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The road to revenue recovery for OOH has kickstarted: Industry experts

During the lockdown period, Cinema and Out of Home (OOH) saw no billings. As per the Madison report, OOH witnessed a degrowth of -55% in H1 2020. However, in H2 2020, the report projects a growth range of 30-100% compared to H1.

With the strict lockdown rules, traffic was very thin on the roads and people mostly stayed confined to their homes. Hence, OOH campaigns were at a standstill. But with India entering the Unlock phase, there are green shoots of recovery. We recently saw a very innovative outdoor teaser campaign, titled ‘#13thkiTaiyaaripoori, for one of the entertainment channels.

Also read:  OOH makes a huge comeback in Mumbai with Dhani Healthcare campaign

Signs of Recovery

The festive season is fuelling demand and leading to recovery, though the road ahead is a long one. Home appliances and auto sales are picking up, which will be good news for the outdoor advertising sector as the auto industry is a major investor in OOH. A good monsoon is also leading to expectations of a strong revival in the rural markets, and as per industry reports, tractor sales have been robust. Sectors like auto, insurance, OTT, Digital brands, etc., are gradually returning to outdoor advertising.

The re-opening of metro rail services, cinema halls and malls also will give a boost to OOH. There has been some reset in the Tier 2 markets to the tune of 60-70%, according to some reports. In the Tier 1 markets, the uptake has been a bit low due to the high costs.

How OOH industry is planning to bounce back?

As more and more sectors resume complete operations, the economy is slowly moving on the revival path. While there is some upsurge in the traffic, but this needs to reach some threshold level for advertisers to promote their brands through OOH. So, the key for OOH medium is the movement of audience and reach critical mass to achieve traction so that they can woo the brands. It is time for all the OOH players to reinvent and bring in innovation and fresh ideas to keep the OOH industry moving as the opening of full traffic movement and pre-COVID level footfalls in malls will take some time.

Speaking to Adgully, Dipankar Sanyal, CEO, Platinum OOH, remarked, “Advertisers are looking at OOH more seriously than they would have done a month back. With the arrival of the festive season, almost all the key congregation areas are now open and people are moving outdoors. All modes of transport have also opened up, which is facilitating the movement of people. This is giving confidence to the brands that people are outdoors and the various OOH media are at play be it the road side hoardings, bus shelters, malls, airports, metros, etc. Automobiles,. Real estate, FMCG, telecom, media and Entertainment, retail, jewellery will be some of the categories which will use OOH in this season.”

He further said, “I strongly believe that this festive season is giving the OOH industry the boost it badly required, but recovery in terms of lost revenue is not possible. There have been some relief given by the authorities to media owners but they are few and far in between to have a positive impact on revenue. The challenge for the next 6 months will be how to sustain the boost that the industry has received in the last quarter of the 2020. Lot of positives to look forward to like the metros and mini metros have opened up considerably on all fronts. Tier 2 and Tier 3 cities is where the action is moving to and they have been least affected by the pandemic.”

According to Nabendu Bhattacharyya, CEO & MD, Milestone Brandcom, “The outdoor media has always been an integral part of marketing communication. Marketers and media planners have been using out of home media as a complete 360 formation for their plans. With consumer/ audience staying indoors during the pandemic situation, out of home (OOH) media took a back step due to stricter lockdown norms (almost more than 100 days). The focus of brands shifted to in-home media consumption such as Digital, TV, OTT, etc. These media channels got prominence and logically got priority in the marketer’s media mix consideration.”

Despite the rising COVID-19 cases in India & closed businesses around, it was soon realised that this cannot stay long and thus, the ‘unlocking activity’ was rolled out in phases across markets. This brought back audiences on roads and traffic mobility rolled back. Hence, within a few days, things settled back to normal like travelling to work, office, markets, etc. OOH media also returned to target consumers on the go.

With festive season uplifting the sentiments of Indians, brands have shown interest in being visible on the roads as well. Hence, enquiry has started and OOH being a great awareness and image building reminder medium, brands have started using it even before the festive season.

