Ad firms fear dark outdoors

Mumbai neon blackout may cost agencies 25% of revenue.

The Maharashtra government's decision to black out billboards in Mumbai to save power has not only taken away the glitter from the famed Queen's Necklace but has also dealt a body blow to the Rs 100 crore outdoor advertising industry in the city.

Yogesh Lakhani, owner of Bright Ad Agency, is a worried man. His 25-year-old firm, specialising in outdoor advertising, will face a 25 per cent fall in revenue over the next two months.

Says Lakhani: "We have over 200 billboards across the city that are illuminated. There will be a substantial cut in our revenue as we cannot charge our clients for night use."

Over 25 outdoor advertising companies will be affected by the government's decision to stop power supply to billboards.

Points out Mangesh Borse, business director, Portland, the outdoor arm of the agency JWT: "It is a classic case of plucking the lowest hanging fruit. It will be interesting to know how much power the government will save by cutting the lifeline to billboards."

The outdoor advertising business consists of billboards, mobile trucks and bus shelters. Over 450,000 billboards dot the US, and Shanghai has more than 19,000.

In contrast, there are roughly 3,000 billboards in Mumbai. The cost of night billboards range anywhere between Rs 10,000 and Rs 5 lakh a month, depending on the location, traffic and visibility.

The cost includes permission from the Bombay Municipal Corporation (BMC), electricity use and rentals to agency or hoarding contractors.

Borse points out that advertisers pay a 100 per cent premium on fees for illuminated hoardings, which means a loss for the BMC as well as electricity suppliers.

This is all the more glaring in summer as advertisers target this season for display billboards since people tend to stay outdoor for longer hours in summer nights, says Paresh Mehta, owner of Kapol Advertising.

Industry sources point out that the government has been silent on bus shelters and mobile vans, which also consume power. Asks one advertising executive, "How can you build Shanghai in darkness?"