has not been any “degrowth”. Opinions in the Outdoor industry about the growth or degrowth is based on kind of categories being handled. For example, for the agency that handles telecom brands mainly, it’s not been a good year. But, if the agency had automobiles and M&E brands, they would have been happy! Similarly, agencies with major dependence on consumer durables would be very unhappy.”
According to experts, occupancy levels of the medium were down by 25-30 per cent over the past 12 months. No increase in rates, has been another reason for the slowing down of the sector. Interestingly, there has been a rise in spends in Tier II and III locations, while metros and Tier I cities have seen a reduction.
The first half of 2011 was really bad for the Outdoor medium, however, it took some pace in the second half of the year.
Where’s the scale?
Pawan Bansal, COO, Jagran Engage, points out, “Economic growth for the past year has slowed down directly impacting advertising in general. OOH also suffers on the priority list as there is no way ROI can be measured.”
Experts feel that absence of a measurement metrics for OOH makes many evolved categories shy away from outdoor. Abhijit Sengupta, CEO, Outdoor Advertising Professionals (OAP) agrees, “For instance in UK, FMCG is a big user, while in India they are not. And the primary reason being the advertiser is not able to get ROI, or at least a currency where it can be compared to other media.”
In 2011, media & entertainment, automobiles, FMCG, & travel & tourism were the largest categories spending on Outdoor. Of these, media & entertainment was the biggest spender on the medium. Telecom, consumer durables and BFSI were the sectors that dropped their spending on Outdoor. Mandeep Malhotra, President & Head, Mudra Max, agrees, “We saw our telecom clients drop spends by as much as 70 per cent. Normally, one of the biggest spending categories, their withdrawal from the media for some periods was a cause for concern. However, there were lessons we learnt from these and our client portfolio this year is certainly much more diversified.”
Sunder Hemrajani, MD, Times OOH feels, “These industries are most affected by the debt crisis in Europe, a struggling US economy and dampened consumer sentiments in the domestic market led by high inflation and rising interest rates. A deeper analysis reveals that pressure on margins has made advertisers cut back, chiefly on media where quantitatively measuring ROI is difficult, hence radio and out of home have taken a bigger hit, as compared to TV or Print.” Some categories, which were heavy on print are increasing their OOH media exposure like educational institutes, jewellery & lifestyle products, real estate, events & exhibitions etc. OAP’s Sengupta shares an interesting insight here, “Real estate is betting on OOH in a big way, but I doubt how many agencies handle it. Mostly, they take up sites directly from the media owners.”
There are a lot of product categories / brands which have been fence sitters and provide ample opportunity to the OOH industry for conversion. Experts feel that the factors hindering the growth are lack of the perceived transparency &accountability; measurability in terms of OTS and ROI; standardisation; customisation and quality deliveries on a sustained basis in the OOH sphere.
As far as contribution is concerned, national advertisers still dominate the Outdoor medium on an overall basis with a share of about 60-65 per cent. However, the scenario varies in metros and small cities. In top metros’ the share of national advertisers on Outdoor is as high as 75 per cent. While in mini metros and small cities it goes down to 40-50 per cent.
Gautam Chadha, Managing Director, Broadview Mediacom, shares two interesting trends that are emerging: one, the local advertisers, realising the need to reach out to consumers amidst increasing competition and consumer consciousness, are more inclined towards spending in local, regional and even national media to build equity for their brand. This obviously benefits the omniscient OOH industry in terms of increased spends from local advertisers.
“The second trend which is quite noticeable is that of the national advertisers increasingly tapping the Tier II and III markets to capitalise on the increasing consumer awareness and purchasing power at the regional level as also to beef up their bottom lines from this avenue, keeping in mind the saturation levels and competition they face in the larger metros and Tier I markets”, he adds. This aids the spread, reach, infrastructure and efficacy of the OOH media and the players involved at a local and regional level.
Another noticeable trend was that spends increased significantly in malls (facades) and airports. As air passenger traffic grew in India, airport spends also shot up giving some boost to the Outdoor industry. T3 Airport in New Delhi got a lot of attention from advertisers on the outdoor front. All new car launches had actual car displays at the airports and few key malls.
Regulations: Will spurt growth
Speaking of trends, experts feel one key thing that was prominent in 2011 was self regulation in Outdoor. Prompted by the change in government policies at the start of the financial year, it nonetheless aided in crystallising consensus amongst the industry on the criticality of self-regulation and the urgent formalisation of pan India industry Standard Operating Procedures (SOPs). Various bodies including IOAA renewed the efforts to bring concerned players to the table towards this end, leading to the framing and circulation of the SOPs to all stakeholders.
Broadcom’s Chadha says, “While nitty gritties on procedures, governance, enforcement, audit and review remain to be sorted out, nonetheless this impetus in 2011 will go a long way inculcating the trust of advertisers and other stakeholders and thereby, their much greater participation and spends in the OOH medium.”
Digital: The way ahead?
Digital OOH is in its very early stages in the country. It holds the important position of being the cutting edge technological breakthrough, however, its contribution in the OOH pie is very low. According to industry experts it accounts for hardly 2-5 per cent of the total OOH pie. Jagran Engage’s Bansal feels, “Digital OOH at best can only supplement them. As a standalone driver, it seems very unlikely. Digital OOH in our view is a misnomer as it is still ‘inside’ residential complexes or business complexes.”
Alok Jalan, MD, Laqshya Media feels, “Digital OOH is still a very small part of the OOH Media but since everything is going digital & it has its own advantage, going forward we will see more and more digital happening in controlled environments like malls and airports.”
However Ishan Raina, CEO & MD, OOH Media, seems more optimistic about digital OOH. He feels that OOH TV being an SEC ‘A’ focused medium, adds dynamism to the existing media plan of the clients for their brands. He feels, “There is growth of digital OOH in India, as it is clearly a targeted, high frequency, high impact medium; thereby ensuring a very high recall. Digital OOH advertising is emerging as an integral part of the media mix for advertisers.”
It’s also national brands who are experimenting more with digital OOH, while local players stick to the traditional way. A lot of interesting formats like in-taxi digital advertising have also showed up in 2011… but these are all in a very nascent stage. En Route Media, a digital in-taxi entertainment and advertising has only national brands in its clientele. “I see the same ratio applying in the coming years in the traditional OOH,” says the company spokesperson.
The bottom line is that digital screens placed in captive environments can better bring across brand and product messages, while being more updated and calling the audience to action immediately.
No money, no innovation
As far as innovations in Outdoor are concerned, there has not been too much scope in 2010 with shrinking budgets. However, there is very less premium that agencies drive from innovation in this medium, unlike Print. OOH Media’s Raina says, “Innovation helps to increase the overall budget, as well as belief in the medium through excellent feedback.”