Chairman and Managing Director | 18 Aug 2010
Noomi Mehta is the Chairman and Managing Director of Selvel One Group. This group of companies owning and managing the largest share of outdoor advertizing in India, personally negotiated the first Private Equity placement in an outdoor advertising company. He also pioneered larger format digital printing and founded Laser Advertising Ltd. Apart from other feathers in the cap, he is also the chairman and director of Indian Outdoor Advertizing Association, a national body formed to represent Indian OOH companies.
The Selvel One Group was conceived over five decades ago, and has always embodied innovation. A large part of its success has been due to the group’s leaders looking to re-write the laws of the medium. The group was instrumental in pioneering computer-generated designing and computer-manipulation of images for outdoors.
"I believe that the OOH industry will ultimately be a three-way marriage. OOH will be present in the radio as well as the mobile phone arena. To put it simply, personlised messages can be sent by a digital desk. Many mediums that are successful are picking up a digital signature, which transfers the person automatically to our website. It can offer free downloads depending on the promotions the brand wants at that point of time...the sheer visible availability and usefulness of OOH will go well beyond the current scope of giving us static messages."
Q. Since the inception of Selvel Outdoor Advertizing, how has the journey been till now?
Selvel was started in 1945 as a partnership. But it really took of in the 60s. I joined this business in 1976 after finishing my CA. When I joined the total revenue of Selvel was around Rs. 50 Lakhs. Now Selvel is known as the Selvel Vantage Group, which has a turnover in access of Rs 200 Crores. Recently we have opened offices in Bangalore, Mumbai, Delhi and other cities. One of the notable achievements of our company is that it was the first outdoor company in India to have an equity placement. This was done by the Citigroup as they had an equity stake in the Selvel Vantage Group. Subsequently they wanted to enlarge their stake in the company and we refused stating that we were a privately held company and would want to remain that way. However, I did offer to take the company public so they could raise equity. They instead asked us to buy their stake in our company from them. It was a very unusual request but we did buy it back from Citigroup. We were the pioneers in bringing large format digital printing technology to India. The first virals were imported from Australia, and the machines we introduced in India were the viewtech machines, and for a few years we were the sole suppliers of this technology in India.
Q. What are the various OOH solutions that Selvel One provides?
We provide just about all the services. We, in fact, do hot air balloons as well. There is absolutely not a single aspect of advertizing that we have not touched. We have lately started OOH advertising on traffic signals and lamppost kiosks. We have ventured into digital in a very big way. In terms of LCD screens we have put 25 screens in Kolkata. And we are going to replicate those figures in other cities as well.
Q. What are the technological advances that OOH industry is witnessing today? What are the main trends?
I believe that the OOH industry will ultimately be a three-way marriage. OOH will be present in the radio as well as the mobile phone arena. To put it simply, personlised messages can be sent by a digital desk. Many mediums that are successful are picking up a digital signature, which transfers the person automatically to our website. It can offer free downloads depending on the promotions the brand wants at that point of time. I would also believe that radio will play a crucial role because each point of it can act like a transmitter point, and radio would be able to pick up specific messages that can be beamed from a particular location. It will give you a host of messages relevant to your current location. The sheer visible availability and usefulness of OOH will go well beyond the current scope of giving us static messages. OOH will definitely become more interactive in nature.
Q. What share of the advertizing budget is usually allocated to OOH? What will the scene be like five years from now?
This is hard to say for sure because there are companies whose products are best advertised by OOH advertising. And, on the other hand, there are companies who do not want to reach out to prospective consumers, who are on the move and rather choose traditional mediums like TV and print. If the content is localized then the company has to choose OOH and not a national medium like print. I see OOH as requiring a massive expenditure. To put a number on the investment required the minimum sum will be around Rs 3000 crores. And here I am just talking about taking advantage of the new opportunities. With such enormous investments the revenue opportunities will be enormous. For example airport advertizing must have swallowed up around Rs. 700 Crores in the last six years. The profits were equally remarkable. If these kinds of investments are made then I expect returns of in excess of Rs 5000 crores. My expectations are that it will grow much faster than its other advertizing counterparts and therefore will command a bigger share of the pie. This will be a combination of traditional as well as the new-age advertizing.
Q. What was the Selvel’s One Group’s revenue in 2009? What are the projected revenue figures for 2010? At what percentage will it grow over 2009?
Our own revenue was static. There was negligible reduction over 2008. However, the point to be noted is that Selvel One has a policy of reinvestment each year. Our entire surplus gets reinvested and there is no such thing as dividends and the likes. So the reinvestment that was made in the previous year did not bear fruit. The main reason was the slowdown of the economy. And the cities that faced the worst music were Mumbai and Delhi. Our own group will grow at about 20 per cent. But this is not the benchmark for the entire OOH industry, which will grow at a stable 7-8 per cent. The reason for this 7-8 per cent is because more than half the year has already gone by and cities like Mumbai are just beginning to pick up.
Q. Who are your competitors and what is your USP compared to them?
Last few years have thrown up two new forms of competition for Selvel One Group. First is the company that is heavily being invested and is called Laksya. Unfortunately their entry has been very poorly timed. There are external factors that one has no control over. The other company is a model company, JC Decaux, that has entered India. They are a very serious player and it is a closely held company. The good thing about a serious player is that they will not make reckless investments. There are other companies as well like there is a steel company that has recently ventured into OOH advertizing called Jindal. I do understand that they have taken on a substantial presence. Other than 2-3 serious players no company seems to be making money in Delhi.
Q. What are your views on digital’s role in OOH? What is its future in India?
Everything is digital… from printing to telephony to sound, LCD screens, etc. Digital obviously has a massive role to play in the community. If one talks about screens everywhere outdoor, then I would call it hot air. This was extremely successful in China, where a company called Focussed owned seventy thousand screens. The company was taken public with much fanfare but it has now has totally collapsed. I don’t think it can be replicated in India, and here it will be a complete flop. LCD screens will be successful in the future but for completely different reasons than for what they are being used now.