OAC 2007: Will the small fish survive?

At OAC 2007, experts such as Pratap Bose, Indrajit Sen, Amrit Pal Singh and Noomi Mehta discussed the various issues in the outdoor industry in the wake of international players entering India

At present, outdoor advertising forms a Rs 1,000 crore (Rs 10,000 million) industry in India. On an average, it constitutes around 6 per cent of a marketer’s ad spends. In a nutshell, outdoor advertising has achieved quite a bit in India, but it clearly has a longer way to go.

Grappling with some of the topical issues surrounding this industry was a panel of eminent persons chaired by Pratap Bose, CEO, Ogilvy & Mather India, at the Outdoor Advertising Convention 2007 held in Mumbai recently. The panel comprised Noomi Mehta, MD, Selvel Vantage Group; Amrit Pal Singh, MD, Adwel Advertising; and Indrajit Sen, COO and business head, Jagran Engage. After speaking to some small town outdoor companies, OAC arrived at some relevant questions on the future of outdoor advertising in India, which were then tossed to the panel members turn by turn.

Pratap Bose

To begin with, Bose initiated a discussion on the entry of international players in India, saying that the smaller players perhaps feel intimidated and insecure as a result. Mehta of Selvel Vantage Group responded, “The Russians are already here, and so are the Americans, Aussies and the South Africans. They have been here for over a year, but the question is, have they really done anything since? They are all finding the pace too hot to handle.” According to Mehta and Singh, the real threat for smaller players is not from international companies, but from the larger Indian players. “Like any other industry, foreigners are bound to enter the scenario,” said Singh. “But it’s going to be very tough for them to succeed.”

Noomi Mehta

The panel blamed the media for the huge role it has played in the growing negative perception of the outdoor industry. “On one hand, we have the likes of the Jagran Group of publications lambasting outdoor as a medium, and on the other, the group enters into the outdoor space,” said Singh, supporting the point one of the smaller players had raised before the OAC. Clearly, this hit a raw nerve with Sen of Jagran Engage, who pleaded innocence, saying that he has no say in what journalists write. “Then what about all those people who get their photos plastered all over the news pages simply by throwing money around?” inquired Mehta. “That is a reality.”

Amrit Pal Singh

Sensing that the discussion was taking a different turn (much to Sen’s discomfort), Bose decided to steer it back to small players versus big players in the outdoor industry.

Singh of Adwel took a realistic view. “Seven or ten years down the line, there will be a washout of local/regional players, unless they join hands with the larger ones,” he said. Clearly, for him, consolidation was the only way forward. For once, Sen agreed with Singh. “We can’t reach the deepest pockets of the country overnight,” he said, speaking like a true large player. “Forget a city, every municipality has its own set of rules. We can only enter local markets by forging strong links with the local players.”

Indrajit Sen

Bose then raised the point that small companies are generally dependent on large clients or on media speciality shops. “How will this equation change when the tables turn?” he asked. Mehta was pensive. According to him, media speciality shops have changed their model from discount-based to value-oriented. “By adding value to clients, media speciality shops will help smaller clients fetch their share of the pie.” Clearly, his thoughts were that the agency role wouldn’t diminish, and direct dealing with the client was a no-no, although he faced some stiff opposition from the audience here.

Mehta then delivered a full toss when he spoke on the issue of tender contracts being of such small periods that the spends on outdoor activity are practically wasted. For instance, if one thinks of constructing something elaborate on a location and spends lakhs of rupees on it, one ends up with no profits as the contract period is only for some two years – most of which is spent in getting the structure in place. “This leads us to take short-cuts,” explained Mehta. “We must collectively make a decision to not sign contracts that are for a period less than 10 years.”

Then came everyone’s favourite topic: the issue of policies and government regulation. Singh felt strongly that there was too much regulation and no organised regulatory body, leading to half-baked knowledge and quick people churns in the business. “The genesis of the problem is that we don’t understand regulation,” Mehta chimed in. “We need to comprehend the fact that outdoor is a legal business.” While the law lays down rules on hoarding heights, aesthetic disturbance and distractions to the public, the current scenario goes much deeper: At present, the state of affairs is such that it is not clear who is making the rules – the judiciary or the legislature.

The debate wrapped up on the topic of research and measurement in outdoor or, rather, the lack of it. Most of the panellists felt that at this point, outdoor owners should not directly fund research studies for the industry, such as the MRUC one, or else it would lead to a view that the studies were biased towards some site owners.

According to those present, the answer lay in creating an industry body that worked at a national level, a thought that Mehta said would soon be reality as work on that is already under way.

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