afaqs!

Noida Extension takes a toll on advertising

By Anushree Bhattacharyya , afaqs!, New Delhi | In Marketing | August 02, 2011
Many realty brands, which were once heavy spenders on OOH and print, have taken a backseat in the last few weeks since the controversy erupted. Industry observers estimate that the print and OOH sectors have taken a hit of Rs 8-10 crore.

Newspapers' property supplements have grown thinner in the last few weeks. Vacant hoardings in and around the capital city have also become common. The controversy around Noida Extension is slowly taking its toll on the advertising circuit in the NCR (National Capital Region). Print and OOH (out of home), which received heavy advertising from the real-estate players, are slowly feeling the heat. According to industry estimates, the print and OOH players have seen a dip of Rs 8-10 crore each in spends.

OOH advertising in Delhi garners about Rs 400 crore annually, and realty brands contribute around Rs 175 crore to this figure. Noida-based projects were high on agenda for these realty players, and 50 per cent of the total spends were for these projects.

However, there hasn't been any immediate effect on the cash flow so far. A senior official at Selvel Advertising, an OOH firm, explains that no new bookings are being made by real-estate companies, and long-term deals of three months are being cancelled after the recent fiasco.

In fact, the problem around the Noida-based projects has also discouraged the realty players to advertise for other projects as well. Some big players in the space have reduced their ad budgets by 40-50 per cent.

The effect on the print industry has also been similar. There was a time when power jackets on newspapers were often taken by the real-estate brands. Together, these brands spend around Rs 200 crore annually on newspapers. Now, with the controversy, the advertising has been negligible, which has again resulted in losses in the region of Rs 8-10 crore.

A senior media observer says, "The industry was trying to recover from the telecom setback after the 2G scam as telecom players had cut down on ad spends. To top it, the realty fiasco has further burdened the print and OOH players."

Debraj Tripathy, chief operating officer, MediaCom says that while the current situation has had a major effect on print and OOH, the radio industry isn't untouched, either. "A lot of these players also advertise through radio as it's a local medium providing them with a deeper reach."

However, top media agencies are optimistic that this is only a short-term phase and real-estate will bounce back once again within months. Tarun Nigam, executive director, India, North, Starcom Worldwide, remarks, "The real-estate category, which is going through a tough time, will start spending once again during the festive season."

Agreeing with Nigam, Sunder Hemrajani, managing director, Times OOH, states, "There are no doubts that there has been an impact on advertising. Nevertheless, this period of uncertainty is a temporary phase and it's only a matter of time before the category jumps back into action."

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