ADVERTISING Over half a dozen agencies vie for the Rs 1,450-crore out-of-home advertising market
Pradeep Guha recently quit as the CEO of Zee Telefilms to set up Street Culture, an out-of-home (OOH) advertising firm. Guha will compete with established players like Times OOH, Percept OOH, Future Media, Anil Ambani’s Big Street and Sam Balsara’s Platinum Outdoor for the Rs 1,450-crore market. Still, he is confident that Street Culture will break-even in around a year. Guha says: “OOH advertising is a cost-effective medium that brands will now look at leveraging.”
As consumers’ interface with brands grows beyond the four walls of their homes, OOH advertising promises to be the next big thing. Traditionally, outdoor advertising stood for just hoardings. Today, OOH, as the name suggests, is more than just billboards — it encompasses signages, street furniture (like bus shelters), displays and LCD screens in and around retail outlets and malls, transit media like airports, railway stations etc.
With retail outlets, bus shelters, airports and even railway stations getting a facelift, brand managers find these are good platforms to showcase their brands to customers. Sunder Hemrajani, managing director, Times OOH, said: “Infrastructure development is driving the out-of-home business in India. With the ambience getting better, brands want to be present in such places.”
Advertisers seem to love it. Rameet Arora, marketing head, Colors, a new Hindi general entertainment channel from the Network 18 group, said: “In a fragmented media environment, it is critical to be always present before the customer, OOH is a potent medium to remind, surprise and engage him.”
A Bharti Airtel marketing executive adds: “For a brand like Airtel with pan-India presence, we need to go local and regional. OOH is a medium that allows us to do just that.”
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According to consultancy firm PricewaterhouseCoopers (PwC), the OOH industry grew 25 per cent from Rs 1,000 crore in 2006 to Rs 1,250 crore in 2007. By 2012, PwC expects the industry to be worth Rs 2,400 crore.
The advertising space at the Delhi airport is said to have been sold for around Rs 150 crore for three years to Times OOH. The company will invest around Rs 100 crore in constructing 1,400 bus shelters in Mumbai alone, apart from 300 in Bangalore and 200 in Hyderabad. Each shelter can fetch between Rs 20,000 and Rs 100,000, depending on its location.
Big Street has acquired the rights for displays at stations of the Delhi Metro. Apart from that, it owns properties across platforms such as mobile vans, kiosks, light-emitting diodes and bus shelters. It plans to invest Rs 200-500 crore in the business within two years.
Future Media has tied up with Bharat Petroleum to launch Future Fuel, a television network across 20 petrol pumps in Delhi, which provides an audio-visual outdoor platform to brands. It plans to spend Rs 150-200 crore in 18 months on acquiring new rights.
Partho Dasgupta, CEO, Future Media, said: “Brands want to be present wherever consumption happens and as an OOH company we need to be innovative.”
Most OOH advertising companies acquire rights to properties such as bus shelters, railways stations and highways through government tenders, while the in-store/mall deals are done directly. The rights given by the government are usually between 5 years and 15 years. However, in case of malls, the company has to go in for revenue sharing with mall owners which ranges between 20 per cent and 40 per cent.
According to Percept OOH President Pareek amajor challenge for the OOH industry is the lack of a measurement system. Harit Nagpal, chief marketing officer, Vodafone, adds : “The investment in this medium is based on gut and not on measured effectiveness and reach. If the ad spends’ contribution in OOH is to increase then a measurement system is essential.”