OOH media on a digital quest

BANGALORE: With Bangalore becoming the third city after Chennai and Delhi to see a ban on hoardings, it is now a survival quest for out of home (OOH) media players.

Already weighed down by digital competition, the industry feels these bans could eventually sound a death knell for the genre.

Thus, the players in this sector are now shifting from traditional hoardings to other forms of outdoor advertising such as digital signages like LEDs and LCD screens. However, industry experts feel this may eventually wipe out the small players in the hoardings business, which is largely an unorganised sector.

Accord Advertising Pvt Ltd, an OOH media company, said the Bangalore ban has impacted its overall revenues by around 15%.

Sudeep Ganguly, director of Accord Advertising, said, “We fear that the traditional OOH media might completely get wiped out.”

The occupancy level of the company's hoardings in Bangalore has come down to 60% in 2008 against 90% in the same period last year, he said.

Ganguly, however, said despite the slowdown, the OOH media was still growing at 20% and according to industry experts is one of the fastest growing  mediums after radio and internet  advertising.

He said the current conversion rate from static hoardings to digital was mere 7%-10%. “However, digital will be the future of the industry in the next five years. The ratio of digital advertising versus traditional hoarding is likely to be 60:40,” Ganguly said.

Serve & Volley Outdoor Advertising also believes that OOH's future would be LEDs, a form of digital advertising .

Raj B Bhattacharya, assistant vice president — business development, Serve & Volley Outdoor Advertising, said the company was confident of growing its digital LED business. “Revenues from billboards will be replaced by LED and ambient media,” he said.

Serve & Volley, he said, was in talks with Hyderabad-based LED manufacturers for its digital business.

Bhattacharya said currently there was a slowdown in the OOH space. “But we expect an upturn soon,” he said.

Satyabrata Das, senior vice-president (product strategy sale), Laqshya Digital Media, also believes that digital is the future for OOH firms.

“Trajectory growth in the media is expected. We will push our LCD business,” he said.
The company has set up around 600 digital screens in technoparks and offices across the country and is investing in R&D for the big screen, he said. The company expects to double the number of screens by the end of this year, he said.

PricewaterhouseCoopers projects the digital advertising revenues to reach $153 billion worldwide by 2011.

According to advertisers, a typical LED or LCD display screen will cost somewhere around Rs 2 lakh, whereas the static traditional hoarding costs between Rs 50,000 and Rs 1.5 lakh. The cost difference varies between 35% and 40%, depending on the booking period.

Currently, the digital mode of advertising is growing at 15-20% year on year. Malls, tech parks, office space, railway stations and bus stands are the most favoured locations for digital LCDs or LED signages.

After street hoardings were banned in Chennai and Delhi, malls are now the only options left for advertisers to put up LED or LCD screens.

According to Marketingweb, half of the media executives polled in Accenture's Global Content Study 2007 said advertising, driven by growth in digital media, could become the most prevalent business model for media firms in five years.

Traditionally, media revenues have been split between end-user spending (65%) and revenue from advertising (35%). End-user spending is defined either as subscriptions to media or buying media off the shelf.