Tax reforms, investments part of Budget wish list for OOH industry

The OOH sector has had a positive start to the year and agency heads are hoping for a pro-business and pro-growth Budget that will ensure that this good run continues. Though there are no OOH-centric expectations, the general consensus is that a budget that supports growth and encourages investment will only lead to higher spends on advertising and thus, benefit all facets of the advertising ecosystem. 

Sanjeev Gupta, MD, Global Advertisers said, “After achieving a historic victory in the Lok Sabha Elections 2014, we have high expectations from the newly elected Modi-led Government. India is likely to emerge as the world’s largest middle class consumer market with aggregated consumer spends of $13 trillion by 2030. It has become essential for MNCs/ SMEs to be visible on different advertising media to promote their services/ products. Therefore, outdoor advertising industry needs Government support to grow in the future.” He further stated that the Centre should focus on creating new opportunities, allow FDI, develop transparent policies and reforms, address tax issues and licensing procedure of public structures.

While stating that the outlook in general is positive for the coming years, Rajiv Saxena, MD, Blue Ocean Media said, “We are expecting tax reforms and interest cost liberalisation.” According to him, with such reforms corporates will save more money, which could lead to higher advertising budgets and ad spends. The outdoor agencies we spoke to agreed that one of the main facets of the budget should be to create an economy that promotes spending and investments.

Rajan Mehta, Founder and CEO, LiveMedia added here, “Overall, for the media industry, it is important that the Budget spurs investments through tax reforms. Consumption is still low and the Government needs to bring in liquidity (for consumers) so that spending increases.” Another important thing, according to Mehta, is that I&B policies should be comprehensive and be implemented properly.

Echoing similar thoughts, Atul Shrivastava, COO, Laqshya Media remarked that the Budget should help bring down soaring prices and cost of living and infuse confidence in investors. “This will allow more disposable income to consumers and spends to increase, while also increasing flow of capital in the market, which will improve sentiment as well as availability of funds for new ventures.”

He also pointed out that some other steps to help consumers would be to provide income tax relief and reduction of housing and consumer loan interest rates. “Steps should be initiated/ charted out to reduce India’s dependence on monsoon for agricultural output. Bad monsoon is gloomy and brings down the market sentiment drastically. Connecting the rivers is an idea being discussed in this connection,” Shrivastava added.

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OOH players prepare for slump as IPL approaches

The seventh season of the Indian Premier League is set to start on April 16, with the first 20 games to be held in the UAE and the remaining 40 to be held in India (between May 2 and June 1). OOH agencies say that the IPL season causes a disruption in the business, with advertisers keener onelectronic and print media to exploit the high visibility the popular tournament generates. In fact, citing the same reasons, Sanjeev Gupta, MD, Global Advertisers expects OOH spending to drop by almost 30 per cent during the IPL season.

 

 

Another reason that could have an effect on spending this season is the fact that 20 matches are being held outside the country. “Spends on OOH will logically be less as brands will not see enough value. Even when the IPL returns to the country in May, the window available is very small,” said Balakrishna P.M, COO, Allied Media, a media planning agency.

Rajneesh Bahl, CEO, Percept OOH also agreed that most advertisers do prefer to go “on-air”. However, he pointed out that OOH spends from the IPL governing body itself as well as the various franchises should also be taken into account. “They (franchises and IPL) know that outdoor gives them a great option to create buzz around the tournament. So, even when revenue from other advertisers decreases, OOH does help,” he said.

Sunder Hemrajani, MD, Times Innovative Media, also agrees that franchises do use OOH extensively for their campaigns. According to him, though brands spend substantially on TV and print, interest in properties around stadiums picks up during the IPL season. “We have usually seen that our properties around the stadiums in metros like Mumbai, Delhi and Bangalore do well during the IPL season, but, overall, OOH does take a hit during this period,” he added.

On a more hopeful note, Atul Shrivastava, COO, Laqshya Media,believes with the controversies surrounding the IPL this season, maybe brands would be hesitant about being associated with it. “A lot of advertising budget is consumed by the IPL every year. Since it has started, the OOH industry has suffered from low interest during this period. With limited budgets, clients will obviously give more preference to TV and print advertising rather than OOH. I cannot predict but, if advertisers reduce spending on IPL this year because of the various issues, then those budgets might get diverted to OOH spending. Maybe then things will be different this year,” he said.

