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20% hike in licence fees by BMC is illogical: Rajiv Saxena

25-February-2014
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20% hike in licence fees by BMC is illogical: Rajiv Saxena

Rajiv Saxena, MD of Mumbai-based outdoor advertising agency Blue Ocean Media, talks to exchange4media about concerns over the increase in licensing rates by local municipal bodies, the want for better legislation and the need for OOH agencies to start coming up with innovative, out-of-the-box ideas and solutions.

What are your thoughts on the recent increase in license fees by the BMC?
I don’t understand it. For a city, OOH advertising generates revenue without much expenditure, but the Government keeps increasing the licensing fees. They just increased it by 20 per cent. Does the Government understand the OOH business? It is very difficult for us to even make 20 per cent, and now BMC is increasing the licence fees by 20 per cent. There have been so many policies introduced by municipal corporations in terms of benchmarking, visibility, standardisation of sizes, etc., but none of them have been implemented. Probably, this is their way of regulating the sector by raising the cost. It still seems illogical.

Do you think outdoor advertising has become more at par with other media in terms of creativity?
Yes, from the perspective of creativity, the industry has definitely improved. The colour schemes, communication, etc., are much better and uncluttered.

Radio operators provide creative support to brands for their campaigns. Could OOH agencies also play this role?
Larger agencies might do this, but most of the OOH players are not able to. Designing creatives is a highly specialised job and it is best to leave it to creative agencies. Radio campaigns have elements such as voice-overs and music, which can be developed in-house due to the facilities and talent already available with the station. It is easier for them to create synergy. Outdoor agencies are more like campaign executioners.

How do you determine the effectiveness of your campaigns?
Measurement is a challenge in outdoor advertising. Luckily, the medium is all about locations, so the client already has a perceived opinion and an idea of a certain number of people who will be passing through a given location. For instance, one knows that in a location like Link Road, at least 5-10 lakh cars pass by during the day. We can thus extrapolate as to how many potential eyeballs your advertising can receive. It is all about perceived data points.

How important are non-urban or rural geographies for the OOH sector?
With so much development in terms of connectivity, all brands want to reach out to potential customers in rural regions. While the rural market is still fragmented, activations, in terms of road shows or product showcases, are growing exponentially. Most metros are saturated as markets for brands, but there is still potential to grow in rural areas, especially for FMCG and banking sectors.

What are your views on digital OOH?
The Government will have to leverage digital OOH sooner or later since it is already being done across the world. Even with all the negativity around the OOH sector (fragmentation, lack of common currency, etc.) the future can only get better. Right now, there are a lot of laws preventing digital OOH from being widely used. Once consolidation of the industry happens, things will improve. Digitalisation will also establish credibility and create an avenue for measurement. One location (inventory) could probably be available for multiple advertisers at different times of the day. It will definitely be a game changer.

What is the need of the hour for OOH agencies?
Traditional OOH is becoming more expensive every day. Growth opportunities are getting narrower. The industry needs to think outside the box. It needs to come out with new avenues that will lead to exponential growth. Digital OOH is a must, but we require support from the government. Even when it comes to ambient media such as malls, not a lot of new properties are coming up. The old properties are already established and expensive, but even they can’t keep increasing their prices. Revenue growth will only happen through new infrastructure projects such as the Metro and new airports. However, the tender process makes it too expensive for all agencies to participate. What we need is the development of new media within the OOH sector.

Rajiv Saxena is a member of the Advisory Panel for exchange4media’s OOH Awards & Conference 2014. The fourth edition of the annual property will be held in Gurgaon on March 20, 2014. The Awards will recognise and reward exceptional work in OOH advertising and digital signage. For more details, please visit http://www.exchange4media.com/ooh2014/register.aspx

 

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