MUMBAI: There is a need to build transparency in the entire value chain which includes advertisers, agencies and media owners, need for national reach, and to demonstrate the real potential and power of the OOH medium—these were the concerns voiced by Ashish Pherwani, senior manager, media & entertainment, Ernst & Young Pvt Ltd, at the Outdoor Advertising Convention (OAC) on June 18, 2009.
Pherwani who was speaking on the topic “The slowdown, the Outdoor Advertising Industry and what the Industry can do to cope”, emphasised that a lack of transparency has hampered the growth of OOH industry. “I know several cases where advertisers laid claim for 100 sites but only 90 sites were delivered, while in another case, an advertiser paid for a period of one month but got a delivery of the sites only for a period of 26 days”, he said.
While the industry has seen spectacular growth and the sector size has doubled in the past six months, it was also one of those that was badly hit during the economic slowdown. The reasons for its growth are fragmentation of television and print which would continue to be heavy. Another factor to boost growth of the industry is the youth which comprise more than 30 per cent of the population. The youth spend more time outside home and hence the importance of the medium.
The fact that the sector was heavily relying on financial services, which was at 30 per cent of the total revenue, is the reason for the slowdown having such a big impact. Real estate, ITES--the sectors that OOH was dependent upon, were also badly hit.
During the slowdown, the OOH sector’s capacity utility dropped by about 10-20 per cent. Some players panicked as rates fell almost 50 per cent. This all led to a revenue loss of 20-25 per cent in the last six months of 2008-09.
“There is also the need for a national network because today’s average advertisers are looking for 6000 towns where they want to advertise as that is where buyers are sitting. But how many media owners can offer such numbers to their clients?” asked Pherwani.
Another reason hindering the growth of the OOH industry is that the day-to-day operation mechanics of the sector is weird. “Why is it that this sector has the highest credit period when we see it in the light of the fact that the sector also pays its licence and tender fees in advance yet they end up with 120 and 130 days of credit period? Nor is there an official blacklisting of this sector either,” said Pherwani.
There is an urgent need to show the power of the medium. He said that most of the time there is a cut-paste of TV and print commercials in OOH and therefore advertisers would not believe that this is not a lead medium. There is a need to reposition the entire industry. There is also need to attract good creative people who can prove the power of the medium. The Indian Outdoor Survey results should be properly used by the industry, Pherwani said.