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OOH signs up for growth

Submitted by admin on Tue, 03/18/2014 - 11:00

 

By ABHINNA SHRESHTHA

 

No matter which party comes to power in the 2014 Lok Sabha elections, it is the outdoor advertising industry that stands to emerge winner. Vendors of the Out Of Home (OOH) industry are optimistic that the elections, coupled with other factors, will again provide a much-needed fillip to the industry, which has been growing at a steady pace for the last couple of years.

Compared to previous years, 2013 has been a somewhat better year for the sector. Here are some numbers to get things into perspective: The outdoor industry formed 6.2% of the total advertising spends in 2013, according to the Pitch-Madison Media Advertising Outlook (PMMAO), in fourth place behind TV, Print and Digital. This Year Next Year, a study by Group M, too says that 2013 saw the OOH industry grow by about 6%, a remarkable achievement, considering that the growth in 2012 was about 2%. Despite many brand managers shifting significant budgets to digital and mobile spends, 2014 is expected to be another strong year for the outdoor sector (PMMAO predicts it will grow by 8.2%, while Group M’s studies peg the growth rate at 8.8-9%). So, what are the factors driving this general sense of optimism?

Q & A: ‘Concentrate on a particular area, format or niche’

 

THE POLL DRAMA

We have already seen the aggressive push towards advertising adopted by the Congress and Bharatiya Janata Party (BJP). Industry sources estimate that nearly Rs100 crore of the Congress’ ad budget has been lavished on outdoor advertising. It would not be wrong to assume that BJP will spend a similar amount too. The importance of this one event can hardly be overstressed. The outdoor sector generally starts picking up during the second half of the year, but with the elections in May, political spending on OOH advertising has been a welcome addition to a traditionally slow first half. We saw the same trend during the state assembly elections in 2013, which proved how vital OOH is for political parties.

Since most cities have banned posters, Outdoor remains the only viable option available for propaganda, along with radio as both are cost-effective and ensure reach. “All national parties such as BJP, Congress and NCP are geared for outdoor campaigns. Beside this, the outdoor industry will also get benefit due to its extensive reach in rural areas and Tier II and Tier III cities,” says Sanjeev Gupta, MD, Global Advertisers.

Analysts and industry experts also expect the general business sentiment to improve post the elections, which will further serve to loosen the advertising purse strings.

 

NON-TRADITIONAL OOH

Though hoardings and their ilk are considered the driving force behind OOH, the last few years have seen a lot of development in new forms of outdoor communication. We are all familiar with the remarkable growth story of transit media (including street furniture and bus/radio cab advertising). The medium grew at 13.9% last year and has consistently outgrown the overall OOH advertising space over the last couple of years. The Pitch-Madison report forecasts it to grow at 10% this year too. But transit is not the only ‘other’ option that is growing. Says Haresh Nayak, Regional Director of Posterscope Asia-Pacific, “The OOH medium has evolved in malls and multiplexes, whether it is pure display, engagement, or events. 

We have also seen growth in niche ambient environments, for example, cinema has grown by over 200%.” Electronics major Philips is one of the brands that is a strong believer in the efficacy of ambient media. “The efficacy and proficiency of ambient media is very strong as it creates a differentiated platform for the brands,” says Amit Tiwari, Country Head (Media) for Philips. “A lot of consumption of outdoor media, these days, takes place in malls and multiplexes. Also, since most LFRs are present in these places, it creates a direct connotation to the point of sale.” Another emerging option is captive audience advertising, which is digital displays, the ones seen at malls and coffee houses. Though still nascent as compared to its cousins, transit and ambient media, this is another interesting space. For example, Rajan Mehta, Co-founder and CEO of LiveMedia, which boasts of clients like Big 92.7 FM, CavinKare, HDFC Bank, etc., claims his company, which specializes in captive audience advertising, has been growing at a rate of 20-25% YoY. So, there is definitely an interest being shown by advertisers in this medium. “In the West, digital OOH is already mainstream. As the technology improves, it will also become cheaper and, hence, more viable,” he says.

