The OOH advertising industry has been growing at a steady pace for the last couple of years. With 2013 proving to have been a somewhat better year for the sector as compared to previous years, OOH vendors are optimistic that the upcoming elections, among other factors, will provide a much needed fillip to the industry this year.
Here are some numbers to get things into perspective. The outdoor industry formed 6.2 per cent of the total advertising spends in 2013 according to a Pitch-Madison report, lying in fourth place behind TV, print and digital. A similar study by GroupM says that 2013 saw the OOH industry grow by about 6 per cent, a remarkable achievement, considering that the growth in 2012 was about 2 per cent. Despite many brand managers shifting significant budgets to digital and mobile spends, 2014 is expected to be another strong year for the outdoor sector (Pitch-Madison forecasts it to grow by 8.2 per cent, while Group M’s studies pegs the growth rate at 8.8-9 per cent) So, what are the factors driving this general sense of optimism?
Lok Sabha Elections
We have already seen the aggressive push towards advertising adopted by Congress and BJP. Industry sources estimate that nearly Rs 100 crore of Congress’ ad budget has been lavished on just outdoor advertising. It would not be wrong to assume that BJP will spend a similar amount too.
The importance of this one event can hardly been over stressed. The outdoor sector generally starts picking up during the second half of the year, but with the elections in May, political spending on OOH advertising has been a welcome addition to a traditionally slow first half. We saw the same with the state assembly elections in 2013, which proved how vital OOH is for political parties. Since most cities have banned posters, outdoor remains the only viable option available for propaganda, along with radio as both are cost-effective and have reach. “All national parties such as BJP, Congress, and NCP are geared for outdoor campaigns. Beside this, outdoor industry will also get benefit due to its extensive reach in rural areas and tier cities,” said Sanjeev Gupta, MD, Global Advertisers.
Growth of non-traditional OOH
Though hoardings and their ilk are considered the driving force behind OOH, the last few years have seen a lot of development in new forms of outdoor communications. We are all familiar with the remarkable growth story of transit media (including street furniture and bus/ radio cab advertising). The medium grew at 13.9% last year and has consistently outgrown the overall OOH advertising space over the last couple of years. The Pitch-Madison report forecasts it to grow at 10 per cent this year too. But transit is not the only ‘other’ option that is growing. Haresh Nayak, Regional Director, Posterscope Asia-Pacific said, “The OOH medium has evolved in malls and multiplexes, whether it is pure display, engagement, or events. We have also seen growth in niche ambient environments, for example, cinema has grown by over 200 per cent.”
Electronics major Philips is one of the brands that is a strong believer in the efficacy of ambient media. “The efficacy and proficiency of ambient media is very strong as it creates a differentiated platform for the brands,” Amit Tiwari, Country Head (Media) for Philips said, adding, “A lot of consumption of outdoor media, these days, takes place in malls and multiplexes. Also, since most LFRs (Large Format stores) are present in these places, it creates a direct connotation to the point of sale.”
Another emerging option is captive audience advertising, which is digital displays, the ones seen at malls and coffee houses. Though still nascent as compared to its cousins; transit and ambient media, this is another interesting space. For example, Rajan Mehta, Co-founder and CEO of LiveMedia, which boasts of clients like Big 92.7 FM, CavinKare, HDFC Bank, etc., claims his company, which specializes in captive audience advertising, has been growing at a rate of 20-25 per cent YoY.
Says Bharat Dhuppar, Omkar Realtors & Developers, “Real estate is now opening up to alternative OOH media vehicles such as cinema theatres, airport branding and sometimes to the extent of inflight advertising campaigns. It works better because of the simple reason that the audience is in a captive environment and has to pay attention to the communication. It is a definitive component today in any media plan that gets made for a successful campaign.”
Studies on the growth of traditional OOH sector and the current blue-eyed baby—transit media are easily available. However, there are not many comprehensive studies available on other outdoor media performs. With better data, interest in these platforms will continue to increase.
