FICCI-KPMG-Report-13-FRAMES

The power of a billion: Realizing the Indian dream 161
Formats
Billboards are on course to remain the medium of choice,
although other formats may gradually gain share over time.
Revenue split by various formats
Source: Industry discussions conducted by KPMG in India
The transit OOH business in India, especially in airports
and metros, has experienced rapid growth over the past
few years. Brands such as Hyundai, Tata Photon, Intel, ING
Vysa, Microsoft and others have been prominent. With
various airport modernization and new metro projects in the
pipeline, this format is expected to outpace other segments
with a CAGR of 11 percent 4 . Formats such as airport OOH
are well placed with a well-defined environment and, a
target audience which can be profiled more accurately.
Reflective of this trend, two stations of the Rapid Metro
Rail Gurgaon line (‘RMGL’) will be branded as Vodafone and
Micromax stations as the two telecom companies have
entered into a memorandum of understanding with the
operator, RMGL, for a full fledged branding exercise.
New channels such as bus shelters, LED billboards and
street furniture are not being leveraged as widely in India as
they are in other countries, where they form as much as 30
percent to 40 percent of the total industry 5 . This is primarily
attributable to poor infrastructure and the absence of a
secure environment (fear of theft or vandalism). Limited
customization of content to suit the medium is another
obstacle currently.
“
The transit segment continued to make
further strides. Digital OOH is paving the
way for integration of mobile and outdoor
advertising. The holistic development of
the medium is attracting new categories of
advertisers and augurs well for the future of
outdoor advertising
04. KPMG in India analysis
05. Industry discussions conducted by KPMG in India
“
- N Subramanian
Group CFO,
Entertainment Network (India) Limited
A step in the right direction
In the union budget for 2012-13, the then Finance Minister,
Shri Pranab Mukherjee announced that ‘selling of space or
time slots for advertisements other than advertisements
broadcast by radio or television’ will be exempt from 12
percent service tax’. While this service tax exemption freed
budgets for spending on campaigns, the industry did not
reap benefits due to impacts of the economic slowdown.
Another positive development was Media Research Users
Council’s (‘MRUC’) announcement of India Outdoor Survey
(IOS) next edition. Along with IOS, IOAA’s announcement
of ADEX as well as inventory availability information online
will help build confidence in the medium as well as increase
use of OOH not as residual media, but planned media.
The resurgence of media owner-led solution business has
been another noticeable industry move. All major media
owners are now focusing on direct clients. Also, there
is emerging consciousness amongst media owners to
limit on bidding for unviable tenders – eg. participation in
Amritsar, Guwahati Airport tenders was poor as the reserve
price was ambitious.
• Key challenges
--
Lack of unified common measurement platform
hampering the industry
Reliable research is crucial for the OOH industry,
but the measurement system has not taken off
as intended. MRUC’s announcement of the next
edition of IOS and indications of a couple of private
parties also taking this up, appear to be steps in this
direction.
--
Apathy of civic agencies towards outdoor media.
There have been widespread calls for tangible steps
to taken by civic agencies to ‘promote’ outdoor media
and not to ‘control’ it. Despite heavy license fees and
taxes, permissions from various authorities and lack
of clarity on regulations continue to create operational
challenges for the industry.
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with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.