A reality check on OOH advertising in India: Experts speak
Out-of-home (OOH) advertising has been part of mainline advertising in India for long. There are varied growth figures of the growth of OOH advertising in the country. According to FICCI-KPMG M&E report 2017, the OOH industry registered a slowdown in growth rate at 7 per cent in 2016, majorly due to adverse impact of demonetization though long-term indicators remain positive, especially in the airport, transit and ambient segments. Although billboards continue to account for the largest revenue pie, new metro lines, malls, corporate parks and the leading airports are providing a much-needed boost to the overall sector. FICCI-KPMG projects a growth of 11.8 per cent CAGR for OOH in India primarily driven by development of regional airports, privatisation of railway stations, growth in smart cities, setting up of business and industrial centres, and growing focus on digital OOH.
GroupM’s This Year, Next Year states that OOH will witness good traction from sectors addressing rural audience and premium niche audience. OOH ad spends were pegged at Rs 2,750 crore in 2016, and Rs 2,942 crore in 2017, with projected growth of 7 per cent.
Meanwhile, the OOH industry in the country remains a highly fragmented one, with the unorganised segment dominating the market. Though the focus on digital OOH is on the rise, the growth in this sector has not matched up to the expectations. A move to establish an industry-supported measurement metrics for the OOH industry was initiated a couple of years back, however, not much is known about its progress or when it will see the light of day.
Given these aspects, Adgully decided to take a reality check on the OOH advertising industry in India and speak to industry experts to understand the ground realities, the challenges, the potential, growth of Digital OOH (DOOH), the road ahead and more…
The ground realities
Taking cognizance of the market realities, Suresh Balakrishna, CEO - Middle East and South Asia, Kinetic WorldWide, and Fabian Trevor Cowan, President at Posterscope, pointed out that the OOH industry in India is largely fragmented and disorganised. They further said that there is a tendency of clients to commoditise the medium, while the agencies have not been able to prove and evangelise the effectiveness of the medium, which have led to the retardation of growth in this medium.
When asked about the market size and growth, Fabian Trevor Cowan pegged the industry worth at Rs 4,000 crore and added that it is growing at 10-12 per cent, given that in actuality it spreads across a much larger ecosystem than just the traditional formats that it has come to be identified with thus far. Congruently, Nabendu Bhattacharyya, CEO & Managing Director, Milestone Brandcom, believed that organised OOH would grow at 10 per cent, keeping in mind inclusion of smart cities, modern airports, development in the railways, malls, Metro rail and upcoming PPP projects.
Growth of DOOH and the challenges
According to Bhattacharyya, while DOOH is doing great in controlled environments such as airports, Metros, malls, hospitals, coffee shops, building lifts and corporate parks, the challenge lay in implementing DOOH on the streets, where corporate and RTO rules restrict video/ digital display.
Fabian Trevor Cowan and Balakrishna both felt that the growth of digital inventory in India had been rather slow and laborious because of government regulations and the inability of most media owners to invest in high cost digital assets. However, with government’s drive to privatise over 300 smaller airports and with the Indian Railway planning to tender 2,000 stations across the country for implementation of numerous digital screens across platforms, they foresee a surge in digital inventory.
“It’s still a challenge to persuade clients to come on board for OOH”
Stating that there are the agnostics and atheists in this medium, Balakrishna noted, “While it is difficult to convert the atheists, with the help of better measurement techniques, technology and innovations, the industry is managing to bring round the agnostics pretty successfully.”
Nabendu Bhattacharyya added here, “The challenge comes only when measurability comes in play, but neither radio or digital are organised in delivering measurement. I think media planning agencies are not media neutral and that’s the larger issue.”
While stating that OOH has consistently been part of media plans even in the past, albeit with a surprisingly lesser share, Fabian Trevor Cowan believes that the challenge has less to do with persuading its usage than about persuasion to use it differently and as part of a brand’s wider communication strategy. The industry is witnessing a welcome change though, with new age marketers acknowledging the immense possibilities that the medium has to offer, driven by identifiable data, usable tech and relevant content.
Monetisation of revenue in the absence of measurement metrics for OOH
Measurement has been a perennial challenge for the OOH industry, which has led to the commoditisation of this business, said Balakrishna. “Having said that in the last couple of years the use of technology and innovation and more intense competition in the local markets has led to some advertisers looking at this medium slightly differently, which is helping increase the value for some premium inventory,” he added.
