Outdoor industry raises alarm against illegal hoardings

Out of home markets have become fragmented, disorganised & cluttered due to illegal hoardings, giving sleepless nights to OOH players

e4m by Priyanka Nair
Updated: Jul 16, 2012 7:58 PM
Outdoor industry raises alarm against illegal hoardings

Illegal sites are a curse for the outdoor industry as they hugely impact the credibility of recognised media owners. It has been seen that politicians are often the worst offenders, erecting self-congratulatory banners and hoardings on all kind of occasions – be it a birthday, anniversary, or election – to show off their rise in the party ranks. Reining them is no easy task. But the civic body is equally to blame, with its vague rules and leniency towards offenders, including local businesses that can't afford or don't want to spend on most other means of reaching out to the consumer.

Commenting on glitches that outdoor media owners face, Sanjeev Gupta, Managing Director, Global Advertisers said, “The presence of illegal hoardings in the market creates a huge price difference between authorised media owners and unauthorised players. At some places we have seen hoardings situated at restricted areas, where the government does not allow anyone to erect hoarding. Also, the procedure of getting a licensed hoarding is very difficult. It involves permission from society, local governing bodies and many other public departments whereas an illegal hoarding doesn’t have to do anything.”

Some of the main areas where illegal structures become a matter of great concern for media owners are prominent traffic junctions, near historical monuments, main markets, railway stations and bus depots. “During festival season, illegal hoardings turn out to be big competition for us as they capture prominent locations and clutter the space of advertising and raise the price band,” mentioned Gupta.

Out of home markets, especially of north India, have become more fragmented, disorganised and cluttered due to illegal hoardings. Multiple price points for the same inventory have raised the concern of lack of transparency in the outdoor business over a long period of time.

There are few airport areas that also face the same problems. It is learnt that Cochin International Airport Limited (CIAL) has invited license fee tenders from media companies for Kochi Airport, but this time they have fixed a minimum limit of the license fee at an exorbitant amount of Rs 10 crore per annum, which according to few players, is totally and unquestionably unviable from business point of view.

The outdoor sites that form about 60 per cent of the commercial value of the license are being undercut by more than 150 privately owned sites whose owners do not have to pay a penny to CIAL as the license fee and are not bound by any rules about fixing the price of the sites. These privately owned advertising spaces are right next to the licensed sites but are on the private land that flanks both sides of the main approach road, owned by CIAL, to the airport from Athani. Since these owners are under no obligation to CIAL or to the licensee, they sell their sites at unbelievably low prices, making the licensed sites totally unsalable.

Atul Shrivastava, Chief Operating Officer, Laqshya Media said, “Why only Kochi, even Amritsar or Hyderabad or Kolkata have similar problem from the airport concessionaire’s perspective. For the other lot, it is quite justifiable to make use of an opportunity available within Municipal limits to target airport traffic. The main challenge is the concessionaire loses the exclusivity and fails to get the value, which they anticipated at the time of tender participation.”

In Mumbai, local government bodies have recognised this problem and passed regulations and appointed special officers to monitor outdoor advertising space. But the authorities need to buckle up and speed the action.

“Agencies pay the best attention to this aspect but you can’t get your hands on every document of a site and verify it. If the site is illegal, it would definitely create problems for the client and agency. In order to secure themselves, the clients nowadays demand indemnity letter from the concessionaires. Penalties and show cause notices are reported in several cases,” added Shrivastava.

With the formation of Indian Outdoor Advertising Association (IOAA), the industry is optimist that media owners will soon come together and help agencies and advertisers in tracking legal sites for their outdoor media plans.

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