NEW DELHI: Out-of-home advertising expenditure will increase by 7 per cent with the telecommunication sector leading the chart for the financial year 2009-10. Out of the total advertising spend in OOH during FY 2008-09, telecom spend accounted for 42 per cent or about Rs 640 crore, followed by financial services sector at 14 per cent, media at 11 per cent and FMCG at 7 per cent.
Pratap Bose, COO, Mudra Group, said, “Telecommunication will play a very important role in outdoor advertising because by the end of this year a host of new players like Shyam Telecom, Tata Telecom – GSM, Reliance Communication – GSM, Unitech, Datacom, will launch services. The arrival of new service providers will further force existing telecom players to boost their marketing spends. Therefore, telecom will increase advertising spend in OOH, followed by other sectors like DTH, automobile, mobile handset and hospitality.”
On the other hand, sectors including financial services, media and entertainment, real estate, airlines and FMCG will decrease their advertising spends in the OOH category.
Meanwhile, state-wise, Maharashtra accounts for 29 per cent out of the total OOH advertising expenditure, followed by Delhi and the NCR region at 15 per cent. City-wise, Mumbai takes 25 per cent out of the total OOH ad spend.
Bose further noted, “In 2008, from January till August everything was looking fine. However, from September onwards, the industry started feeling the slowdown pinch. In 2008, the total OOH advertising expenditure was Rs 1455 crore and was projected to grow to Rs 2100 crore by Pricewaterhouse Coopers (PWC).
However, after being hit by the slowdown, advertising spend witnessed a 16 per cent drop and is now expected to grow to Rs 1698 crore.”
Also, the fourth quarter saw the occupancy level decreasing by 60 per cent. Bose added, “In the last four years, the OOH category registered its lowest growth at 9 per cent, while among categories like television, radio, print, OOH registered a 4 per cent growth.
According to Bose, the reason behind OOH registering a slow growth is mainly because the medium is high-priced, specialists treat the medium as a commodity and clients are being bullied and coerced into buying ideas. For Bose, the industry needs to put its act together to pump growth into the medium.