Guarded optimism was the order of the day at the OAC 2009 on day two, held here in Mumbai. The day saw a number of influential speakers and industry persons sharing their thoughts on issues affecting the industry. These included Lloyd Mathias, chief marketing officer, Tata Teleservices talking about reallocating outdoor spends; Ravi Kiran, chief executive officer, South Asia, Starcom MediaVest Group discussing proprietary planning tools; Sanjay Dhar, co-founder and chief operating officer, Integrid Media, who shared the '10 commandments' of how specialists can stop contributing to media owner's problems.
OOH veteran Noomi Mehta gripped the audience's attention when he started off his discussion. He started off by telling the story of the state of the industry like a fairytale, describing an 'enchanted place' and a dream of making this place beautiful and a knight (local authority) who wielded his sword.
Mehta urged media concessionaires to come together and sit and talk in a council. He appealed to specialists to work hand-in-hand with media companies, also urging them to walk away from clients when being taken for a ride. He repeatedly urged media owners to join the Indian Outdoor Advertising Association (IOAA), so that as a body it could take up the serious issues that plague the industry.
The final session of day two was a panel discussion, 'Big Fight: Fallout of the slowdown - How to deal with it', moderated by Sam Balsara, chairperson and managing director, Madison World. Panellists from the media owner's side included Sunder Hemrajani, MD, Times Innovative Media; Kalpesh Vora, director, Creations; Dipankar Chatterjee, chief operating officer, street furniture, JC Decaux; and Sanjiv Lall, CEO, Pioneer Publicity.
While panellists from the OOH media specialist's side consisted of Praveen Vadhera, COO, OOH, 141 Wall Street; Dipankar Sanyal, COO, MOMS; Vivek Lakhwara, CEO, Aaren Initiative; and an advertiser representative in Pradeep Pandey, director, branding and communication, Aegon Religare.
Balsara started off the discussion by saying that the overall market is turning the corner in terms of sentiment and an important factor for this is the thumping victory of the Congress. He said, "Instead of worrying about de-growth, let's talk about what we can do as OOH professionals to make it grow at a galloping pace."
Hemrajani of Times OOH offered that a key driver of inflated costs were high acquisition costs. However, in the last six months, a correction has already taken place where billboards, which make up 60-65 per cent of the business, have seen a correction of 30-35 per cent in pricing, while street furniture has seen a correction of 20-25 per cent and transit, 13-14 per cent.
Chatterjee of JCDecaux said that the positive side is that correction has happened in the way media is being procured. "Just because you buy higher doesn't mean that the client will pay. In fact, OOH had lost a lot of clients and business to radio," he said.
Pandey of Aegon Religare shared that his company had launched two of its brands via outdoor mainly, spending 20 per cent of its ad budget on the medium. He pointed out that OOH as an industry puts itself on the back foot, calling itself the 'reminder medium' and selling itself as 'add-on'. He added that outdoor as a medium has to become more cost-effective and there should be return on investment (ROI) and measurability. He also felt that outdoor has never tried to reinvent itself, the way Internet has.
Hemrajani pitched in that OOH has to evolve to understand what the client is looking for. He provided an example of what Times OOH had done for a telecom client at the Delhi airport. Times put up an interactive screen, where people could touch the screen and learn more about the features and benefits of the new phone. For this, the client was ready to pay a premium, because it met his needs.
Can innovation be done on all sites, was Balsara's question. Vora of Creation Publicity suggested that empty and 'contact number' hoardings, that currently take up 35 per cent of billboards, be taken care of so as to reduce the feeling of 'recession' in the minds of clients. He shared an example of how Creations, along with OOH specialist Navia Asia, created and executed a 'No smoking' campaign to aid this.
Balsara added that the TV industry acted swiftly in times of recession, softened its rates and now its inventories are full. "This helps grow advertising. It is better to have something on that board. And don't forget," he reminded, "advertising can grow only if an advertiser grows."
Vadhera of 141 Wall Street felt that the medium has to be looked at as a strategic tool and of course, there will be a premium on innovation as investments here, too, are higher.
Balsara's next question to the panellists was 'how is it that the OOH medium is dominated by telecom and automobiles, when it is FMCG that actually contributes to half of the total advertising industry, but the category does not use OOH extensively?'
Lakhwara of Aaren Initiative provided an answer, saying that this stems from FMCGs' target audience, which comprises mainly women. "It is mostly working women who are on the move, but the travel of a housewife, which is a huge segment of their audience, is restricted to a small radius. Hence, FMCG prefers spending more on TV, where they can reach them," he said.
Lakhwara also felt that media owners should find a better marketing technique for their properties, which should go beyond just excel sheets and photos.
Balsara next broached trade issues like owners being plagued by bad debts and delayed payments. Lall of Pioneer gave an example of how a specialist agency once told his company that they received the payment by the client for the campaign released, but held back their payment saying they would pay the media owner only if they received more discount.
Also, many times, purchase orders (PO) are sent to media owners after the campaign is done, with a price quoted and entered by the agency, without the knowledge of the media owner, so the absurdity is that the media owner doesn't even know how much he is going to receive for his own properties.
Vadhera of 141 Wall Street agreed to these charges, saying that most specialist agencies are guilty of this and it often happens. But he attempted to provide some solutions, saying, "Agencies need a norm on how to deal with clients, give them no more than 60 days credit. Also, you have to see to it that you get purchase orders (PO) before campaigns."
Pandey of Aegon Religare suggested that media owners blacklist such clients and next time they want to work with a media owner, he would get his money on time.
Balsara also brought up the subject of venture capitalists and fund raisers, asking where they are now and what has been their role in the past year. While many answered that these have disappeared, Chatterjee of JCDecaux said that private equity (PE) funding will come back. "It's not their mistake, they saw an opportunity and they invested monies. But the pragmatic approach will be that they will be back," he said optimistically.
Balsara asked all the panellists to respond to a question. "Let us assume that in 2008, the OOH market was Rs 1,500 crore, what is your estimate for the end of 2009?" While Chatterjee of JCDecaux and Sanyal of MOMS estimated that the market won't grow and will remain stagnant, Lakhwara felt it will grow to Rs 1,600 crore, while Lall, Hemrajani and Vadhera estimated that it will grow by 6, 7 and 10 per cent respectively. However, Pandey and Vora felt that the industry will dip by 7 and 20 per cent respectively.
While the general feeling at the OAC 2009 was optimism, another point that was raised repeatedly by many was that media owners need to come together, sit and talk as a body, build on systems and processes, address the industry's issues together, and also partner with specialists and authorities, who need to be more supportive.First Published : June 22, 2009