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Outdoor advertising: A display of recovery


Out-of-home advertising is recovering on the back of new digital capabilities and the return of big spenders

The outdoor advertising sector is finally inching towards recovery, with industry players expecting 2022 to mark its revival. Four months into 2022, and the OOH (out-of-home) segment’s recovery in India has been substantial, with citizens and vehicular traffic back on the roads. According to a recent Pitch-Madison report, OOH advertising recorded billings of a healthy 3,495 crore in 2019, followed by the 2020 slump where it fell to1,292 crore, with a semblance of recovery in 2021, at 2,178 crore. The report estimates this figure could touch2,955 crore in CY22.

Imtiyaz Vilatra, country head for Posterscope India, notes that brands in the fintech, e-commerce, OTT, real estate and hyperlocal services categories are currently the big spenders in OOH advertising. Other categories eyeing this space intently are auto, mobile handsets, consumer durables, IPL teams and tech businesses. Some of the factors driving the sector’s growth are increased consolidation among media owners and higher adoption of the relatively more premium properties of digital OOH.

Tech leading the way

According to Atul Shrivastava, CEO, Laqshya Media Group, the OOH segment may register a 12-15% growth in FY23, as compared to pre-Covid levels. “At Laqshya Solutions, we expect to reach pre-pandemic levels in Q1 of FY23 itself, and are looking at an ecosystem where we can sell 80-90% of our inventory,” he adds.

The pandemic pressed the reset button in the industry, encouraging investments in technology-led media measurement in OOH. That pivot has worked. “There have been considerable investments on technology such as large format outdoor screens and curved screens, delivering experiential communication, which sets OOH apart from other media,” observes Satyen Sharma, head, OHM, Ormax Media.

In CY21, digital screens increased to 60,000 from 55,000 in CY20, as per the recent Pitch-Madison report. Digital outdoor spends also increased to 300 crore last year, up from50 crore in 2020. However, while digital OOH in India has a 13.7% share in the total outdoor ad segment, it is still far below the corresponding global average of 40%.

Comeback story

The recovery process for outdoor advertising will be on a fresh footing, considering that the pandemic reduced the industry to nearly half its size back in 2020. Industry experts say OOH saw a massive 50-55% slump in the first half of that year, when the pandemic struck, while 2021 saw a 69% increase in outdoor advertising revenues, even though the industry still fell short of pre-pandemic billings.

While several OOH players are confident that the industry will reach pre-pandemic levels during CY 2022 itself, Sanjeev Goyle, CEO, OOH and rural, IPG Mediabrands India, remarks that the industry will not see complete recovery until FY24. “To reach pre-Covid levels in a year’s time, the medium will need disproportionate spends in the media mix. Irrespective of the pandemic, an advertiser usually allocates a smaller fraction of the ad budget on OOH, so limited budgets are definitely a key challenge,” he points out. He expects the sector to grow by 20-25% this year — that is, reaching 70% of pre-pandemic levels — assuming there is no Covid disruption. Rural markets will also play a key role, with consumer demand bouncing back and with a good monsoon forecast this year.

In CY21, as much as 70% of the OOH spends came in the second half, with the last festive quarter accounting for 41% of the year’s spends. While the conventional OOH market grew by 63%, transit media grew by almost 100% in CY21, a growth that is attributed to the rising passenger traffic in the country’s key airports.

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