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Outdoor may see double-digit growth in 2021, expect industry leaders

Plagued by poor revenue and arbitrary curbs by local authorities, media players seek tax relief and uniform guidelines to deal with the uncertainties. The sector is likely to grow by 14% this year

After earning dismal revenues last year due to the Covid-induced lockdown, the outdoor advertising industry has pinned its hopes on the vaccine rollout for a revival. The media players are expecting the demand to pick up by at least the second half of this year. However, they are also looking forward to some government intervention in the industry. 

Praveen Vadhera

“Overall, as far as the industry is concerned, we are not really expecting growth. It would be a great achievement to even achieve the 2019 levels. There are some sectors in some categories that are spending heavily on outdoor, like automobiles and OTT. Apart from them, I don't see too much happening in the industry, at least not in the first half of the year. We expect a certain amount of spike in the second half, but it also depends on how the vaccine rolls out and on the economic conditions. I think it would take at least another year before we are able to grow back to the 2019 levels,” said Praveen Vadhera, Head, Publicis In-Motion. 

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Times OOH also expects the demand to be near the pre-Covid levels by the end of 2021. They believe the vaccine rollout and the unlock guidelines related to travel, leisure, and work coupled with the pent-up demand will play a role in this. 

Aman Nanda

“Brands are already planning for these and budgeting for an increase in OOH advertising into their 2021 marketing plans. It is still very difficult to predict exact growth numbers given the uncertainties around, but we expect a solid turnaround by the second half of 2021,” said Aman Nanda, Chief Strategy Officer, Times OOH. 

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Anjum Tanwar

However, some players in the industry are optimistic about growth. “As per industry experts and the upward trends that we have seen in the last 90 days, it seems that OOH advertising is expected to grow at 14% in 2021 in India. The demand seems to be picking up pace post-Diwali. We expect normalcy in demand by mid of April 2021,” said Anjum Tanwar, Senior Vice-President, Brandscope India.

Asit Shah

Asit Shah, Partner, HET Graphics, and President, Gujarat Outdoor Advertisers Association, said, “The future for outdoor is really good. Since the value of print is declining, we think the print spending will now come to outdoor. I think after the Covid effect wears out, in another two to three quarters, we will be the only industry to have double-digit growth. We are expecting almost 25-50% growth.”

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With the Covid-induced lockdown forcing everyone indoors, the industry experienced a terrible hit. As airports, malls, cinemas shut and people began working from home, the outdoor advertising industry registered almost zero revenue.

In April, the Indian Outdoor Advertising Association (IOAA) had also sought financial relief from the government. They had mentioned that the industry could see a drop in revenue to the extent of almost Rs 2,500 crore this financial year.

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Dipankar Sanyal, CEO at Platinum Communications, also feels it is time the government steps in. “No other medium has taken the kind of hit that the outdoor medium has taken. For almost two-and-a-half months, it was a complete lockdown and even after that only 15-20% of advertisers were coming to outdoor. This was nothing when compared to the media owners’ expenditures. So government help would definitely make it better. If possible we should get relief from the levy of taxes,” he said. 

Vadhera suggests that the government should devise uniform guidelines for the industry. Currently, each organisation has different rules for outdoor advertising. For example in a city like Mumbai, the Railways, the Brihanmumbai Municipal Corporation (BMC) and the Mumbai Metro One Pvt. Ltd. (MMOPL) have different guidelines for their properties. 

“Though this is a huge revenue earner for the government there are no state guidelines because each individual medium is controlled by a different organisation. There are no overall guidelines to govern the industry and that's also the reason why the industry does not work in a straightforward, transparent manner. They are driven by tactical needs. So if BMC suddenly realises that oversized hoardings are impacting traffic, then without any research they take out an order. As one of the key businesses that generate revenue for the government, they should really help the outdoor industry. But I doubt if it will happen because it is still low on the list of priorities,” he said.

Vadhera suggests that the industry self-regulate itself to avoid arbitrary curbs placed by local authorities on outdoor advertising. 

“The regulation and the curbs are not driven by the government themselves. They wake up when the courts come down on them, saying it needs to be regulated. We need to come up with a set of self-regulatory guidelines rather than allowing the government to do it as they do not understand the sector. Though the government earns revenue from this, it is not substantial in the larger picture and so they are not really interested in giving a structure to this industry,” he said. 

The pandemic has also forced the industry to provide their services at a heavily discounted rate. Though 60% of Het Graphics’ inventory has been booked, they have had to provide at least a 35-40% discount. “Outdoor advertising is a perishable good. If we can’t carry an ad on the hoarding today, then the money is gone because we anyway have to pay the authorities. Also if one or two of our competitors are giving discounts, then all of us have to give. Since we don't have much demand we have no option,” said Shah. 

Atul Shrivastava

Atul Shrivastava, CEO, Laqshya Media Pvt. Ltd., also speaks of unreasonable discounting due to the desperation of OOH agencies. “They don’t have any differentiator, except rate, nor the strength to hold back. As a result, it is a price war at the cost of the campaign quality. Clients are unable to realise this and instead of using media to support the brand, they end up with the satisfaction of heavy discounts. The objective should be brand visibility and brand building, not the discount,” he said. 

With people staying at home for most part of the year, the outdoor industry found alternatives to stay relevant—they brought the advertising closer to the audience’s home. 

Vishnu Telang

“We have even started advertising in apartment areas. We haven't gone deep into it but it is part of the hyper-local advertising opportunity. A few months back due to Covid, people were very scared to go out. So we looked at options of going nearer to the people through society activations and other opportunities like digital signages and gate branding. It all comes really close to the target group that the brand wants to integrate,” said Vishnu Telang, CEO, Khushi Advertising Ideas Pvt. Ltd. 

Platinum Communication’s Sanyal affirms this shift. “Last year we saw a higher movement of traffic towards the residential areas because of the lockdown. As unlocking happened, we saw there was a slight shift as slowly people moved to other touchpoints. But residential areas remained the major point where we saw the highest amount of traffic. So we made plans for our clients based on those mobility data,” he said. 

Another notable trend is a shift to smaller cities. Khushi Advertising is witnessing growth in tier 2 and tier 3 cities as brands have now begun to ‘unmetro’. “We see a lot of opportunities in these cities. Non-metro cities are definitely going to grow,” said Telang.  

A similar trend has been observed by Platinum Communications as well. “During the pandemic, we have seen that the smaller towns, tier 2 and tier 3 cities, have done really well. So a lot of our campaigns like Campus Shoes and Dollars have happened in the smaller towns,” said Sanyal. 

Digital out-of-home (DOOH) is set to become a major part of the outdoor media mix in the coming year. “DOOH provides flexibility to add data feeds, video, and developing programmatic capabilities to the mix, making it an unbeatable offering. It has an immense technological opportunity to scale up. It contributes to almost 30% of OOH revenues worldwide. Under these circumstances, advertisers who continue to reinvent themselves will likely succeed in subsequent years. Digital OOH and pragmatic OOH will be the flavour of the new OOH advertising,” said Nanda. 

Shrivastava said, “DOOH is growing in India, though a bit slowly, but we’ll definitely see more number of DOOH units in the year to come. It might penetrate into traditional OOH formats apart from ambient, where it is already on the increase.”

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