New Infrastructure Projects
A major reason for the growth of transit media has been the rapid infrastructure development seen in the country and this will continue to boost the outdoor industry in the coming months. Ad spots at locations like the Metro in Mumbai and New Delhi and the new airport terminal at the Mumbai International Airport are highly sought after by advertisers. “The infrastructure in the country is improving; we can take the example of the new terminal at Mumbai airport. Once an airport is privatized, it gives more opportunities for technological development of OOH properties and what this does is attract international brands,” opines Nabendu Bhattacharya, MD & Founder of Milestone Brandcom.
Echoing this view, Sanjay Chitkara, Head (Marketing) of LG says, “Outdoor is an evolving medium – urbanization and new infra such as shopping malls, offices, express highways etc. have created tremendous opportunity to innovate with outdoor medium. Concentrated joint efforts by all the stakeholders will help leveraging this opportunity in a more constructive manner.”
The Coming Of Digital OOH
Digital OOH or DOOH as it is also referred to as is perhaps one of the most exciting new things to emerge in the OOH space. According to a recent study by PQ Media, the average global consumer was exposed to various DOOH media for 14 minutes per week in 2013, a 75 per cent increase from eight minutes in 2007. The report also named the US, China, the UK, Canada and Australia among the more mature DOOH markets in the world (in terms of exposure and revenues).
The situation in India is not that rosy, though inroads are being made by over the last few years. Though, brands seem to have welcomed the move, regulatory issues are proving a hindrance. However, a report from consulting firm PwC for the period between 2013 and 2017 states “Growth markets and the impact of digitisation will drive that rise in global OOH advertising spend. There will be double-digit CAGR growth in two countries: India (11%) and Brazil (10%).”
“As with most technological advances, it isn’t what the technology enables you to do but what you do with it. Creativity is the game-changer that will make the difference between a bland communication and one that’s breakthrough,” opines Farrokh Madon, Chief Creative Officer of
Brands are obviously excited about the possibilities of digitization when it comes to OOH. “It (DOOH) will be crucial and cause a positive disruption. All the current rules will go out the window. The agility, responsiveness and the ability to track that it will bring is going to be phenomenal,” says Satinder Juneja, VP (Sales & Marketing) of NIIT Technologies. Sudeep Narayan, Director (Marketing & PR) of Volvo Auto India, also calls digital OOH a “game enhancer”. “Digital signage can be compatible with other devices like smartphones, profile audience and target ads accordingly. This implies both personalization and customization,” opines Karan Bajwa, MD of Microsoft India.
Changing Expectations In Terms Of Creativity & Innovation
Customer engagement is the new mantra for advertisers and the OOH space is no different. The problem, as Amitesh Rao, Director (Brand & Media) of MTS India puts it, is that you just get a fraction of a second to take in the ad. Brands want a way to break the clutter and many large outdoor agencies are increasingly working with brands to develop innovative and creative solutions. Says Rajneesh Bahl, CEO of Percept Out Of Home, “It is more about creative enhancement. Over the last few years, we have seen brands demanding creative ideas from outdoor agencies.”
With the outdoor industry needing to compete with new advertising mediums such as digital, mobile and social media, the industry needs fresh perspectives, says Chitkara. And this has been happening over the last few years. An even more interesting development is the way advertisers are utilizing technology to carry out innovative cross-platform promotions. For example, recently Mahindra Reva combined Twitter with the OOH medium in an integrated campaign. There a few other examples of brands experimenting with new technologies like RFID tags, QR codes, augmented reality, etc. and this will only increase in the future.
There is a general perception that the digital medium has eaten into traditional OOH’s share and this is true to an extent. The lack of a measurement metric, among other issues have hampered its growth in recent times, but with the emergence of new technologies and innovations, as well as growing interest in new mediums apart from traditional hoardings looks set to boost the OOH industry in the coming months. The challenge for OOH players is whether they are able to use this as a springboard to perform even better beyond 2014.