'OTT platforms to play key role in OOH growth'
Experts feel with the advent of technology, data and lower display cost, Digital Out-Of-Home will also gain prominence in coming years
The Out-Of-Home industry has witnessed close to 11 per cent compound annual growth rate (CAGR) over the last 5 years, growing from Rs 2,000 crore (Rs 20 billion) in FY14 to Rs 3,400 crore (Rs 34 billion) in FY19, according to the recently released KPMG report, titled ‘India’s Digital Future: Mass of Niches’.
Digital OOH contributes to nearly 30 percent of OOH revenues globally, but the report cites that in India the contribution has been limited to Rs 100 cr (3 percent).
As per the report, DOOH is still at a nascent stage in India, but is picking up pace. The medium is becoming increasingly dynamic as digital connected billboards can be altered in real time, linked to social media networks and offer interactive content.
Venkata Varadarajan, Co-founder, CMO, UrbanIQ, said, “The growth of DOOH is phenomenal (although still has a relatively smaller pie within OOH 3%-5%) it will also drive the overall spends on OOH. Organized retail, real estate, consumer services are the usual spenders on this medium. But in the coming years, the boom in OTT platform will also play a much larger part in growing the pie of OOH. In a market like India, billboards will still continue to dominate the larger share on OOH, but with the advent of technology, data and lower display cost, DOOH will start gaining larger prominence.”
The report also states that FY19 didn’t experience a significant growth in OOH advertising expenditure, partly due to the ban on all outdoor advertising in Bengaluru.
Also, most political parties started spending for the Lok Sabha election campaigns after March 2019, so the positive impact on revenue growth will likely be felt in 2020. Several other factors are expected to contribute to the OOH industry, achieving around 10 per cent growth in FY20. Wherein post FY20, the industry is expected to grow at 9 per cent CAGR till FY24.
Indrajit Sen, independent consultant, said, “My bone of contention with KPMG and other consultants when they estimate OOH industry revenue is that their coverage is more or less restricted to large cities. They also restrict themselves to spend through agencies. The very large direct advertising spend is ignored — of course, can’t blame them — in the absence of any comprehensive and credible Adex measure, they have to restrict themselves to data that is at least substantiated by an interview or formal feedback. Estimating direct business in addition to business through agencies and taking feedback from media across 40 cities and adjoining regions, the industry revenue comes to about Rs 4,350 crore.”
Pramod Bhandula, Managing Director, JC Decaux India, added, “the report has significant foundation of its in-depth studies-based feedback from industry sources, although I disagree on Bangalore ban alone as a contributor to its de-growth in 2019. There is more to it which is impacting the overall economy and the worst hit is on ADEX.”
The KPMG report cites that airport advertising is one of the most significant contributors to OOH growth in 2019 with 27 per cent revenue share, followed by other transit formats like trains, buses etc with 17 per cent revenue shares and 5 per cent shares from mall media. The remaining 51 per cent is contributed by road facing media which includes bus stops, hoardings, billboards, metro hoarding etc.
Varadarajan added that the medium will always be relied heavily upon for its impact delivery and generating immediate awareness. “I do feel that the ban on outdoor is getting hugely impacted for the overall OOH and might send waves across other markets as well. But what we are optimistic about is that, it will get more regulated and that advertisers will find more opportunities within this medium and will try to find smarter means to reach out to people and that’s what the Digital OOH is doing to the industry.”
Sen agreed with the report’s critical observation about growth percentages. “Continued absence of industry metrics will now start affecting total spends on OOH by medium to large advertisers. DOOH in transit and other consumption points together with OTT and other content served through mobile devices will see high growth as well as get major share of wallet — which could have otherwise gone to OOH on roads. Continued regulatory restrictions on on-road DOOH also dampens innovations and advertising effectiveness that brands want to see. This does curtail spends and share of media spend for classic OOH,” he said.
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