FICCI-KPMG-Report-13-FRAMES

09
Outlook for the year
The power of a billion: Realizing the Indian dream
Innovations take place when one keeps a close eye on evolving needs that
are on the verge of being articulated in the market. Some of the fundamental
questions that lead to innovation are - What do clients desire? What is
possible with technology? What is viable in the market place?
2012 witnessed brands across industries actively experimenting with
something new, something more creative and appealing - 3D cutouts of
Amitabh Bachchan on mobile vans for the TV show Kaun Banega Crorepati,
travel site Expedia’s launch campaign, a tailor made car of scrap at the
Mumbai airport for Volkswagen, Cycle to light up the Mysore Palace by
Vodafone, and the mall mountings for Spiderman on UTV Action, to name
a few. These innovations not only attracted eyeballs but made lasting
impressions as well.
However, 2012 was an uncertain year for the Indian outdoor advertising
industry, which had its share of highs and lows. Brand owners spent
approximately INR 18 billion 1 in 2012 on Out-of-home advertising which
approximates 5-6 percent of advertisement spends.
Rural consumption increased in most product categories – fast moving
consumer goods (FMCG), consumer durables, insurance, two-wheelers,
etc. While 50-60 percent of the outdoor budget was consumed by Mumbai
and Delhi alone a few years ago, there appears to be a marked shift to the
Tier II and III cities - the top 10-12 markets’ spend has over the last few years
reduced from 80 percent to 60 percent 2 . This trend is expected to continue.
Last year however was marred by a significant slowdown of GDP growth
rate in India, resulting from domestic factors as well as slowing growth in
Europe and China. As the outlook for overall growth continued to stay muted,
advertisers cut their spends significantly or directed them towards other
media.
159
OOH Industry
Size (INR Billion)
2006 2007 2008 2009 2010 2011 2012 CAGR %
(2007-
2012)
Outdoor 11.65 13.98 16.08 13.67 16.50 17.75 18.23 7.75%
Source: KPMG in India analysis and industry interview
01. KPMG in India analysis
02. Industry discussions conducted by KPMG in India
“
2012 has been a disappointing year, increased
fragmentation and a lot of impractical
regulations that impede business have taken
their toll on this medium in the last one year.
This is especially true in Mumbai and Delhi
which together account for a huge majority of
total spends that this medium sees. Bangalore
also has its usual bout of annual problems with
the regulations and steep increases in fees.
Digital everywhere else continues to languish
because of advertiser’s reluctance to share
space in view of only so much of exclusive
space being available to them in the same
location or in the same vicinity
“
- Indrajit Sen
Executive Director - IOAA and Promoter-Director,
Media, Analytics & Design P Limited
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