Posterscope, on the other hand, has its own OOHZONE planning platform. With data platforms developed and analytics put together in place, they have live optimised measurement streams in place that Fabian Trevor Cowan believes will drive the next cycle of OOH usage and growth in India.
Nabendu Bhattacharyya is of the opinion that clients need to believe in the medium and media planning agencies need to be media neutral. There are large brands primarily built and heavily dependent on the OOH medium, while the All India Outdoor Association comes up with the measurement answer in OOH.
Innovations and growth drivers
While Balakrishna considers the use of technology like AR (Augmented Reality), VR (Virtual Reality), Beacons, Chat Bots, etc., to drive innovation in the OOH business, Fabian Trevor Cowan feels that hyper connectivity, hyper local data combined with smart applications will make OOH more conducive to innovation in the future along with digital integration, live experiences and shareable content which will be used more as innovation platforms than the traditional methods.
But what will be the growth drivers for an industry which is largely fragmented yet has huge potential? While stating that industry unified measurement, an industry association body to regulate the industry and consolidation would be the key growth drivers for the industry, Nabendu Bhattacharyya believes that media planners need to act impartial towards brands’ needs and objectives and not drive P&L objective. Additionally, creative agencies should concentrate on medium specific creative and clients should demand rationale for each media channel recommendation from planning agencies as they are biased towards their KPI which P&L delivers and they are not medium neutral.
Balakrishna is of the opinion that the growth will be driven by digitalisation, better measurability due to technology and integration of OOH with the mobile medium.
According to Fabian Trevor Cowan, the next level of OOH growth will be driven by 4 aspects:
Data - Data exchanges are improving possibilities and leading to more effective and efficient cross-channel out of home planning producing stronger campaigns rather than just media plans.
Technology - Technology will change our media plans and make them more experiential and powerful and the existing lines between the real and virtual world will be completely blurred in out of home communications plans. Developments in location-based targeting and interactive technologies are paving the way for better more realistic and more effective OOH usage.
Scalable Content - With a significantly high percentage of internet usage happening in the out of home space, driven largely by search and share, the OOH medium allows for greater opportunities for brands to use the medium in a disruptive way thereby creating opportunities for the content to be scaled up via sharing.
Smart Cities/ Improved Infrastructure - With initiatives such as the digitisation of media at transit locations and consumer dwell time locations like shopping arcades malls, etc the share of out of home is bound to see a movement upwards.
Vodafone has always been active on OOH, which is the second biggest offline source of creating awareness for brands as well as product messaging and allows for more localised branding. While lauding the emerging technology, Siddharth Banerjee, EVP - Marketing, Vodafone, said that OOH innovations have visually improved by leaps and bounds and the sheer size and scale allows for it to create impact. “Production timelines are much shorter compared to other mediums, therefore, it is easier to mount a campaign at short notice,” he added.
OOH is a key component of Parle Product’s media mix as well and the brand uses it majorly for key launches of products. While majority of Parle’s focus is based on conventional media like television and radio, it is strongly backed with OOH campaigns. Krishnarao Buddha, Category Head at Parle Products, believes that OOH helps in reaching the customer where traditional media is slightly weaker and so Parle buys OOH space in North Eastern zones like Bihar, Jharkhand, Assam, Mizoram and so on.
Speaking on the effectiveness of OOH in creating brand visibility, Siddharth Banerjee remarked that OOH is no longer only a reminder support medium and added that with available technology, media integration and access to specific audience segments like never before, there is simply no excuse for a brand to neglect OOH innovations. “With the rise of social media, it is imperative for brands to plan their OOH campaigns smartly in order to ensure the brand can stand out of clutter and make a mark. OOH helps in creating engagement with the audience but measurability and campaign deliveries are most acutely required to increase effectiveness of OOH. While stating that evaluating competition activity is increasingly becoming sharper, which is a good thing, but a category wide data slice is harder to achieve,” Banerjee further said. He stressed that process, technology, transparency and innovation are the basic areas of improvement, which, when achieved, would instill more confidence in the media and create a bigger playground for everyone involved.
On a similar note, Krishnarao Buddha emphasised that the effectiveness of OOH largely depends on the TG a brand wants to address. While Parle is very active on OOH in metros and mini metros, the brand is looking at creating larger exposure in Tier 2 and 3 towns as well to reach a larger audience and create brand visibility.
“Lack of measurability and accountability have been pulling the medium down, unlike broadcast or print. If that changes in the OOH landscape, brands would bet big on this medium,” he concluded.