Bhattacharyya noted that while the pandemic-led lockdown has badly impacted businesses in the Indian market, he felt that the worst days are over and the OOH medium will be of a greater importance as a choice for brands. “Additionally, OOH will also be available as an added value for money option for brands as compared to other mediums of choice. People have now learned to live with COVID-19 virus, however, there is an evident improvement in the recovery rate & govt unlocking business/ economic activities. Furthermore, vaccine announcements also seem closer in the next few months. Positively, we feel things will gradually and rapidly improve from here on for the OOH industry/ medium,” he added.

 

Aman Nanda, Chief Strategy Officer, Times OOH, pointed out that as markets start to re-open, there is a lot of pent up consumer demand. Some sectors will see a considerable surge due to change in consumer behaviour. For example, the need and necessity for personal commute will drive sales in the automobile segment, the importance of hygiene will cause a steep increase in sales of personal care and so on.

With the festive season, brands are aiming to leverage the phase and cover up for the unfavourable first half of 2020. As the different phases of ‘Unlock’ push everyone towards normalcy, and as crowds move out, brands will aim to make the most of it and connect with their target audiences, with the OOH medium being a key pillar in driving the brand visibility. This will definitely cause a surge in the OOH media segment with premium locations being sought after. At TIMES OOH we have received a steady influx of requests and the future looks promising. While we continue to see traction from regular categories that spend heavily on OOH like Automobile, Handsets, BFSI, OTT and so on, we are witnessing new category entrants, looking at catching the audience attention, such as Home Decor, Education, and even B2B sectors like IT.

Elaborating further, Nanda remarked that while 100% recovery looks grim, keeping in mind the tough conditions caused due to the pandemic, however, the road to revenue recovery has kickstarted with clients reinstating campaigns along with new ones coming on board. “To ensure the numbers don’t take a dip, our teams are constantly in conversations with multiple brands to ensure business is back as normal,” he added.

The coming 6-months will be crucial, kickstarting with the festive season that is considered to be auspicious for an array of reasons. The pent-up consumer demand is slated to trigger brands to advertise their products and connect with their audience in a bid to recover the deficits caused by the pandemic.

“We are seeing auto launches, real estate offers, new OTT blockbusters and series all of them at the same time. Hence, we think it is time that OOH will generate demand as audiences step out, brands will be mindful that OOH as a medium cannot be discounted,” Nanda said.

Atul Shrivastava, CEO, Laqshya Media Group, is equally upbeat as he said, “Traffic on roads is back to 80-90% of normal times even in the metros. In smaller cities it had picked up immediately after Unlock 1 and 2 were announced. It has come as a great relief to quite a few categories, where Impact advertising is a must. Some of these categories are – Automobile, OTT, Mobile Handsets, Real Estate. Apart from the impact, the medium ensures the reach to a large number of people at much lower cost than a few other mediums. Continuous spends by categories like BFSI & FMCG gives strength to the power of OOH Medium. Build up for the festival season demand began a bit late, but we are witnessing new campaigns with each passing day.” 

Shrivastava further stated that while the lockdown period affected the sales of the products, it also created a void in the advertising activities by the brands. It definitely left marketers, flushed with budgets. There were 2 options – either to conserve it or to use it to support and consolidate the demand for their products through advertising. With the Unlock in different phases and demand in the markets, now every brand is trying to claim its place for the consumers’ preference. Recovery in terms of revenue has to be achieved in 2 parts - cost saving through the supportive measures by the Govt. and overcome the vacancy and rate erosion.

Several municipal corporations, railways, AAI, private site landlords have offered discounts, the occupancy in Tier 2 cities has reached to 90% level. Soon metros will also reach that level. “As I said, the marketers are left with decent budgets for this FY, I’m sure large part of it would get spent in next 06 (now 05) months only. We hope to reach 70-80% occupancy against the last year’s H2 numbers,” Shrivastava concluded.

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