Day one of the fifth edition of the Outdoor Advertising Convention (OAC 2009) in Mumbai was well-attended by the who's who from the outdoor industry. OOH veteran, Pratap Bose, who is the chief operating officer at the Mudra Group, made a 'numbers' presentation, talking about the past, present and future of the outdoor industry.
Bose started off by saying that it has been a tough year for the industry, as the downturn in OOH started in 2008. In fact, even in 2008, the period between January and August was good, after which the industry saw a slump.
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Occupancy levels were hit in Q4 -- they were down to 60 per cent in the last quarter. Mumbai fared worse than Delhi in this respect.
Four per cent, Bose pointed out, was the industry's lowest percentage growth in the last four years.
Bose shared what he thought were the reasons for the downslide. "The medium today is out priced," he said. "The adage that OOH was most cost-effective does not hold true anymore. Radio, cinema and local press are turning out to be more cost-effective. The industry is giving out pretty untenable rates."
Second, specialists treat the medium as a commodity. They are not "negotiating" anymore, but "bargaining". Also, clients are being bullied and coerced into buying the medium, often for short term and personal gains.
He shared that today, telecom contributes to 42 per cent of the OOH industry's business; and along with media and entertainment and a few other categories, this adds up to 70 per cent. Region-wise, Mumbai contributes 25 per cent of business, that is, a quarter of Rs 1,500 crore, while Delhi contributes 15 per cent.
Bose said, "I predict a 7 per cent growth over the last year. Dependence on telecom will go even higher than the current 42 per cent; and more monies are expected to come in with new telecom-related launches, such as Aircel, Shyam Telecom, Unitech, Datacom, Reliance GSM and Swan Telecom from UAE-base Etisalat Group."
Bose, who also made a presentation as a speaker at the World Outdoor Congress in Dubai in 2004, compared those figures of 2004 to 2009's.
In 2004, in India, 72 per cent business came from billboards, which has gone down to 65 per cent -- some of the monies here have moved out to street furniture and airport media. Street furniture has gone up from 10 per cent in 2004 to 12 per cent in 2009. Airports touch approximately Rs 200 crore today, having gone up from 4 per cent in 2004 to 10 per cent in 2009.
He predicts that categories that will do well include telecom, DTH, handsets, automobiles, hospitality and healthcare; and categories that will see a dip include FMCG, airlines and white goods.
"The future of outdoor advertising is that it will go digital. We used to say that outdoor and radio go hand in hand, but now I think it is outdoor and Internet that is the lethal combination," he said.
He concluded by saying that the good news is that the outdoor industry, for one, is finally coming out of the recession.
Prior to joining Mudra in 2008, Bose was with Ogilvy for 15 years in various capacities, including head of its outdoor function for a long time, before taking over as CEO. He made history by becoming the youngest CEO in the agency in 2006. He pioneered the Outdoor AOR concept in India. Bose led the merger of the four Out of Home units at Ogilvy into 'Ogilvy Activation'. He was the winner of the prestigious WPP Atticus award in the year 2000. He was also nominated as a speaker at the World Outdoor Congress in Montreal (1998), Malta (2002) and Dubai (2004).