After registering a 20 per cent de-growth in 2009, the outlook for the outdoor industry looks relatively optimistic. According to the Pitch-Madison Media Ad Outlook 2010, outdoor will grow by 15 per cent, thereby clocking around Rs 1,305 crore this year. But in terms of actual contribution to the national ad revenue, the projected growth is 6.2 per cent as compared to last year’s rate of 6.1 per cent.
The 15 per cent growth however, is on a reduced base of Rs 1,135 crore. In absolute numbers therefore, the projected growth does not even come up to the 2008 levels, when it earned Rs 1,419 crore in advertising. But keeping in mind the severe hit it took in the last quarter of 2008 and the first half of 2009, the picture looks cheerful.
“I believe 2010 – 2011 will be the year of outdoor. The harsh lessons learnt in the past two years will stand the industry in good stead, as it will be forced to review its official tenders and balance its sorry ambitions. It will be a time to recoup losses, but significantly better than the previous year,” says Noomi Mehta, Managing Director, Selvel Vantage Group. Mehta predicts that outdoor advertising will grow between Rs 200 to 300 crore in the next 12 months.
The lessons for the outdoor industry, as Mehta mentions, have indeed been hard. With Mumbai, the financial capital of India and a key location for outdoor advertising, being severely hit post October 2008, the industry saw a steep fall from the red-hot growth of 28 per cent and 11 per cent in 2007 and 2008 respectively.
The industry perspective for 2010 is much more optimistic though. Indrajit Sen, President – Projects, Laqshay Media, affirms, “Industry turnover can be safely expected to hit about Rs 1,700 – 1,800 crore again, that is, to 2007–08 pre-downturn levels – with sustained high occupancy levels and rising selling rates.”
Campaigns, which had become shorter in the last twelve months, are expected to be long term in nature. For instance, some companies such as Tata Tea, rely heavily on outdoor to take their message to the masses. Outdoor stands next only to television in Tata Tea’s media mix for its Jaago Re campaign.
The digital OOH players like OOH Media and LiveMedia too are hopeful that this year will be good for them. “We expect to double our ad revenues in the next 12 months. Our medium is designed to be more focused in terms of reaching out to key audiences and hence the wastage for an advertiser is far less compared to any other medium,” iterates Ishaan Raina, Chief Executive Officer, OOH Media.
Rajan Mehta, Founder and CEO, LiveMedia, too expects outdoor, and especially digital OOH to climb a few steps up the ladder of priority for marketers in 2010. “The industry is coming out of the gloom. I believe spends on outdoor will increase because people are in a growth mood,” he adds.
There are several avenues which could drive the growth for outdoor advertising as the macroeconomic and business sentiments improve. As Sunder Hemarajani, Managing Director, Times OOH, says, “Advertising in India is known to follow the GDP growth rate. Hence ad spend is expected to go up this year.” Secondly, a lot of advertising will be activity led – such as those leading up to Commonwealth Games in Delhi. The IPL too is expected to provide a boost to outdoor advertising, among others.
Probably the most important feature that will contribute the most to the sustained success of this industry is the Indian Outdoor Survey (IOS). IOS, the audience measurement system for outdoor media in India, has been launched by Media Research User’s Council (MRUC), a non-profit body that conducts print readership research in India. It comes as a planning software that provides details on 4,500 outdoor sites in 1,000 road stretches in Mumbai based on its research. “In 2010, MRUC needs to publish IOS final for Mumbai, Pune and at least three other cities and initiate field work in three more,” says Indrajit Sen, President – Projects, Laqshya Media.
Another important development that will significantly affect the outdoor scenario is new concessionaires for Mumbai and Delhi airports, which are expected to radically change standards of airport advertising in India and raise the bar to global standards. The AAI (Airports Authority of India) is expected to announce new tenders at Kolkata and Chennai airports. “Altogether, the airport advertising scene is expected to radically change, starting 2010,” expects Sen.
Laqshya Media holds the advertising rights on media and marketing properties at the GMR Hyderabad International Airport and is realigning the media properties there to ensure a higher audience engagement for the brands advertised. The realignment of the media unit is an effort to draw the attention of the right people at the right time.
The opportunities and avenues for driving up ad revenues in 2010 clearly lies in “the ability to customise and clustermise (using specific clusters to address audiences in a relevant and conceptual manner) a brand’s messaging,” opines Raina. “Many clients have used us in this manner and have seen results. We are creating more and more such opportunities and have seen renewed interest from clients for this approach,” he adds.
Also, crucial to the success of outdoor advertising is that it adds many more clients and categories (e.g. healthcare) to the basket, feels Raina. Presently OOH Media has over 300 clients across categories, that is, automobiles, finance, telecom, retail (luxury, apparels etc), media and entertainment, FMCG, consumer durables, travel and tourism, education etc. “The industry is still emerging and there is immense scope for new clients, categories and growth. FMCG was a late starter but is now increasing rapidly; healthcare has also started advertising with us,” explains Raina.
Finally, experts surmise that 2010 is very likely to see a perceptible shift to displays in smaller and upcountry markets as opposed to a total focus on the top 20 markets only. Currently almost 90 per cent of advertising comes from the top 20 towns. These markets were being used earlier too – but the difference this time will apparently be both in volumes and the quality of displays and overall service expectations from clients.
One of the concerns of 2009 was the very low occupancy levels, which saw desperate measures being taken by individual media owners to shore up occupancy – mostly through very high discounts and price led responses. This resulted in huge value loss for the industry and created large expectations of continued extremely low selling rates from customers. “This is one lesson that the industry should have learnt well and that should lead to some consolidation in 2010 that sees at least pooling of resources by like-minded companies to present a much stronger capability to the market and restore industry valuation to 2008 levels or higher,” is Sen’s hope for 2010.