R A Rajeev, the additional municipal commissioner of Mumbai, is on a mission to give Maharashtra’s capital a makeover by the time his term ends in a year. He has changed the guidelines for outdoor media. All hoardings in the city are now supposed to be of a certain size and quality, and installed only at specified locations.
More recently, Rajeev has invited expressions of interest from out-of-home (or OOH, the preferred moniker for outdoor media these days) companies for street furniture contracts, and shortlisted six. “If Mumbai is striving to be an international city, its street furniture quality has to be world-class,” he says.
By street furniture, Rajeev means signages, information kiosks, benches, dustbins, public utilities, bus shelters and much else. “The city must be made user-friendly,” he says. And he is not done yet. On the agenda are sky walks — the kind that Mumbai Metropolitan Regional Development Authority, or MMRDA, has built for people who alight from Mumbai locals. “A three-year term may not be enough to overhaul the city, but, at least, the process cannot be reversed,” says Rajeev.
Mumbai is not the only city that has kicked off the process of developing civic amenities and infrastructure. If you are living in any of the top 20 Indian cities, chances are that you may soon witness its transformation into a clutter-free, aesthetic place with a clear skyline. If you are in a metro, you may even have the pleasure of stopping by at a smart newspaper reading station to flip through the papers, or at a kiosk that displays the city maps and information about its hot spots.
Back in 2005, New Delhi Municipal Corporation invited bids from Indian and international OOH companies to revamp bus shelters. European major J C Decaux won the mandate to put up 197 bus shelters in the city on a build-operate-transfer basis. In lieu of an investment of nearly Rs 36 crore, J C Decaux Advertising India Pvt Ltd got the media rights to these properties for 15 years, which it exploits to recover the money. The bus shelters were completed last year.
In this era of frenetic infrastructure building that has been unfolding in the country, the common thread across cities is the role of OOH media. At times it gets rearranged and reined-in, but in most cases it is getting embedded into infrastructure projects to make them financially sustainable. And yes, OOH is also raking it in.
OOH and the cityCity development in India is riding on the back of advertising support from OOH media companies. Local governments and municipal bodies have discovered value in making outdoor companies invest in basic infrastructure development in lieu of the media rights to those properties, a standard practice in much of Europe, the US and Singapore.
“In the developed world, OOH is at its zenith. There are clear regulations in place and importance is given to street aesthetics,” says Rabe T Iyer, business head, Big Street, the outdoor media outfit of Anil Ambani’s Reliance ADAG. In Mumbai, Big Street won the rights (for about Rs 80 crore, says grapevine) to use the advertising space along the 1.2-km Bandra Sky Walk.
Pune, Chandigarh and Bangalore are calling outdoor companies for street furniture contracts. That’s not all. Cochin and Goa have invited bids for media rights at airports. Times OOH, the outdoor media company of Entertainment Network India Limited, won the rights to the Mumbai and Delhi airports for over Rs 300 crore.
Clearly, OOH action is gathering momentum. Even as city municipalities push their infrastructure projects through private-public partnerships with outdoor media companies, national and international players are pumping money into the sector. Projects worth Rs 1,200 crore to Rs 1,400 crore are being picked up by a host of Indian companies such as Big Street, Laqshya and Parivartan City Infrastructure Ltd, as well as foreign players like Stroeer, ETA Star Holdings and JC Decaux.
Seeking scaleSuddenly, OOH is acquiring scale and emerging from the margins of advertising. “The conventional outdoor media has changed thanks to the entry of organised players. Valuations have been introduced into this game and companies are talking scale. The sector is shifting from advertising to infrastructure support industry like street furniture and transit media (read buses, airports, trains, metro rail and taxis),” says Stroeer OOH Media CEO Indrajit Sen. JC Decaux’ managing director Pramod Bhandula agrees: “Till now, the outdoor was not of any utility to any one. That seems to be changing.”
On the one hand, big media owners — companies that own the assets or properties where advertising is showcased — are jumping into the fray; on the other, new media planning and buying agencies (they do not own assets) specialising only in the outdoor are proliferating.
Pradeep Guha’s newly-launched Street Culture rubs shoulders with established players such as Ogilvy Action, Portland India, Primesite, Platimum Outdoor and MOMS, among others. Havas group launched MPG Active just three months ago. Starcom Mediavest, which has been operating Navia in India for three years, is ready to launch two new outdoor agencies. “Serious money is coming into the outdoor, which is seeing a healthy growth,” says Navia CEO Sanjay Shah.
Industry estimates on the size and growth of the industry vary. Agencies peg the size between Rs1,400 crore and Rs 1,900 crore with an annual growth rate of 25-30 per cent.
