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Crystal ball gazing on the future of OOH industry

Crystal ball gazing on the future of OOH industry

Author | Pallavi Goorha Kashyup | Friday, May 28,2010 8:43 AM

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Crystal ball gazing on the future of OOH industry

While industry experts can’t stop gushing about how out-of-home advertising has become an integral part of a brand’s communication plans and how much the media can be tapped to grab eyeballs of people increasingly spending their time outdoors, what exactly is the potential of this medium? What are the new trends emerging? exchange4media speaks with industry experts to get a better understanding of the OOH medium.

Upbeat outlook

Commenting on the opportunities, Nabendu Bhattacharya, Founder, Milestone Brandcomm, said, “Traveling, dining, shopping – people are spending more time out of home than ever before. Brands are looking to connect and engage with consumers more and more and to be on top of the mind of consumers. Modern airports like the ones in Hyderabad, Bangalore and Delhi and Metro rail as transit mediums are gaining prominence as the audience gets uninterrupted time. Hence, the relevance of the medium is becoming stronger – malls-multiplexes provide scope for large-format visibility while consumers are shopping and on the move. Road mediums, too, are looking better than ever before with the introduction of international standard bus queues, billboards and street furniture.”

On some of the latest developments in the industry, Bhattacharya added, “2010 started with positive sentiments. The economy is looking better and it bodes well for the outdoor industry as well. Telecom, financials and media entertainment have filled in each and every outdoor canvas. And this trend will continue for the coming days. The outdoor association is coming together to create regulations and guidelines for the industry. All in all, OOH is evolving on all fronts on a positive note. Advertisers are realizing the renewed importance of the most beautiful and important canvas in the world and they are hugely depending on the medium.”

Giving his take on some of the interesting developments in the recent past, Mukesh Gupta, Managing Director, Graphisads, said, “Media buying and packaging have become more judicious. It is turning into a numbers game, thus, in the near future, consolidation in the industry looks inevitable.”

He further said, “Clients have been very supportive of quality media, which is aesthetically built and not really a clutter. Yes, cluttered media is still there, but going by the trends, clients have started to favour good media, like street furniture, etc.”

Cautioning about some pitfalls, Gupta said, “One disturbing trend still being followed is that of cut-copy-paste of creatives of other media into outdoor media. OOH is different, and we need to understand that. Wherever clients have tried to be innovative, the response has been stupendous. Doing OOH just for formality’s sake is a wastage of resources. There’s a lot to be explored in this media.”

A growth story

According to Gour Gupta, COO, Platinum India, “The OOH industry growth rate is pegged at 8-10 per cent YOY over the next five years (it is currently worth Rs 1,600 core and expected to be around Rs 2,650 crore by 2015). However, the nature of the business is expected to change significantly over the next 7-10 years.”

He observed that there were five key trends that were emerging. First was the emergence of transit media and street furniture in a big way, which was expected to mirror international trends where street furniture and transit accounted for 30-40 per cent of the spends. Next was the improving infrastructure and public and private transport service in Indian metros, which had led to fantastic branding opportunities by way of airports, radio cabs, subways, Metro rail, highways, toll bridges, bus queue shelters, buses, and trains, among others.

Gour further said, “CSR type branding opportunities will emerge in key metros, where the objective will be to provide public convenience and to monetise the same through advertising opportunities. The the recent city beautification schemes in Mumbai and Delhi in light of the Commonwealth Games in October 2010 are sure to be big draws and opportunities such as these will entice many a corporate to associate their brands with. Public conveniences, information kiosks, street benches, parking bays, sun shades, promenades, water dispensers, garbage bins and other utilities will form a part of these projects.”

Meanwhile, though newer technology is revolutionising the OOH industry, traditional outdoor advertising will continue, but in a changed avatar and the campaigns will be of shorter duration of say 14-21 days.

Futurescape

LED branding opportunities are set to burgeon in the top five metros in the next five years. Non-traditional ambient formats will also emerge, though it will be some time before we get a true picture of their success rate. Digital OOH, grab handles, malls, parking lots, are just a few of the 100-odd types of ambient media that are expected to gain prominence. It goes without saying that only the fittest among these will survive.

These apart, the business will become semi-professionalised with clients having a better understanding of the media, agencies adding to the value chain and concessionaires beginning to consolidate even as newer and larger entrants, both Indian and foreign, will seek to create ‘monopolies’.

M Kumar, General Manager, Jagran Engage, sees two trends emerging. He said, “Every campaign being done now has a lot of focus on innovation. A lot of effort is being put towards bringing some method to all the madness. It is heartening to know that campaign duration needs to be for a minimum of 10 days. This trend is being cheered by all concerned.”

OOH TV

OOH TV, too, has been gaining currency in recent times. Commenting on the recent trends seen in this media, Ishan Raina, CEO, OOH Media, said, “OOH TV is completing three years and we are noticing some sharp trends emerging. The more we talk to SEC A and top 10 cities, the better are the results in terms of ad recall. The Neilson research that we had conducted on OOH metrics, involving a sample size of approximately 15,000 across eight cities, shows that the audience primarily belongs to SEC A, so this is logical, but actual experience also verifies this. Secondly, advertisers are willing to pay a premium for quality and quantity of audiences, but not willing to pay per screen. This again is logical, but in the initial phases of marketing, we would emphasise on the number of screens, which was the currency. As the market is maturing, the advertiser is realising that an audience of questionable value, for example in a small restaurant, cannot be compared to a high value screen, which has 5,000 quality audience footfalls a day.”

Continuing further, Raina said, “The third trend, which I am particularly happy about, is that clients who tried us initially are now repeating us regularly. However, the number of clients remains fewer than what the industry potential and needs are. We need to see more clients from the telecom, automobiles, financial services and FMCGs to get on to this medium. Still it is a good omen for the industry going forward. If we can have 100 advertisers as regular believers, then in the next 12-18 months, we will be a good shape as an industry. This belief is supported by research, which shows very high recall of ads due to our high frequency model, as well as internal feedback from the sales and dealer fraternity of clients. I think these have been our key learnings in the last six months.”

The industry is upbeat, the clients are more than willing, the audience is receptive – with so much going for the OOH industry, the growth story will continue. However, what most of the industry players didn’t touch upon are the tough regulations and still a large swath of unorganised sector within the industry. Moreover, the industry needs to further strengthen itself so that another global slowdown doesn’t topple it as was seen last year and we get to stare at more and more blank hoardings.

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