OOH sector expects sluggish festive season

Industry executives suspect that the impact of the GST rollout will continue to impact business, leading to sluggish ad spends for the OOH space

e4m by Abhinn Shreshtha
Updated: Oct 4, 2017 8:44 AM

Various government policies introduced in India over the last one year are making a significant impact on businesses both big and small across the country. Demonetisation followed by GST and RERA have made a huge difference to the ad industry. And things are looking bleak for the OOH sector this festive season. 
Industry executives e4m spoke with said that the impact of the GST rollout will continue to impact business leading to sluggish ad spends for the OOH space. Though business has picked up after a slow first half, the industry still expects a dull festive season when it comes to OOH ad spends.

According to Suresh Balakrishnan, CEO (South Asia, India & Middle East) of Kinetic WW, the main issue this year has been that business has picked up very late into the festive period. “Where we usually start seeing business 7-8 weeks before the Diwali, this year, it has picked up steam just 3-4 weeks prior to it," he told us. The reason for this, he says, is the GST rollout. Another side-effect of this has been an inventory crunch due to a scramble for outdoor inventory.

When asked about how much he expects business to grow by during this period as compared to last year, Balakrishnan said that the industry would see flat growth.

Alok Gupta, Director of Graphisads, told us that business has improved a bit, though not as much as was expected. According to him, nearly 25-30 per cent inventory in Delhi is still empty, a fact, he stresses, that has never been seen before.

“The festive season started earlier this time. Usually, Diwali is in November but this time it is in mid-October. On top of that there was the GST rollout, which is why we have not seen a spike for the festive season,” he said. He further added that recovery might happen around the announcement of the budget. “Consumer sentiment is still down and there needs to be some good news to raise it. We have never seen such an empty festive season in terms of inventory,” he added.

“Our business has largely not been impacted post GST. Apart from the usual dips we see during monsoon, there has not been anything out of the ordinary this year. If you consider metrics like traction as well as occupancy, then we continue to be on track though there has been no significant spike over what we normally see. We have seen the absence of some key categories like real estate, however, other spending by other categories picked up and filled the gap,” said Sharath Chandra, President of Times OOH. He agreed though that certain geographies might be facing a separate issue.

“The challenge remains in media dark areas where the feedback is that the likes
of FMCG, real estate, etc., which have generally depended on OOH, have not seen any traction yet,” he added.

“General feedback from the industry is that business is still sluggish," agreed Mandeep Malhotra, Co-founder of The Social Street. “I personally believe that business will pick up only from the next economic cycle. Overall, this fiscal year, don’t expect growth to be more than 3-4 per cent,” he said.

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