Says Bharat Dhuppar, Omkar Realtors & Developers, “Real estate is now opening up to alternative OOH media vehicles such as cinema theatres, airport branding and even in-flight advertising campaigns. It works better because of the simple reason that the audience is in a captive environment and has to pay attention to the communication. It is a definitive component today in any media plan that gets made for a successful campaign.”

Even the entertainment sector, which is among the largest spender on traditional OOH, seems to believe in BTL activities. For example, when asked how significant mall activations were as part of OOH strategy, Amit Nair, Business Head, Zee Khana Khazana said, “We have always been strong when it comes to BTL activities. We do a lot of road shows across cities as well as workshops within malls. They are a great tool for creating consumer connect and brand recall also increases through these activities.”

Studies on the growth of traditional OOH sector and the current blueeyed baby - transit media - are easily available. However, there are not many comprehensive studies available on other outdoor media platforms. With better data, interest in these platforms will continue to increase.

NEW INFRASTRUCTURE PROJECTS

A major reason for the growth of transit media has been the rapid infrastructure development seen in the country and this will continue to boost the outdoor industry in the coming months. Ad spots at locations like the Metro in Mumbai and New Delhi and the new airport terminal at the Mumbai International Airport are highly sought after by advertisers. “Revenue growth will only happen through new infrastructure projects such as the Metro and new airports,” says Rajiv Saxena, MD of Blue Ocean Media. However, Sunder Hemrajani, MD of Times OOH cautions that though infrastructure development would be a growth driver, it needs to be looked at from both the demand and supply side. “New infrastructure projects improve the supply of good, high-quality media but one also has to consider the demand side of the equation. We need to provide innovative and complete solutions. There is need to show the advertiser the right value proposition,” he said.

Echoing this view, Sanjay Chitkara, Head (Marketing) of LG says, “Outdoor is an evolving medium – urbanization and new infrastructure such as shopping malls, offices, express highways, etc., have   created tremendous opportunity to innovate with the outdoor medium. Concentrated joint efforts by all the stakeholders will help leverage this opportunity in a more constructive manner.”

ALL EYES ON DIGITAL OOH

Digital OOH, or DOOH as it is referred to, is perhaps one of the most exciting new things to emerge in the OOH space. According to a recent study by PQ Media, the average global consumer was exposed to various DOOH media for 14 minutes per week in 2013, a 75% increase from eight minutes in 2007. The report names the US and China as the largest and second largest markets for DOOH in terms of revenues respectively. Other significant markets in terms of exposure and revenues are the UK, Canada and Australia. Interestingly enough, an earlier report by the same agency had stated that global DOOH revenues will expand at a 21.3% CAGR in the 2011-16 period.

The situation in India is not that rosy, though inroads are being made over the last few years. Though brands seem to have welcomed the concept, regulatory issues are proving a hindrance. A report from consulting firm PriceWaterhouse Coopers for the period 2013-2017 states, “Growth markets and the impact of digitization will drive the rise in global OOH advertising spends. There will be double-digit CAGR growth in two countries: India (11%) and Brazil (10%).”

“As with most technological advances, it isn’t what the technology enables you to do but what you do with it. Creativity is the game-changer that will make the difference between a bland communication and one that’s breakthrough,” comments Farrokh Madon, Chief Creative Officer of Y&R Advertising. Brands are obviously excited about the possibilities of digitization when it comes to OOH. “It (DOOH) will be crucial and cause a positive disruption. All the current rules will go out the window. The agility, responsiveness and the ability to track that it will bring is going to be phenomenal,” says Satinder Juneja, VP (Sales & Marketing) of NIIT Technologies.

Sudeep Narayan, Director (Marketing & PR) of Volvo Auto India, also calls digital OOH a “game enhancer”. “Digital signage can be compatible with other devices like smartphones, profile the audience and target ads accordingly. This implies both personalization and customization,” says Karan Bajwa, MD of Microsoft India. For now, we can take a look at some examples from around the world to see the kind of potential digital OOH holds.

