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Kerala Floods: OOH industry faces loss of Rs 200cr, need 6 months to recover: Experts

10-September-2018
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Kerala Floods: OOH industry faces loss of Rs 200cr, need 6 months to recover: Experts

The state of Kerala and its economy is limping back to normalcy after the floods which devastated the state just few days ago. Reportedly, the disaster claimed around 400 lives and the state has incurred a loss of about Rs 21,000 crore overall. As a result of the flood, all the industries and businesses in the state have been affected quite adversely, that it was the Onam festive season, when advertising spends are at peak, made things even worse.

Onam, which marks the beginning of festive season in the country, is also a time when the entire marketing focus of not just local but even national brands shifts to Kerala. The advertising spends by brands witness a considerable rise during this season.

One of the most widely affected media industries during the flood in Kerala was the Out Of Home (OOH) industry as there was severe loss of ad inventory and devastation of infrastructure across the state.

According to industry experts, the OOH industry has incurred a loss of almost Rs 60 crore, just during the months of July-August. Overall, industry is estimated to incur a loss of Rs 200 crore as it will take 4-6 months for things to normalise.

K Vijayakumar, President, Kerala Advertising Industries Association said, “Onam season is a peak time for the OOH industry in terms of revenue and this year due to heavy rainfall and floods about 50 per cent of the campaigns were cancelled. Most of the hoardings remain vacant in the city. But the losses incurred by the OOH industry is due to clients backing off and campaign cancellations and not because of the destruction of properties. In fact, the hoardings and billboards are intact as there was less wind in the flood affected areas.”

Sreekumar PV, Secretary, Kerala Advertising Industries Association said, “The flood has hit he OOH industry very severely and it will take minimum 4-6 months to resume business. Clients backed off from the campaigns as it doesn’t seem sensible to run an advertisement campaign when the whole state of Kerala is suffering. But they have promised that they will come back to us when the state attains normalcy. The industry loss approximately will be Rs 200 crore, as the industry will be idle for another 4-6 months.”

“Firstly, it is very unfortunate that the state of Kerala has gone through a disaster like this, which claimed several lives. In terms of business, it’s a tough time for the OOH industry in the state as most of the spends in Kerala happens during the festive season. 50-60 % of spends happens during the months of August-September alone. Campaigns got postponed due to the calamity and an approximate loss of Rs 50-60 crore has occurred in these last two months alone,” said Haresh Nayak, Regional Director, Posterscope APAC & Managing Director, Posterscope Group.

The Kerala OOH industry has a turnover of almost Rs 350 crore per year of which Onam season alone accounts 45 per cent.

Speaking to exchange4media, Chithra Prakash of Chitra Painters, one of the initial players in the OOH industry in Kerala, said, “The flood has affected the OOH industry of the state very badly. When the intensity of rain increased, and the situation was going out of hands, most of my clients backed off from the Onam campaigns. My firm alone incurred a loss of Rs 5-6 crore.”

“OOH within the city limits were not affected by the rains. But places like Perumbavoor, Aluva, Paravoor, Thodupuzha, Chengannur, Ranni etc were severely affected by the rains and this has reflected in the OOH campaigns as well. The areas surrounding the Cochin International Airport is another important spot for the OOH industry in the Ernakulam district, and the closing down of airport for a few days also turned out to be a prime reason for cancelling of OOH campaigns by the clients. My estimate is that the OOH industry in Kerala has to face an approximate loss of Rs 150-200 crore,” added Prakash.

“Even when the OOH industry is badly affected, the players didn’t stop themselves from helping the flood victims, they were actively involved in flood relief activities. The Kerala Advertising Industries Association has distributed around 2000 essential food kits to the flood victims in Alapuzha district and is also involved in other flood relief work,” added Sreekumar.

The state is now slowly limping back to normalcy. “According to me the state and the OOH industry is slowly getting back on track,” added Nayak

According to all industry experts we spoke with, the OOH industry in Kerala will now take minimum 4-6 months to get back to its feet. Now the OOH players are pinning their hope on the Christmas season, which accounts to about 25-30 per cent of the revenue for the year.

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