OOH is quickly moving to become a medium that advertisers are using strategically to deliver more. An increasing number of advertisers, who are looking at the best way to connect with the consumer outside home through various channels, are now demanding accountability, innovation and better quality.
Though the OOH industry was hit badly in second half of 2011, the most important change that has taken place is that the industry has now opened up to advertisers looking to adopt alternative avenues in the OOH space. While traditional OOH has a factor of uncertainty hovering around it, there are a few specialised segments that look bright on the chart.
Shopper marketing is here to stay
With the advent of shopper marketing, the prevailing go-to-market strategy has entered its next stage of evolution. Saatchi & Saatchi X, Publicis group's dedicated shopper marketing agency, was one of the early players who set up base in India in 2010. However, there was not much buzz in the space for the next one year.
With the retail sector mushrooming in the country, global agencies are strategising to set up specialised divisions for shopper marketing in India. TBWA formally announced early last month the launch of its promotional, retail and shopper marketing agency, Integer, in India. Just 20 days later, DDB Mudra Group announced the entry of TracyLocke, one of the leading shopper marketing agencies into India. Bob Jeffrey, Chairman and CEO, JWT Worldwide also recently mentioned that the agency would like to bring its shopper marketing cell to India very soon.
The scale on which the agencies are setting up shopper marketing divisions, one can safely say that the future of this sector is bright. One of the reasons why this form of OOH advertising will be an attraction is because of a clear measurability tool. Talking about this, Jim Sexton, Global Chief Marketing Officer, TracyLocke says, “In today’s digitally-fuelled, fragmented, ever-evolving marketplace, brands must reframe how they reach the target audience and drive revenue. It’s about meaningful engagement that produces measurable results. If you didn’t measure, it didn’t happen.”
While shopper marketing is a relatively new concept in India, industry experts believe it will soon become the dominant concept for in-store selling. Many manufacturers believe they are catching up because they have initiated shopper marketing programmes. For instance, Future Group, one of the largest retail networks in India, has offered its retail space for advertising across 40 Indian cities to cash in on 200 million consumers every year. The size of the business for the group has gone up to Rs 100 crore from this venture.
Also, opening up FDI in Indian retail will let foreign retailers own up to 51 per cent of supermarkets and 100 per cent of single-brand stores. This would create avenues for tremendous brand awareness and promotion in this space, taking OOH advertising to a greater scale and more sophistication. The industry looks at the largely unutilised space of the sector as an opportunity to penetrate and flourish.
Small towns to fuel growth
Currently, the Tier I towns account for more than half of the total OOH market, but this is expected to change going forward. The market will penetrate the Tier II space. Also, with local authorities and municipal corporations beginning to frame guidelines to regulate the sector, OOH is expected to get more organised over a period of time.
While urban markets will still lead spends, Tier II and Tier III cities will also drive higher revenues commensurate with consumption very soon. OOH is still a city-centric and local medium. But with increased infrastructure development activities in smaller towns, many industry players will focus more on them.
Another reason why OOH is expected to grow at a faster rate in these smaller cities and towns is the cost effectiveness factor. Local governments have started investing considerably in infrastructure projects and seeking private participation, and municipal bodies have also discovered value in making OOH companies invest in basic infrastructure development in lieu of media rights to those properties.
For example, the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) has recently invited requests from leading companies for development of modern Foot Over Bridges (FOBs), sky-walks and bus shelters in Industrial Area Local Authority centres in certain areas of Hyderabad on PPP (Public-Private Partnership) mode in lieu of advertisement and commercial rights. Successful bidders will be allowed to display advertisements on the exterior and interior space of the FOBs and bus shelters.
The scenario in the metros is different as regulators are still not the enablers of this industry. Changes are made in bits and pieces, but there has to be a unified code of conduct. There has to be a standard regulation across the country. Commenting in this context, Cherian Peter, Chief Sales and Marketing Officer, Muthoot Group believes, “OOH is still a cluttered space. What the industry needs to work on is to generate clutter-free ideas and think of unconventional avenues for clients.”
Digital OOH - The way ahead
Traditionally, digital signage in India started off by being nothing but a dynamic replacement of static billboards. Even though the sector has been around in India for more than six years now, its market size is nowhere near those of the US or China. Indian digital signage players do not typically disclose their billings, but analyst estimates see India's digital signage industry size somewhere between 1/8thand 1/10thof what it is in China today, and about 1/100th of what it is in the USA today. According to industry experts, it accounts for hardly 2-5 percent of the total OOH pie.
Hemanth Shah, President, Lintas Initiatives, thinks we will soon see the spread of digital OOH units. “They are already prominent at the transit hubs but would continue to expand into traditional spaces as well. I also see adoption of technology-led solutions picking up pace. We believe brands would always value connect with the right Target Group (TG) and not the media unit. Hence, as an agency, we propagate ideas that are media-agnostic and this year we can hear that resonate clear as a bell.”