CHANGING EXPECTATIONS: CREATIVITY & INNOVATION

Customer engagement is the new mantra for advertisers and the OOH space is no different. The problem, as Amitesh Rao, Director (Brand & Media) of MTS India puts it, is that you just get a fraction of a second to take in the ad. Brands want a way to break the clutter and many large outdoor agencies are increasingly working with brands to develop innovative and creative solutions. Says Rajneesh Bahl, CEO of Percept Out Of Home, “It is more about creative enhancement. Over the last few years, we have seen brands demanding creative ideas from outdoor agencies.”

With the outdoor industry needing to compete with new advertising mediums such as digital, mobile and social media, the industry needs fresh perspectives, says Chitkara. And this has been happening over the last few years. An even more interesting development is the way advertisers are utilizing technology to carry out innovative cross-platform promotions. For example, recently Mahindra Reva combined Twitter with the OOH medium in an integrated campaign. There a few other examples of brands experimenting with new technologies like RFID tags, QR codes, augmented reality, etc. With OOH advertising now having to compete with rapidly evolving and highly engaging platforms like digital and social, the integration of technology into OOH campaigns is bound to keep increasing.

THE BOTTOMLINE

There is a general perception that the digital medium has eaten into traditional OOH’s share and this is true to an extent. Lack of a measurement metric, among other issues, has hampered its growth in recent times. However, the emergence of new technologies and innovations, as well as growing interest in new mediums other than traditional hoardings, looks set to boost the OOH industry in the coming months. The challenge for OOH players is whether they are able to use this as a springboard to perform even better beyond 2014.

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Mumbai’s Terminal T2 opens new avenues for OOH Industry

Terminal T2 at the Chhatrapati Shivaji International Airport is arguably the foremost contributor to Mumbai OOH market expansion. Opening its doors to passengers on February 12th, whole new advertising options will be available for outdoor campaigns in due course. The swanky world class terminal T2 at the Chhatrapati Shivaji International Airport boasts of arguably the largest art gallery at such a facility, depicting the vibrant mosaic of the country's cultural heritage and varied collage of the city's life. The terminal is equipped with a dedicated express access road (the Sahar Elevated Road), a huge seating area outside, the world's biggest art museum and a stunning glass facade, among several other state-of-the-art facilities. From outdoor advertising perspective, terminal 2 will further enhance the visibility of brands, increase their re-call value and showcase their message to thousands of premium traveler everyday.

Commenting on the media options available in the airport, Sunder Hemrajani, MD, Times OOH, said, “As far as we are concerned there will be a variety of world class media options available which includes- digital media options, static media options, scrollers, sponserships etc. Also, we have worked out packages targeting different group of advertisers like we have a red carpet package targeted at the VIP’s. So, I think a fair bit of variety will be there for the advertisers.”                     "The Terminal 2 is truly a first class infrastructure. It marks the beginning of a new chapter in the growth of outdoor advertising too. The opening of Terminal 2 is one of the most important milestones in the history of Chhatrapati Shivaji International Airport (CSIA), as well as Mumbai. Making every Indian proud of this glorious structure." said, Sanjeev Gupta, MD, Global Advertisers. So what does the Terminal 2 has in store for our very own OOH industry? Lets hear from the expert’s themselves Mandeep Malhotra, President, DDB MudraMax, said, “Yes for sure Mumbai’s new terminal will open new avenues for OOH industry. Only worry is the loss on existing terminal will reduce the total pie growth on airports and transit.” Abhijit Sengupta, CEO, OAP, said, “Any advertiser especially premium brands  would like to have its presence in nice environs so would be the case in T2. I am sure Times OOH would be judicious to select the right fixtures, types and have balanced advert space and proximity between each, so that these do not overwhelm the ambience. When asked will T2 help in increasing brands re-call value, Sengupta said, “This cannot be said immediately unless recall studies are conducted. My hunch says that for the initial period brand recall could be low since passengers would be more eager to immerse into the nice new environment with little regard to advertisement. But at the same time advertisers wouldn't like to miss the opportunity to be present there first.” Haresh Nayak, MD, Posterscope India, said, “I believe that city’s newest landmark, Mumbai airport’s new terminal, T2, which will cater to both domestic and international fliers under one roof, will over a period of time open avenues for OOH Industry. The terminal is equipped with stunning state-of-the-art facilities which will further enhance the visibility of brands, increase their re-call value and showcase their message to heavy traffic travelers every day. Premium brands of automobile, entertainment, fashion & jewellery, real-estate, banks and many more have humongous scope of innovative outdoor advertising at this landmark”. James, Varghese, COO, Adz Edge Communications, said, “The New T2 is a 4 level highly integrated terminal with each levels having key touch points that  constitutes to an air traveler’s voyage. So, I am sure it would really further enhance the visibility and increase their re-call. Also, Iam sure that Times would really come out with good package to boost the advertisers for the right placement . Its surely going to open new avenues .Packaging and Placement would play key role.”          Ankur Rastogi, OOH Media Enthusiast, said, “T2 is truly first class    terminal. It is the most magnificent building built since  independence. It will surely enhance the visibility of brands.  Premium brands across categories have humongous scope of innovative outdoor advertising at T2.” Join us on

