OOH sector hoping for festive cheer

The festive season, which begins late August, has traditionally been the strongest period of the year for the sector and OOH players are hoping that it will help offset a slow start to the year.

by Abhinn Shreshtha
Published - Aug 18, 2017 7:36 AM Updated: Aug 18, 2017 7:36 AM


The first half of 2017 handed the OOH sector a triple whammy with GST, RERA and demonetization. With some of the biggest spenders on outdoor advertising like Real Estate, Automobile, FMCG, etc. suspending ad spends, July was an especially bleak month for the sector. This year, the Pitch Madison Advertising Outlook had predicted the OOH industry to grow by 11 per cent as compared to last year to touch Rs. 3,234 crore. Considering H1, the industry is hoping that sentiment picks up during the festive period so that the year ends on a high note.

 

The festive season, which begins late August, has traditionally been the strongest period of the year for the sector. Last year, according to industry sources, the OOH sector would have seen spends increase by almost 25 per cent in the second half of the year thanks to the festive season. 

 

“July saw the OOH industry take a hit of nearly 20-25 per cent. However, GST will have a positive impact on OOH and the media industry. Service tax brought no industry credit for the manufacturing sector but with GST, it is a straight benefit for them. We will start seeing benefits from next month. The festive season might see an impact but this would be because of other economic reasons and not GST,” said Alok Gupta, Director of Graphisads.

 

Other industry observers also agreed that outdoor ad spends must have dropped by at least 18-25 per cent in July because of GST and other factors. However, some are still hopeful that the festive period would breathe new life to ad spends. For example, Suresh Balakrishnan, CEO (South Asia and Middle East) at Kinetic WorldWide, told us that he expects ad spends during this festive period to be at least 10 per cent more as compared to last year. 

 

Noomi Mehta, MD and Chairman of Selvel One Group, opined that spends during festive season should increase by 10-15 per cent over last year though he admitted that it is hard to put a number. “The pujas in West Bengal have set the tone and it seems like it will be a good period for advertising. The industry seems to have had a bad July but the rates have firmed up now. However, since rates were depressed in July due to GST, I don’t think it (ad spends) will be much better than last year,” he said.

 

On the other hand, citing the impacts of GST, RERA and demonetization, Rajneesh Bahl, Founder and Director at Grey Parrot Integrated, told us that festive ad spends could drop by 10 per cent. “We are seeing new briefs coming in after July. The FMCG sector has also started spending once again as they want to push their products in the festive season. This is a very important period for them. If the festive period is not good then it will be a really bad year for the industry,” he told us.

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