The next Times Square?
The Rs 1,650 crore out of home (OOH) medium is ripe for consolidation, Hemanth Shah, managing director of lintas initiative outdoor and president (OOH initiatives) at Lintas Media Group tells Radhika Sachdev
2009-to the present has been a really tough and trying period for the OOH industry. Fragmented, unorganised, non-transparent — those are the three epithets used to describe the state of this medium. Your comment?
OOH Industry is much like India itself, diverse yet unified; vast yet connected. One has to see a pan-India OOH campaign to be fully in awe of this so-called unorganised industry. The negative perception is something that’s gone on for far too long. Its shortcomings are hyped disproportionately, which is a disservice to the medium. Of course, there are challenges in attracting and retaining good talent and using a common currency to enable better planning but there is hardly any medium that’s perfect yet!
The negative growth of the medium — according to Group M and Madison-Pitch report — is surprising, as the avenues have multiplied over the years with the changes in consumer lifestyle and increasing hours spent outside the home. How do you explain this dichotomy?
If the investments in all media units at different touch points reflects a modern day consumer’s lifestyle, then the picture changes. In the reports you’ve cited, not all these touch points are covered, hence there is a dip in numbers. Our belief is that the industry has grown manifold and it has fundamental strength and buoyancy to continue growing over the next few years, at least.
Outdoor advertising is probably the oldest form of advertising, yet, all these years, it’s remained unregulated, unmeasured and unappreciated. Your comment?
As I’ve already explained, the attention seems to be on the what-is-not-right than what is! which is unfortunate. In my experience, I’ve found that to convert a non-believer of OOH is easier than the fence-sitters who play it safe. This is a medium which has demonstrated innumerous times how it has helped build brands. It has scale and size that can be truly wondrous.
Can traditional OOH medium complement print TVCs and digital in creating a top-of-mind recall?
Of course. It cannot just complement, but also lead/drive/remind, as per a brand’s communication strategy. Many of the cellular service brands have been built on OOH. From BFSI to FMCG to educational institutes, there are verticals that have leveraged this medium and continue doing so.
From a retail perspective, how can careful selection of key OOH opportunities support retail brands in the catchment area?
This is vital for the retail segment because without any spillover/wastage, the relevant target group can be addressed with this medium. OOH media can contribute in the form of directional signage that paves the way from outlet to the catchment area. This format has been tried, tested and appreciated by jewellers, saree houses and fashion brands. One visit to Karol Bagh in Delhi or MG Road in Cochin will vet these trends.
What is the individual contribution of billboards and other channels to this medium?
Billboards still have the lion’s share but over the years, this has reduced because of regulation and growth in other media formats. We estimate the billboard share to be about 50 percent. Among the emerging media opportunities — digital OOH, media at retail and transit are the fast growing ones.
Globally, OOH is viewed as one of the cheapest mediums. Your comment.
Cheap has a negative connotation. OOH is definitely one of the better ROI media options, available. This does not mean that there are no premium options! What it does mean is that for like-to-like investments in different mediums, OOH delivers better ROI. It is inherent to the practice of the industry that the unit of sale is a month whereas for print (a day) and TV (a 10 seconder) is far less.
Given that cricket is a big opportunity for this medium, why is that while other media are ridding piggyback on cricket properties, OOH players have remained rooted in the past?
OOH has had its upside in the in-stadia opportunities and activation at malls and multiplexes, however, a lot more can be done to attract the cricket-centered monies, which print,TV and web have done very well to exploit.
What role does technology play in enabling greater marketing messaging? Some say, the OOH industry is at an inflection point. Do you agree?
Technology has an almost magical way of transforming the status of the industry. What automatic counters on a street and eyeball tracking devices at retail outlets can deliver is something one could never expect in the normal evolution curve. I disagree that OOH is at an inflection point. It is a sound medium that has good fundamentals and keeps attracting technological innovations because it can elicit a wow.
The medium is prime for consolidation and attractive for investments. The evolution of a common currency for measurement would certainly be milestones that can give fillip to the way investments take place.
Which are the sectors that contribute most to this medium — telecom, BFSIand real estate?
Also, educational institutes, media & entertainment industries that are equally gung ho on OOH.
Marketers spent Rs 1,650 crore in 2010 on OOH advertising, which amounts to 6.2 percent of total advertising spend. Isn’t that small?
Of course, numbers don’t reflect the true potential of the medium. But rather than just rue whether it is 6.2 percent or 7 percent or 8 percent, the focus should be on encouraging the OOH players (among and between themselves) to adopt best practices/ common code of conduct at the earliest.
Static billboards continue to enjoy the lions share in the total mix and garner 55 percent of total OOH spend. Is that changing in favour of ‘in-mall’ advertising, digital and transit media?
True. The billboards’ share is decreasing visà- vis in-mall, digital and transit media. One of the prime reasons for this shift is measurability and controlled environment where a consumers’ frame of mind is valued.
Currently, all the action is unfolding in Tier 1 towns with metros accounting for half of the total OOH spend. Going forward, is the share of Tier2 and Tier3 going to increase?
Investments in Tier 2 and Tier 3 markets shall certainly increase because of increasing disposable incomes in these towns, urbanisation of mindsets and aspirations. Tier 1 cities have near saturated markets for some categories.
Last year, the deal activity in this industry was also limited — why?
The advertisers realised that the break point on negotiation has been reached. So the goal post moved from deals to added value — innovations included. As to deals at the M&A level, the global economic sentiment and the political climate in some states need to improve for that to happen.
Some of the key challenges before Indian OOH sector are lack of tailored creative content, scientific metrics to measure effectiveness and no formal regulatory code/ policy, higher inventory cost and low inventory utilization. Do you agree?
Yes these are the handicaps but they are certainly not show stoppers! What is important is advertisers’ confidence in the medium. As an agency, we have invested in creative teams and have tools that offer scientific planning. What is lacking is consensus at the industry level that should happen sooner than later.
Internationally, the new buzzword is ‘Gladvertising’ — a way of advertising based on emotion recognition software (ERS) and cameras that detect whether consumers are happy, so that adverts tailored to their moods can be delivered to them. Do you foresee all this happening in India?
Of course. In fact, some of this is already happening and creating ripples of excitement too! Nokia Lumia launch and sky party on an aeroplane, Mahindra XUV launch of cheetah image at the autoexpo are all very good examples of technology-enabled innovations that have been delivered in India.