Advertising to be engine of railways’ revenue growth

Advertising to be engine of railways’ revenue growth

Author | Source: The Economic Times | Thursday, Mar 23,2006 7:46 AM

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Advertising to be engine of railways’ revenue growth

This one goes out to all those of you who thought that the Indian Railways was a story of inordinate delays and boring journeys on those never-changing red-painted coaches. The railway coaches are set to become the new mobile ad hotspots of tomorrow.

The concept of turning the coaches into advertising billboards, expected to roll out shortly, has caught the fancy of advertisers from media to FMCG space - and this may turn out to be the moolah-spinner for railways if early indications are anything to go by. A practice in leading global markets, advertising on rail coaches and wagons is set to rewrite the revenue matrix of Indian Railways.

Consider this: railways has already bagged offers of Rs 5 crore annually from a leading media company to put up its logo in Rajdhani and Shatabdi trains. The railways would earn a minimum Rs 200 crore as advertisement revenue on this count alone. The total revenue earnings from advertisements for 2004-05 stood at a paltry Rs 55 crore.

“It could be a good advertising tool that could be instrumental in increasing product awareness, especially for FMCG industry and social responsibility advertising. However, it needs to be backed by thorough research too,” said Bharti Tele-Ventures senior vice-president (branding & communication) Vivek Bali.

The railways have issued tenders inviting advertisers to place their hoarding on wagon bodies. Ad rates for the wagons are expected to come at a discount as they are low on visibility. The railways have till now employed services of outdoor space sellers to market the station and platform ad space. Things may now change with the railways taking on a more hands-on direct approach where space would be sold directly to large advertisers.

Said media outdoor agency Kinetic (South Asia) managing director Pratap Bose, “The step will give fillip to the companies whose target audience is the railway-commuting crowd and, hopefully, they would use the opportunity to create some memorable out-of-home (OOH) innovations in the transit category. Transit advertising, particularly railway advertising, has always been a favourite with most OOH users worldwide.”

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