With the festive season on in full swing along with the ICC World Cup, the Out-of-Home (OOH) sector in India is witnessing a good growth. More and more categories are increasing their spends on the medium, raising hopes of full revival. exchange4media caught up with Ajay Mehta, MD – Cinema and OOH, GroupM India, to talk about the sector’s performance, festive trends, GroupM's OOH display for Sprite during the India-Pakistan clash, and more.

According to Mehta, the OOH sector is expected to increase by double digits in 2023 over the previous year. He is confident that this year, the sector will not only cross but will beat the 2019 levels. 

Edited Excerpts

How was the first half of 2023 for the OOH sector and how has H2 been so far?

The year 2022 was the revival year for the Out of Home (OOH) sector. We grew from the previous year. In 2023, H1 was decent, but now that we're four months into H2, it's looking significantly better than the H2 of last year.  Last year, from August onward, there was a slight slowdown in total ad spends. But this year, with Diwali coming late and the World Cup adding to the festivities, things are looking up. 

The ICC World Cup is an event that lends itself extremely well to OOH, and because of an increased supply of digital OOH, particularly in major areas such as Mumbai, we are seeing significant double-digit growth this year. 

Do you expect the industry to reach the pre-Covid levels this year?

It will not only cross, but will also beat the pre-Covid level, in my opinion. At GroupM, we are growing faster than the industry because of the wide portfolio of clients that we handle. We are way ahead of 2019 numbers.

Tell us about the new clients that you have added this year at GroupM's OOH arm? 

We have started working with a number of new clients this year. The additional businesses have played a critical role in our growth. I can't reveal the exact size, but what I can tell you is that there is a certain change in the market. Spendings by startups have been challenged, and yet if we are growing and the industry is growing, it is because we are bringing in new clients. The most important thing to note is that the entire growth of the industry is based on new clientele.

Which are the big categories spending on OOH this year?

OTT is one of the major categories that spends on OOH, and has continued to do so. It has always been an important sector for OOH. Another intriguing observation is that FMCG appears to have boosted its spending, whether it is on F&B brands or personal care. However, it is not a new trend for 2023; it has been happening for several years. 

While airports, the largest component of OOH, have made a strong comeback, jewellery as a sector has just exploded in terms ad spends on OOH. Another industry that spends on OOH is real estate. Now that the real estate sector has recovered, they have also returned to OOH. When it comes to OOH spending, these four-five categories are at the top of the list. 

Any category that has reduced OOH spending? 

Many new-age enterprises, D2C brands and social commerce brands have cut back on their spending. Not only startups, but also more evolved companies have curtailed spending, which can be ascribed to the funding winter and global conditions, particularly in the United States.

However, what is different is that many smaller Indian companies are also spending heavily. We have discovered that many owner-driven businesses, who may not be among the top 20-30 marketers, but are in the long tail, are spending significantly.

What kinds of OOH advertising demands do you see from clients during events like the ICC World Cup and festivities?

H2 this year has been very strong, led by triggers such as the ICC Cricket World Cup, Durga Puja and Diwali. We are seeing that clients just don't want the traditional OOH. They want anamorphic displays, integration with mobile, use of a lot more data and innovations. So off course, the traditional OOH is there but what we're seeing is that the adoption of innovations has just shot through the roof. This may be contextual due to the event around which the advertising is taking place.

Which categories are opting for anamorphic display? In terms of cost, how expensive is it as compared to the traditional OOH advertising?

At GroupM, we work with many categories and clients such as Coca Cola, Mondelez, VIP, IKEA and HSBC. All these categories and brands are choosing anamorphic displays. It's not restricted to a particular category. However, when it comes to innovations, FMCG brands are very keen. 

When it comes to anamorphic displays, there are two aspects to the cost. One is the production cost of the content of the anamorphic and then it's the media costs. If I were to just use normal digital output and play my normal commercial, or the normal creative, the media cost will remain the same. The only difference is in the production costs.  So, it can vary from single digit lakh to crore. It's really up to the brands what they want. It's really not much of an incremental cost, if you're doing a full-fledged ad campaign.

Can you tell us more about GroupM's recent India-Pakistan OOH show for Sprite in Bengaluru?

The whole ICC campaign has been done by us and that was a very high decibel campaign executed in a short period of time. It started with the key airports where maximum traffic is expected for the World Cup.

Meanwhile, the India-Pakistan match campaign was executed very interestingly. We had an anamorphic bit as well in the campaign along with augmented reality, which the audience could view through an AI app. It was created so that one could actually see one’s shower of ice cubes falling from the side as it went well with the entire theme of ‘thand rakh’. 

 Is the industry suffering because of the lack of third-party measurement?

The industry is attempting to come together in order to create a common currency. I believe there is a lot of discussion about it, but because it is a fragmented business, it takes some time to reach a consensus. Having said that, we at GroupM used a variety of measurements for our clients. We have a full suite of measurement solutions that essentially provide a lot of campaign data, and that is an extremely important part of our offers to our clients. While the sector is coming together, we haven't let that stop us from taking our own initiative in the space. 

 What kind of growth are you hoping for in H2?

According to us, this entire festive season, or if I look at OND (Oct-Nov-Dec) as a quarter, the growth will be in excess of 20%. It is likely to be around 20-23% as compared to last year. 

 What new trends can we anticipate in the coming year?

Due to a number of variables, 2024 will be an excellent year for the OOH market. The election is approaching, which indicates that the system's uncertainties will dissipate. As global geopolitics settle and it becomes evident that the United States will not enter a recession, funding winter will end. The entire startup ecosystem will begin to thrive again. Consumption is increasing, and premiumization has become a reality. 

On the supply side, we are seeing a lot of new out-of-home supply, as well as a lot of new digital OOH supply. Some key new touch points are emerging, such as digitization of residential advertising spaces and small developments in programmatic digital OOH.  People are more confident in PDOOH now, so we can play with larger digital budgets rather than the 2-3% increase in OOH expenses.