With marketing budgets grounded, advertisers are cancelling airport OOH deals. This, despite rates having fallen almost 50% in the last few months.
With marketing budgets grounded and fewer passengers taking to the skies, advertisers are cancelling their ad spots at airports. This, despite rates having fallen almost 50% in the last few months.
The drastic cut in fares announced by airlines on Monday and Tuesday notwithstanding, firms that sell airport ad space do not expect the situation to change for at least one more year.
Laqshya Media, JCDecaux and Times OOH are the biggest players in this space that had been on the growth trajectory until the recent slowdown.
The segment, which took off after the privatisation of the Mumbai, Delhi, Hyderabad and Bangalore airports, reported growth of around 20% per year.
Growth could now come down to single digit, according to Sudha Natarajan, chief operating officer at Lintas Media.
Spots outside airports which cost around Rs 20 lakh per month, are now available at half that rate at some airports. Real estate and financial services companies have cancelled most orders.
Manoj Madhusudanan, VP -business research at Evalueserve said: “Occupancy rates have gone down by at least 25-30%. This has caused significant pricing pressures for advertisers.”
Yuvraj Agarwal, chief operating officer, airports and ambient media, Laqshya Media, expects the industry to pick up by 2010. Laqshya’s occupancies have been hit by 50-55% in the last three months and it is now focusing on the FMCG and auto sectors.
Times OOH, which derives 70% of its revenues from airport advertising spots, is one of the hardest hit.
“We have increased our focus on pharma and auto sectors as they have big ad budgets,” said Robin Chopra, manager, corporate strategy and planning, Times OOH. The firm has been cautious about bidding for fresh projects and is waiting for the market to pick up.
An official at outdoor advertising agency JCDecaux, which owns the rights to all advertisements inside and outside the Bangalore International Airport, said the company has seen a 15-20% drop in real estate and financial services clients due to the downturn.
Lesser air traffic has also adversely impacted airport advertising, Laqshya’s Agarwal said. However, he believes that with airline companies cutting airfares from next month, traffic would pick up, thus attracting more companies to advertise at airports.
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