The key triggers for the changing outdoor scenario are easy to identify. High spending in emerging sectors such as telecom, media, entertainment, real estate, retail, financial services, banking and insurance have used the outdoor media in a big way.
The retail and consumer boom has helped. “Consumers spend an average of four hours a day travelling, shopping and eating at out-of-home consumption spaces like airports, shopping malls, restaurants and multiplexes. The importance of media at these spaces is increasing,” says Partho Dasgupta, the managing director and CEO of Kishore Biyani’s ambient media company, Future Media Ltd. Laqshya Outdoors’ CEO Soumitra S Bhattacharyya agrees: “Outdoor has become OOH. It’s no longer about where the media is, but it is where the target group is. Ambient media — malls and multiplexes — options at airports, transit media and street furniture are now available to engage the target group.”
Arup Dutt, executive vice-president at Parivartan, the outdoor media agency of Jindal Stainless, believes that digital technology and a certain degree of standardisation are driving growth. Most municipal bodies are standardising their outdoor media guidelines. Mumbai, Delhi and Chennai are regulating hoardings. Most cities have mandated billboard and unipole sizes and locations. There is an effort to measure the medium with MRUC (Media Research User’s Council, which brings out the Indian Readership Survey) driving a pilot project to monitor the efficacy of the outdoor.
Municipal bodies are offering contracts of 5 to 15 years to enable companies to recover their investment.
“There is a sense of security in doing business with the government,” says Parivartan’s Arup Dutt. Big Street, for instance, is working on the Bandra Sky Walk and pole kiosks on the Airoli bridge in Mumbai, and inter- and intra-city buses in Chandigarh. It also has the media rights to some of Delhi Metro Rail Corporation stations and mobile vans in Hyderabad.
ETA Star Holdings LLC, with operations in 40 countries, works in India under the Landmark brand name. It has won the tender to build modern bus shelters in parts of Chennai. “They have safety features, proper lighting, stainless steel railings, seating facilities and rain water collection facility,” says Manikandamurthy, executive-director with ETA Star. The project has five years to recoup the investment.
Laqshya is working on 26 projects in India and abroad. J C Decaux is one of the bidders for the Mumbai street furniture project and has already won the media rights to the Bangalore airport. “We hope to break even in 7-8 years,” says Bhandula.
Times OOH has bus shelters in Mumbai, Bangalore and Hyderabad. “We are bidding for the Cochin airport as well as street furniture in Delhi and Chandigarh,” says Sunder Hemrajani, the company’s managing director. The company has the rights to bus shelters on New Delhi’s BRT corridor and 21 stations of Delhi Metro.
Is it for real?Are advertisers biting? The legal sites cost more than double what companies paid for illegal hoardings earlier. However, advertisers eager to break the clutter are happy to reduce waste through the outdoor, which is still the most cost-effective medium. Hemrajani claims that luxury brands are buying into airport media properties to catch the affluent customer. “The Jet terminal is quite popular with advertisers because of its ambience,” he says.
Partho Dasgupta rubbishes the theory that ambient media will not give returns any time soon. Brands like UTI Mutual fund, HDFC Standard Life, ICICI Bank, Times Now, UTVi News, Zee TV, Lakme , Kingfisher Airlines, Sunfeast Biscuits and Godrej Consumer Products are already on board Future Media’s television screens. “Initially, the money for the outdoor was allocated from a company’s below-the-line budget. That has changed. It now comes from the above-the-line media budget,” says Dasgupta.
The advertisers’ response seems positive also because they are happy to deal with large professional companies rather than the small, mom-and-pop outfits that dotted the skyline earlier. However, OOH is yet to become a part of compulsive media planning. It is barely 7 per cent of the total advertising spend in the country.
There are other challenges. The new infrastructure-related outdoor projects are priced too high. Outdoor companies invest the capital, maintain the property, and also pay a licence fee to the government. For instance, Parivartan, which has put up bus shelters in the Municipal Corporation of Delhi’s areas for about Rs 15 lakh each, is also paying the corporation Rs 1 lakh a month for each shelter as the licence fee. This is on the assumption that it is making money from the advertising rights. The trouble is that while the outdoor company pays the government in advance every quarter, its own income from advertisers has a 120-day cycle.
Navia’s Shah says that often the town planners offer properties in a haphazard manner. “OOH must come in at the town planning stage. In India, it depends on the individual brainwave. If one sky walk works, 50 more will be planned.”
However, Ankur Rastogi, OOH expert and the managing director of MPG Active, is in tune with Mumbai’s additional municipal commissioner’s view that the process cannot be reversed. “Global eyeballs will be on India for the Commonwealth Games.”
6 months ago