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The OOH industry needs to reinvent itself: Haresh Nayak

The OOH industry needs to reinvent itself: Haresh Nayak

Author | Abhinna Shreshtha | Friday, Feb 07,2014 8:42 AM

The OOH industry needs to reinvent itself: Haresh Nayak

Haresh Nayak, MD of Posterscope Group India is an industry veteran who has been leading Posterscope in India since its inception in 2008. He was voted as the ‘OOH Professional of the Year’ award at exchange4media’s annual OOH Conference And Awards 2011 by his peers in recognition of his dynamic leadership of Posterscope.

As the OOH industry heads into 2014, Nayak believes that there is a lot of work to be done for the industry to fulfil its potential. Read on to find out his thoughts on the various issues surrounding the current OOH industry and its future scope.

What do you believe is the next level of growth in the OOH industry?

The OOH medium has evolved in malls and multiplexes, whether it is pure display, engagement, or events. In the last few years, we have seen a number of malls coming up and fuelling its growth. Also, brands no longer want to just plaster their posters around the city. They want to engage the audience. That is why ambient media is where the growth is foreseen – coffee shops, salons, etc., where people are sitting and willing to engage. We have also seen growth in niche ambient environments, for example, cinema has grown by over 200 per cent.

What do you think about the rapid growth of transit media?
Transit media also includes infrastructure projects such as airports and metros. There is scale and scope, so transit media will definitely keep growing, but the volumes will be driven by ambient media. Because of lack of syndicated research, we don’t have a clear idea about how ambient media is doing. Data about transit media is easily available and captured; the same goes for outdoor spends. Right now there is no research that talks about the potential of ambient media, but as media planners we know where the money is going. It definitely has a lot of potential.

What about OOH’s share in the advertising pie?
The digital medium has already overtaken OOH. All mediums will suffer budget cuts because of it. The digital medium gives clients the opportunity of engagement as well as conversion. If we give the client a better quality site, bus shelter, etc.. then the consumer will be engaged. People spend 50-90 per cent of their time during the day out of home, so there is a huge opportunity, but we have to tap this opportunity. We have to show the client that we are a lucrative medium.

The digital medium is growing, but it will also reach a plateau. In the future, every medium will have to reinvent itself. In fact, all mediums should do this once every five years or every decade. That’s how growth happens – by bringing new ideas to the table and this is what OOH should also be doing.

What are your thoughts on the decrease in telecom companies’ OOH spends?
Telecom clients have shifted their focus to smaller cities. Most of their spending is concentrated in non-urban areas. If you compare what Vodafone or Tata DoCoMo used to spend earlier with what they spend now, you will realise it has gone down drastically. According to our estimates, spending by telecom sector has gone down by 50 per cent. In smaller cities, you can’t earn huge volumes since the cost of the inventory is very less.

Having said this, there is a lot of potential in rural regions. With the market saturating in larger cities, the growth will happen in rural areas. We are opening new offices to drive campaigns in smaller towns. But I believe almost 70-80 per cent of the business happens in the top 40 cities.

Why is OOH considered a fragmented industry?
I am seeing a lot of changes in the OOH space, though these are not major changes. We expect a sea change in the industry, but the change is happening at a more local level. At the industry level, there is AAI and IOAA, who are working to bring standardisation. There is a lot of movement; we are trying to blacklist defaulting clients, set new rules, conduct research, bring accountability, make OOH more scientific, etc. These are baby steps that the industry is taking. I think it is too early to expect sweeping changes, but down the years there will be some amount of logic and thinking that will seep into the process.

What changes would help the industry?
At times, small things make big differences. For example, if we achieve 100 per cent literacy in the country, it will make a huge difference to the economy. Similarly, as a trade professional, I would like more people to aspire to be OOH professionals, which does not happen right now because the industry is not perceived as a preferred career choice. There have to be certain rules and certain logic about putting up a billboard, transit ad or any other type of ad. There is no trade barrier. Today, we are talking about 2,000-3,000 vendors in the market. In a mature market like the US, there are only 4-5 players, which creates more thinking and investment.

We have been speaking to the government, but getting OOH recognised as a professional trade is itself a task.

What is the importance of rate benchmarking?
It always works. All mature markets have it, especially when it comes to digital OOH, it creates a standardised and accountable market. Benchmarking brings a lot of confidence into the medium. Clients actually invest more if there is transparency and accountability. They feel confident that they are paying the right price, otherwise they will always be sceptical. On the flip side, we see indirect benchmarking in India due to competitive bidding.

What is the role of a common currency in the industry?
We have been trying to bring in a common currency for the last five to six years. It has been proven in markets like the US and Europe that research brings accountability and standardisation. Post any research, the industry has grown by average 7-10 per cent. What this shows is that once you have some common currency, the client gets more confidence in the medium. There are some global benchmarks, which we can use, but I believe that we should have some accountability in terms of research and insights which will increase client confidence in the medium. It’s very important that instead of arguing or debating, we (OOH players) should put our heads together and invest in this domain just to boost the industry.

The industry is riddled with discussions and disagreements. We are still where we were five years back. As I mentioned earlier, we have more than 2,000 players in the industry.It is quite difficult to bring everyone on the same page.

How significant is digital OOH?
For most clients digital OOH is digital signage. For us, digital OOH is beyond that. For example, can people engage with my poster through their smartphones?

Digital medium brings a lot of engagement and accountability. I believe if all players invest in digital OOH, we could grow as an industry by 10-15 per cent. We need to speak with the government, convince them to open up a little. There are too many restrictions from the government, which is killing the medium. For example, if you look at places like the UK or Australia, digital OOH contributes to around 30 per cent of total OOH revenue. If digital OOH is expanded, it will also bring in a lot of accountability and engage the audience.

What the OOH medium delivers is impact and largeness. If you are not going to give the medium what it deserves, then it will not deliver. A plain vanilla vinyl will not be as impactful as a digital projection on a billboard.

What are the OOH advertising trends for 2014?
The last two years saw a skew in the ad spends. We saw a lot of ad spends and committed spends of more than a year. For most OOH players, 40 per cent of the booking was done by real estate.

The elections are approaching this year. Whenever there is a big event like the Olympics, the overall market improves. I see the elections playing the same role. Other than this, I foresee real estate will continue to spend big, followed by other players like telecom, consumer durables and automobiles.

(The exchange4media Group is all set to return with the fourth edition of its annual property – OOH Conference and Awards. The event 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 visit )

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