For the out-of-home (OOH) industry that has been in the doldrums for quite some time now, it’s finally time to celebrate. With billboards, banners and posters at every street corner across the country extolling the virtues of India’s many political parties, the OOH industry has a reason to smile as the countdown to the 2014 general election starts. Ad spend on OOH is expected to touch R21.1 billion in 2014 against R19.3 billion in 2013, a compounded annual growth rate of 9.2%, according to the 2013 Ficci-KPMG Indian media and entertainment report.
?Weak economic sentiments had lead to a fall in advertising spends in case of the out-of-home industry. This is expected to change a lot with the general elections being round the corner. Secondly, spends are expected to rise once again from July onwards after the new government comes into power,? said Nabendu Bhattacharya, managing director and founder of Milestone Brandcom, an out-of-home advertising firm.
According to industry sources, of the R4,000-5,000 crore total political advertisement and publicity spend across different mediums, outdoor advertising industry is expected to garner around 10% , that is, R400-500 crore. However, a major portion of this expenditure could be on cash payment basis and may not shown up in the billings.
Billboards will continue to remain the medium of choice followed by street furniture. In 2013, approximately 55% of out-of-home advertisers used billboards, while 17% relied on street furnitures, says the Ficci-KPMG report. ?While television will continue to gain maximum from political campaigns, outdoor will also benefit from it as it will be used a medium which is locally more relevant,? said Jehil Thakker, head of media and entertainment practice at KPMG in India.
Indrajit Sen, executive director, Indian Outdoor Advertising Association (IOAA), and promoter and director, Media, Analytics and Design P Limited, an OOH consultancy firm, goes on to say that the reason behind using outdoor for political advertising is the fact that it is local and is extremely visible. ?Unlike other mediums such as television and radio, one cannot switch from one channel to another in case of outdoor. Out-of-home acts as a very strong reminder, especially in a scenario when an entire city is plastered with campaigns by various political parties. One gets to see a hoarding every 100 meter,? said Sen.
Despite the increase in advertising spends this year, the advertising rates of OOH mediums such as billboards, transit media or street furniture have not increased from that of last year. For instance, in a city such as Mumbai, the cost of a billboard located at Mahim Causeway, which is a vital link road connecting South Mumbai with its northern suburbs, is R1-3 lakh for a week. The rates increases by 20% during the festive season. ?There is enough and more inventory available and that is the main reason behind ad rates remaining similar to what they were last year. With brands not advertising much, for every outdoor media owner 20-30% of their inventory still remains unoccupied,? said a senior media planner on condition of anonymity.
Agrees Bhattacharya who goes on to say that while there has not been much increase in advertising rates, the industry will still benefit, as the volume of advertising has increased thanks to the upcoming general elections.