Global Advertisers wishes everyone a very Happy New Year

 

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Youth Quotient: "Negotiation skills are crucial as OOH industry thrives on sales"

Youth Quotient: "Negotiation skills are crucial as OOH industry thrives on sales"

 

Neeti Gupta is the Team Leader – Agencies at Global Advertisers, Mumbai. Using her operational experience, she has played a crucial role in identifying opportunities for the financial sector in outdoor.

Gupta’s nine years of experience in the outdoor media industry includes handling of mainline agencies, and developing and maintaining marketing strategies to meet organisational objectives.

In a free-wheeling chat with exchange4media, Gupta talks about her passion for outdoor advertising, projects she is proud to be associated with and her wish list of brands she would like to work on… 

Experts: 

How does your typical work day look like?
My day begins with a cup of tea without sugar on my table, interacting with my team and colleagues on daily updates. After a little gossip session, I move to work. Proper execution of campaigns, new pitches, client research and meetings becomes everyday schedule in season time. I am glad to have a mentor like Sanjeev Gupta, Managing Director, Global Advertisers, who has always been supportive in trying out new concepts in the field of outdoor advertising.

I believe in one philosophy, i.e. work hard and party harder. By the second half of the day, I try to freeze my plans with clients and media planners as availability of premium hoarding is very momentary. Every day comes with a challenge and opportunity, and I simply face them. At the end of the day, it’s purely about business and your negotiation skills, as outdoor advertising industry thrives on sales.

What do you love about your work? And what do you dislike?
I love the negotiation part. However, to convert a deal with good profit margins, one requires spontaneous decision-making ability and confidence in your product. Due to multiple small outdoor agencies, there is no standard price for any outdoor inventory. Thus, it gives an impression of disorganised sector.

Which is that one project you are proud to have associated with?
I have worked on various outdoor campaigns, but the ones which I really liked are Bank of Baroda's branding initiative that included new logo launch and its first IPO campaign, where we had explored new possibilities of outdoor advertising. Huge display formats, transit media, 3-D cut-outs were for the first time deployed for the brand. Beside these, I have executed Wadhwa Builder's outdoor campaign for its new projects, where our premium sites located at Bandra, Marine Drive and western suburbs hoardings were extensively used for innovation. India's prominent outdoor agencies such as Kinectic, Lintas, Posterscope, Madison and Milestone have always showed faith in our potential.

Who is that one industry leader whom you look up to?
For me, it is Sanjeev Gupta. He has contributed to the growth of OOH industry with ideas, innovation and technology since 1996.

Five brands you would want to work with….
I would like to work with Tata Group and PSUs (SAIL, GAIL, National Insurance, etc.)

Five things outdoor advertising has taught you…
I have been in this industry for nine long years. It has taught me many things…
• Never take things for granted
• Always cross check on availability of inventory
• Innovation is the future of OOH
• Know your product and company
• Never commit anything you can’t deliver

If you wouldn't have been in outdoor advertising, what do you think you would be doing?
I would have been a fashion consultant or designer. I like to live a quality life with high-end brands. However, I look at my work quite differently; if I am enjoying my work, I will succeed in life and no challenge will be impossible to overcome. Hence, I am in the right profession.

Where do you see yourself five years down the line?
Probably, in the same company, handling bigger accounts and responsibility.

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