The past few years were tough for the out of home (OOH) industry when it tanked by over 30% in H1, according to the Pitch Madison, mid-term review of the Indian media landscape. Yuvraj Agarwal, executive vice-president (Group Revenue), Laqshya Media Private Ltd, an industry veteran, who oversaw outdoor media activities at the Rajiv Gandhi International Airport in Hyderabad, the first Greenfield airport project in the country and has worked for leading brands such as Volkswagen, MRF, Toyota Corolla, to name a few, says a rebound is possible if OOH players play their cards well. He speaks to FE?s Radhika Sachdev about the slowdown and the impact it has had on the fledging OOH industry (Rs 1,700 crore, according to media research company, TAM Media Research.
The OOH industry tanked by over 30% in H1. Please comment.
Nobody had expected it and it happened so suddenly that for many it was already too late to make amends. The prices were driven southwards as much as 50-60%. It?s not over yet. but the bloodbath witnessed in early 2009 is almost over.
Why did the OOH suffer the most?
Because of the high media acquisition costs, fragmentation, lack of research and audience measurement. There are only two ways to get out of this mess. Either downsize fast or upsize aggressively to build dominance. Companies should cut costs with full speed and reassess their media portfolios for short, medium and long-term viability. Prune down assets and costs that are a drain. Go for value deals, bargains, tie-ups, barters to monetise unutilised inventory.
How was Laqshya impacted by the slowdown?
The normal average occupancies took a major hit because of the recession affected categories such as real estate, financial services, retail and auto, curbing advertising expenditures in all these sectors.
During normal times, these categories are key contributors to the OOH kitty.
How big is the OOH market?
As per a KPMG analysis, it is around Rs 1,700 crore. However, we would peg it between Rs 2,000 and 2,500 crore.
Within OOH what is the share of airport advertising?
Around 10-15% of the total OOH spends.
How can planners measure return on investment (RoI) on OOH spends?
We are one of the first companies to have sponsored the effort by the MRUC (Media Research Users Council) to launch the Indian Outdoor Survey (IOS). In fact the first findings of the IOS for Mumbai and Pune have been released with some startling revelations for the Indian media industry.
What categories of brands are the biggest advertisers in the OOH space?
Traditionally, PSUs, airlines, telecom operators, hospitality, travel services, tourism companies, luxury brands, financial services, automobiles, real estate are key advertisers in this sector.
According to a Cushman & Wakefield?s Airport Research Report 2008, non-aeronautical revenue sources (such as retail and entertainment) are growing at a faster pace than aeronautical resources. Your comment.
The global standard is that the non aeronautical sources should contribute around 70% of the revenue for an airport operator. In India, it was the other way round till about three years back when the airport operator, Airport Authority of India, used to generate just about 25%from non aeronautical sources.
Today, most private airports are generating around 40-50% of their revenues from non aeronautical sources and it is growing fast.