FICCI-KPMG-Report-13-FRAMES

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162 The power of a billion: Realizing the Indian dream © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. -- Lack of adequate security measures One of the major challenges facing the industry is the lack of security measures, particularly in the street furniture and transit media formats. This not only delays campaigns and creates execution challenges in these mediums but also adds to the overall cost. The silver lining With Foreign Direct Investments (FDI) in retail gaining approval from the Central Government, there is expected to be a spurt in the retail business spend in advertising. Therefore, OOH will also garner a fair share of the advertising pie, as the medium is very well suited for the retail business. This factor will also help retail communications firms and specialised shopper marketing agencies to grow roots in Indian markets. The integration of OOH advertising with other media has led to an increase in its relevance. This has resulted in an ‘integrated media’ approach being adopted both by advertisers and media houses. The upswing in spends by brands in retail communications has benefitted the OOH industry. For example, a retail chain, Pantaloon India, struck a deal with the radio network Big FM - to air its programs in stores across the country. Big Bazaar has a monthly in-store magazine - My World, store window displays, ads on walls, floors, ceiling-high banners, kiosks to run promotions for advertisers, television screens and, more recently, piped-in radio stations. This assists the OOH segment, which is still at a nascent stage, to improve its share in the overall OOH ADEX pie. As these kinds of integrated campaigns and innovation takes hold, OOH has immense potential in terms of customer involvement, interactivity and last mile conversion in the future. Also, the trend is visibly moving beyond traditional arterial roads to a more demographically targeted destination-based planning that is mapped with target group movements. With increasing working population and changing lifestyles, people are spending more time outdoors leading to exponential growth of the transit medium. This medium delivers greater frequency cost - effectively, making it attractive to planners. Further, businesses going beyond borders and cheaper air travel has translated into more avenues for targeting upwardly mobile audiences on the go. Local transit media is also welcoming branding and interactiveness around communication exercises. Digital to drive OOH growth in India Digital out-of-home (DOOH) refers to dynamic media distributed across place-based networks in venues including cafes, bars, restaurants, health clubs, colleges, arenas and public spaces. DOOH networks typically feature screens, kiosks, jukeboxes and jumbotrons. DOOH also includes stand-alone screens, kiosks, and interactive media found in public places. Global Advertisers, an outdoor agency, analysed industry data, interacted with industry experts and carried out research to conclude a series of predictions: • Digital sites will not simply replace static sites, but will create additional levels of consumer reach. • Two broad OOH sectors will emerge: Broadcast and Targeted. The Broadcast segment will include large numbers of well-positioned static sites and premium digital sites. The Targeted segment will include national networks of digital sites capable of time-flexible distribution and real-time reactive campaigns. • The deployment of national digital poster networks in proximity to retail locations and the integration of day-part flexibility; real-time planning and new audiencebased trading systems will unlock the potential to drive ‘smart’ retail promotional marketing. • OOH will develop a symbiotic relationship with mobile marketing and internet based campaigns, opening up new revenue streams. Content will play an increasing role in OOH media and billboards are likely to become a distribution point for digitized news and entertainment content. Rather than being a disruptive force, digital technology is expected to create enormous opportunities for Out of Home media. “ The OOH industry will move up the value chain and will no longer be seen as a residual or commodity media. Creative bespoke for Outdoor, planning and strategy becoming important cornerstone and will replace excel planning for outdoor campaign, as clients will demand this from Outdoor Agencies “ - Sanjay Pareek CEO, Percept Out of Home
The power of a billion: Realizing the Indian dream 163 Looking ahead It is expected that the OOH industry will move up the value chain and will no longer be seen as a mere residual category. MRUC has embarked on a new IOS, so that the outdoor industry can prove to brands that their investment yields result from outdoor media and it doesn’t remain just emotional acceptance of outdoor. This coupled with the IOAA’s announcement of ADEX and online data of assets across markets will help improve the credibility of the OOH media. Further, e-commerce companies have recently been showing a lot of interest in OOH advertising. They seem to have realized that to reach a wider audience, especially consumers with limited access and/or exposure to the internet, they need to be ‘in the face’ through effective use of OOH. Flash mobs will also gain popularity in the market as brands will use this as a means of engaging with youth, though the extent of their success will depend on whether they are able to get permissions from the local government bodies. Another gradually emerging trend is the treatment of the out-of-home media segment as an independent medium, with specifically created ads and as opposed to adaptations from the print or TV content. This will help improve stickiness and better leverage for this medium. Activation is also gaining popularity and importance as a medium, especially with the spurt in the number of malls. Moreover, in Tier II and III cities, activation provides a totally new experience, attracting potential customers to experience products before they invest in them. These trends will emerge in 2013 and beyond. If the industry builds upon the gathering momentum , makes strategic investments and stays committed to improving trade practices, OOH in India will quickly become a ‘musthave’ for both global and local advertisers. OOH Industry Size (INR Billion) 2012 2013P 2014P 2015P 2016P 2017P CAGR % (2013-2017) Outdoor 18.23 19.32 21.06 22.96 25.02 27.28 8.39% OOH industry size (INR Billion) Source: KPMG in India analysis “ I am looking forward for a great 2013. A year where I want to see two seasons of Diwali, one in Q2 and the other in Q4. The OOH space may not see some great shakes and moves in terms of new options/media coming up. If the industry were to go ahead and have a intended 7 per growth it will be a good news for the year. Telecom and Automobile should keep the trend in OOH going with few new launches. I am very hopeful for retail and government/tourism departments to play a positive role for 2013. Here is wishing every one a positive innovative year ahead. “ - Mandeep Malhotra President, DDB Mudra Max © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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FICCI-KPMG-Report-13-FRAMES

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