Digital OOH all set for big uplift this year?
Many traditional billboards in cities like Mumbai are getting converted into DOOH, leading to the growth of this medium by leaps and bounds, say experts
The digital out-of-home (OOH) advertising industry in India has seen considerable growth in recent times. Many traditional billboards in Mumbai have been converted to digital format, indicating the change. However, while DOOH is attracting a variety of advertisers because of its ability to run shorter, lower-value campaigns, experts believe that it is still in its early stages of growth.
According to EY FICCI M & E report 2022, DOOH now comprises over 6% of the OOH segment’s revenues, up from just 2% in 2019. The report also predicts that the share of DOOH revenues will reach 15% by 2024.
According to Jayesh Yagnik, CEO of MOMS Outdoor Media Solutions, this year is much better for DOOH advertising as the industry is having many more inventories added to it. “As we see there are plenty of existing traditional billboards in cities like Mumbai which are getting converted into DOOH and this is leading to the growth of this medium by leaps and bounds.”
Asked about the challenges that digital OOH faces, Yagnik mentioned the fact that it is a shared media and so it gets difficult to convince clients for it at times.
Amarjeet Hudda, COO, Laqshya Solutions, expressed a similar viewpoint, stating that while digital OOH is very effective for media owners in terms of revenue generation, brands are not getting the desired mileage from it.
“DOOH has multiple brands running on one screen; hence the visibility is compromised. Digital OOH advertising is still in its early stage in India and will get momentum with technological advancement. DOOH will create a huge impact with exclusive content and innovative offerings like 4D content, an immersive anamorphic experience etc,” Hudda shared.
In April this year, Laqshya Media Group executed a 3D anamorphic installation for Tanishq’s ‘Live a Dream’ campaign. It was installed at Bandstand Promenade, Bandra in Mumbai. Hyundai too recently used 3D anamorphic installation in Gurugram to promote Venue.
While DOOH is gaining popularity among brands, there is no such trend regarding any particular sector using it more. Yagnik shared, “When it comes to categories, there is no such trend towards categories. All those who are into traditional outdoors are doing DOOH happily on large formats in conjunction with traditional formats . We are not at that stage where one has to choose between either traditional and DOOH. These both will keep growing together, however, DOOH’s growth rate will be rapid.”
The top three categories in OOH in 2021 were Real Estate & Construction Material, Organized Retail (Jewellery, Apparel, garments, showroom) and FMCG.
According to Hudda, almost all categories use DOOH, but they spend very less on the street DOOH. DOOH is working well in captive environments like malls and airports. “Most of the serious brands prefer traditional impactful OOH formats, or they prefer to take exclusive digital OOH screens for better impact and desired output for which OOH is widely known. Visibility and ROI are compromised in DOOH as one screen has 6 to 24 clients running parallely, and because of that, DOOH is struggling in India,” he shared.
PMAR Report 2022 states that DOOH spends moved up phenomenally from Rs 50 crore to 300 crore in 2021. However, just like traditional OOH, Digital OOH in 2021 had collapsed from Rs 600 crore in 2019 to Rs 50 crore in 2020. Digital OOH now has a share of 13.77%, but is far below the global average of 40%. In Singapore, 60% of all OOH is DOOH.
“When we compare large-format traditional with large- format DOOH on road, obviously DOOH is expensive as it’s a shared media and one has to pay a lot for a slot. In traditional OOH, you are present there 24*7,” said Yagnik.
However if you look at it in the other way, “Since there is a slot system for DOOH, even smaller clients can afford to be at prime locations which otherwise was not possible for them. We do have a large network of smaller DOOH media at touch points like residential complexes, corporate parks, bars and restaurants, malls, airports etc and this is growing too rapidly. More and more new-age startups are using this extensively to make their presence felt at the last mile.”
Yagnik also shared that we are at a very nascent stage of DOOH in India . Few metro cities have started adopting it . He said “For the revenue to show significant growth, this media should see an adoption in cities other than Mumbai also.”
For Laqshya media, DOOH contributes 5-10% to its overall revenue. “Shared DOOH screens are cheaper than traditional impactful OOH sites. But exclusive DOOH is costlier than traditional OOH,” said Hudda.
Though DOOH is at nascent stage currently experts believe that the growth will be significant. “This is exactly how the growth of digital media has been. So in DOOH also, the growth will be multifold as more and more traditional inventories are getting converted to DOOH. The agencies have better inventories to manage as they can sell the same site to multiple clients on slot systems. This is surely resulting in increased billing for agencies and better ROI for media owners.”
PMAR 2022 is optimistic about digital OOH for a number of reasons- from advertisers’ satisfaction to regulatory bodies granting more licenses and reduction in digital price of screens with increase in volume. According to PMAR projections, there will be an increase in screens from 60,000 to 85,000 in 2022. As a result, DOOH AdEx will increase from Rs 300 to Rs 800 crore and establish a sizable stake of 27% in OOH AdEx.
Karan Taurani, SVP, Elara Capital, shared that digital OOH in terms of growth has been far more superior as compared to traditional OOH. "In India, we are currently somewhere 15% of the share, whereas in other nations, the share percentage is higher-around 40-50%. In terms of recovery pattern, the entire OOH industry has not recovered yet. Though the mobility has come and hence the traction, some of the brands and verticals where OOH will be dependent upon will be real estate, retail, FMCG and internet companies. The recovery in OOH is expected to be 80-90% this year, which will be mostly led by DOOH because it's growing faster."
He further added, "DOOH revenues can come back to pre-Covid levels. With the kind of verticals spending on the medium, we can expect sharp bounce back in DOOH as compared to the traditional."
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