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The connecting dots for OOH industry are now visible

05-January-2012
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The connecting dots for OOH industry are now visible

It is observed that OOH is moving quickly from a commodity medium to a medium that advertisers are using strategically to deliver more. An increasing number of advertisers, who are looking at the best way to connect with the consumer outside home through various channels are now demanding accountability, innovation and better quality. The most important change in the year 2011 for the OOH industry is that it has opened up to advertisers for opportunities.
Here is a quick look at the 2011 calendar to know more of the agents of this significant change and what the future holds for OOH.

The Year of Business Consolidation
The year, 2011, for the Indian OOH industry as a whole has grown substantially. The year has brought in consolidations in major OOH agencies like Lintas Media Group – buying half of the stake from Aaren Initiative Outdoor Pvt Ltd, and Selvel - buying Outdoor Advertsing Professional (I) Pvt Ltd’s (OAP) stake from Rediffusion Y&R. This clearly is an indicator that the future of business is good and therefore, companies will stay invested in the business. On the other hand, the industry did a see a brief slowdown too.

Abhijit Sengupta, Outdoor Advertising Professionals (I) Pvt Ltd (OAP), remarked, "The year was more of sustenance or rather consolidation. We are yet to reach the peaks of 2008 and early 2009. But this is natural, because whatever one says is the growth or the pricing during those days was quite an aberration, which needed correction and it was done by the slowdown. Till now, I guess, the vacancy is hovering at around 25-30 per cent, which is sustainable. Well, the industry expected the vacancy to be around 10-15 per cent in the third quarter. But, because of the dullness in the money market as well as slow growth in many sectors, it was less than expected."

New Brand categories make way to OOH
What turned out to be an interesting observation was that new brand categories started showing interest in the OOH medium. New brands like Tanishq’s Mia, Tata’s Housing’s Amantra and Sulzon India’s PALS campaign, Bosch Home Appliances, MTV’s popular music series campaign Unplugged launched some really interesting and innovative OOH campaigns last year.

Commenting on this, Nabendu Bhattacharyya, Managing Director, Milestone Brandcom, said, "The year 2011 was not a great year from the perspective of the largest spenders. Telecom reduced spends, but OOH stakeholders pursued other categories and were convincing enough to bring local clients at city levels. However, few categories got convinced to invest more viz. jewellery, real estate, retail, media entertainment, automotive and FMCG. Thus, even in adverse conditions, industry grew due to other category contributions."

Major concerns for service tax structure
But it was the new service tax rule that united many outdoor media owners. The new service tax rule, which states that the service tax would have to paid on the 5th of 6th of every month once the invoice of the service was raised, left the media owners fuming because, in other words, irrespective of whether dues were collected from clients or not, media owners would have to pay service tax. Originally, they paid service tax after the collection of dues from clients. The implementation of such existing rules is something the advertising industry is wrestling with these days.

Development of SOP
Standardisation and organisation of systems was an imminent development for the Indian OOH industry. On this front, the industry now has a qualitative way in place with the help of Indian Outdoor Advertising Association’s (IOAA) Standard Operating Procedure (SOP) and Media Research Users Council’s (MRUC) second study of IOS on the measurement of outdoor media.

Arminio Ribeiro, CEO, Madison Media Group, commented on the SOP development and said, "I believe the newly formed outdoor body IOAA and its SOP initiative is one of the best things that have happened to our industry. This development is a step ahead, wherein the IOAA together with specialist agencies can drive responsibility towards building advertiser confidence in the medium by reassuring them that the industry is making a serious effort to demonstrate responsibility accountability and over all improvements in the way the medium looks and that the OOH industry is united in its approach to its future growth. There needs to be a greater degree of co-operation between the major players on the buying and selling sides of the business, if we are to see some evidence of this manifesting itself on the street. The current SOP is one such initiative towards building advertiser confidence in the medium."

Sanjay Pareek, President, Percept Group, also expressed a similar opinion and said,” The effort by IOAA to organise and bring some method to the madness in the industry through SOP still requires complete buy in from all stakeholders of the industry, that is, from asset owners, agencies and the advertiser, but I think it is, in fact, a step in the right direction. It has to be followed through effectively taking all the key stake holders of industry interest in consideration."

Adding to this development, Pramod Bhandula, Managing Director, JCDecaux India, said, “The outdoor guidelines of many cities may be revised to reduce visual clutter and promote user friendly and service oriented formats. This will, in turn, enhance the aesthetics and overall cityscape.”

Digital OOH picked up lost pace
The development of digital OOH looks promising; it is a medium that will be able to offer much more depth to advertisers through engagement and connectivity. Although much of the digital development in India is yet to happen, the year has been bright for digital OOH.

Talking about the digital OOH space, Guarang Shah, Founder, DSN Digital Network, said, "The year, 2011 has been a very good year for the digital OOH industry. Advertisers are now using digital OOH services with more confidence and seriousness. Film promotions have used our medium the most this year and new brand categories like FMCG has shown keen interested in our medium."

If the industry builds on the momentum, makes strategic investments and stays committed to improving trade practices, OOH in India will quickly become a ‘must have’ for global advertisers and it will reinforce the belief of ‘a must investment medium’ for all local brand categories.

 

Tags Abhijit Sengupta Arminio Ribeiro Nabendu Bhattacharyya Pramod Bhandula Guarang Shah Sanjay Pareek Percept Out of Home OAP Madison OOH Media Group JCDecaux India DSN Digital Network Priyanka Nair

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