Industry POV

“4G, E-com will hold key- growth for OOH in 2016” - Nabendu Bhattacharyya


Not too long ago, there were some doubts raised about the continued relevancy of “traditional” media like OOH, print and radio in the face of increasing pressure from “new media” like digital and mobile. However all detractors have been proved wrong. Outdoor advertising has had a strong 2015 due to political stability and a general optimistic attitude in the market. Advertiser outlook had improved, though many still felt that conditions could have been more favourable. The outdoor advertising industry will want to build on this as it looks forward to 2016.

Rajiv Saxena, MD of Blue Ocean Media, agrees that there is a general positive outlook in the industry. He alluded this to the fact that government spending have been increasing and the hope that GST Bill would also be introduced soon.

In terms of the use of the medium, digital OOH still faces hurdles in the form of infrastructure though 2015 saw more interest on how this medium could be used. Experts we spoke with suggested that creativity and content will become more important, especially for digital OOH with agencies increasing their focus on creating quality content. Brands are also increasingly looking for a 360 degree solution from their partner agencies and this will become important event in the outdoor sector.

For example, Haresh Nayak, Regional Director, Posterscope APAC and MD of Posterscope Group India, agreed that digitization was dependent on the availability of the right infrastructure. “We did see it being used in some towns. Digital engagement as a sector will grow and we will have newer ways of engaging the audience, which is already being seen,” he told us.

Agreeing that brands are looking for a 360 degree solution from their outdoor partners, Arun Hariharan, COO of LiveMedia, was of the opinion that digital OOH could play a stronger role in 2016. “Brands are increasingly realising that consumer lifestyles have changed and hence the media mix they have been conventionally using must also change. That is where digital out-of-home media fits in very well as it helps brands to precisely target their customers in very contextual environments. We see the industry moving in to integrate its on-premise media offering with on-premise activations to provide a holistic brand experience to the target consumers. We expect a significant revenue growth coming from this combined offering,” he said.

2015 also saw consolidation in the industry, which could continue into 2016, while new, emerging industry segments like e-commerce and start- ups will be expected to continue spending ad revenues on OOH.

E-commerce emerged as probably the largest spender in outdoor. What was even more promising from an outdoor perspective was that it was just not the big players who spent money, though they did account for a major part of the overall spends, but even the smaller e-commerce operators have been spending a lot of money on advertisement. A trend expected to continue in 2016 as well.

The coming of 4G will also have an impact on the economy and hence on advertising. With players like Vodafone, Idea and Reliance expected to launch services this year, the competition between these players could work in favour of the OOH industry.

The telecom sector, which has traditionally been one of the key spenders in outdoor advertising, has seen its contribution to outdoor advertising reduce over the last couple of years. However, the coming of 4G could be just the fillip the sector needs to once again become one of the top spenders on OOH.

Nabendu Bhattacharya, MD of Milestone Brandcom opined that the coming of 4G will provide an impetus to data-driven activity by telecom operators. Explaining how the coming of 4G would have further indirect effects on OOH advertising, he said, “Overall, data will become faster. When that happens, mobile handset competition will increase so there will be an increase in spends from handset manufacturers, especially smartphone brands. The adoption of smartphones will also drive e-commerce and m-commerce. The purchase pattern of consumers will change.”

Speaking of traditional advertisers, the real estate sector is being singled out as one of the key sectors for outdoor advertising in 2016, apart from media and entertainment and e-commerce, which is expected to continue to be the biggest spender in 2016 too. However, there could be a slow start to the year as real estate players look to stabilize before investing in marketing.

As Sanjeev Gupta, MD of Global Advertisers, opines, this is also a good time for the industry to innovate in terms of price, payment schedules, and discounts are concerned and add on services.

“2016 will continue to be shadowed by the lack of liquidity and sluggish sales in several sectors like automobile, retail and real estate that dogged 2015. We are walking the extra mile for our clients to meet them half-way, to address their needs on terms that are congnizant of market realities. I do expect the tide to turn in the next six months for these sectors though and the sailing will be smoother from then on,” he says.

The IOAA has also been working hard behind the scenes to bring in more stability and standardization in an industry rife with too many vendors and almost no common ground. Last year, the IOAA started researching the best way to implement a common metric in the outdoor advertising industry. To carry out this study, it brought on board US-based Olympic Media Consultancy as consultants to carry out a nation-wide research into how an audience measurement system can be set in place. The IOAA has also expanded the scope of its membership. Also, in 2015, IOAA signed an agreement with Advertising Agencies Association of India (AAAI) to streamline the outdoor business in the country. The fruits of these endeavours could well be seen in 2016.

“If IOAA is able to drive some change then we should be able to see standardization of processes and payments,” agreed Nayak. Bhattacharya also opined that we could see a more organized outdoor sector in 2016 due to the efforts being made by the IOAA. Alluding to the efforts to establish common metrics for the industry, he said that the industry could expect more organized discussions about various issues.