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Guest Column: OOH sees short-term pain as sectors skew ad spends to digital, print & TV: Atul Shrivastava, Laqshya Media

29-December-2016
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Guest Column: OOH sees short-term pain as sectors skew ad spends to digital, print & TV: Atul Shrivastava, Laqshya Media

As the year 2016 draws to a close, Atul Shrivastava, Group CEO of Laqshya Media Group shares key highlights and trends witnessed in the Out-of-home space this year.

2016 for Out-of-home advertising was a pretty good year with some consistent and serious spending seen from January to October 2016. Though heavy spending sectors of 2015 like ecommerce and real estate were comparatively not very active on outdoors, what changed the scenario were mobile handsets and automobile sectors that were seen heavily relying on OOH for their brand campaigns.

Mobile handsets and automobiles were seen advertising on all formats including traditional, ambient & airport.

Some noticeable trends observed on outdoors were:

Audience led selling - Audience Measurement & ROI are the new language in the OOH Industry. Though the Out of Home Association was not successful in launching a universal measurement but individual agencies have realized the importance of supporting metrics with outdoor plan and are providing clients with strategy backed data that is insights and data rich.

Digital Growth - Though Digital is still in a very nascent stage of development, they are slowly becoming part of every media owners long term bet. Digital out-of-home (DOOH) will continue to develop at pace in the months to come as their ability to sync advertising across multiple channels will be the biggest driver.

Innovation shift from Media formats to Strategy – 2016 was all about innovations that were expected to be strategy-led instead of media formats, where the marketers chose advertising on outdoors using some strategy in hand as compared to the media format innovations visible throughout 2015. The age old jut-outs and cut-outs are no longer alluring the marketers these days.

Usage Trend of Street Furniture - A lot of Billboard and large sized media preferred sectors like Real Estate and Automobile were seen using Street Furniture like Bus Shelters in their media plan which was typically reserved as fillers in their plan. That reduces the typical heavy skew towards Billboards which is a trend picked up in 2016.

Accelerating growth in Tier 2 and Tier 3 towns - Until recently it was thought that the online retail business wouldn’t have much support outside Tier-I cities. But there are as many as 3,133 Tier-II and III cities, and 1,233 rural hubs that are getting onto the online retail bandwagon, and brands are realizing the need to penetrate and be visible to these chunk. We have seen media planning shifting to Tier 2 and Tier 3 towns and ecommerce retail has been riding this new wave.

The ecommerce sector is sustaining their long term outdoor plans in top metros whereas they are penetrating in small towns with brand awareness campaigns.

Luxury brands are believing in the power of OOH - The Luxury market is currently waking up to the opportunities of using Outdoors as opposed to the image of OOH perceived to have always catered to mass. The demand of OOH medium is increasing due to their tremendous capacity of influencing target audiences as luxury brands are not just selling the product but aspirations and dreams too.

The overall optimism from the start of the year was strong since 2015 was the best year for ad spends we’ve had in the last five years which was heavily driven by ecommerce. The expectations from e commerce and government sectors were high and we also expected Telecom to ramp up them spends as all the players were rolling out their 4G services but India’s start up ecosystem slowed down their advertising in 2016 and brands were cautiously spending on their sustenance, which definitely had an adverse impact on our expected growth.

Mobile handsets and Automobile kept holding the growth phase and the Industry again got a hit by the recent demonetisation. Though we all appreciate and expect the economy to improve and have a positive influence but, this short-term impact would definitely extend to a quarter. The October-December period is typically the highest advertised quarter and, the uncertainty is definitely costing us.

Several sectors like FMCG, durables, auto, real estate, jewellery, etc., have been majorly impacted for diverse reasons. Real estate and jewellery sectors have been impacted because they tend to deal more in cash. For FMCGs, the impact is due to heavy cash crunch.  Though some sectors have gone all out on advertising like e-wallets, their spends are heavily skewed towards other traditional medium like Print, TV and on digital. So there will be short-term pain which the industry as a whole would have to withstand.

Ad spending in India is on a steady growth curve and is likely to stay that way in 2017 though the gloomy period would take up the start of the year leading to some contraction in ad spends but, we expect 2017 to see increased ad spending by categories such as mobile wallets, telecom 4G, banking, financial services and insurance (BFSI), mobile handsets, fast moving consumer goods (FMCG) and consumer durables. State Elections in Punjab & Uttar Pradesh would be another event that would add to the growth.

(The author is Group CEO, Laqshya Media Group)

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com

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