Mumbai: Asure barometer of a dipping economy is gaping spaces on prime billboard sites and slumping ad spends in the outdoor medium. In 2002, crumbling economic indices sparked by a tech meltdown saw street furniture—as some outdoor media vehicles are called—bereft of high-profile brand loungers.
Rocky 2008 is replaying that tableaux of vacant billboards at some prime sites across metros. Some outdoor ad budgets are being slashed by 15-30%, average occupancy rates are down by about 30% and outdoor ad rates are starting to drop in tandem, say media observers.
Few takers: A billboard near the Bandra flyover in Mumbai. Sectors such as financial services, airlines and automobiles are expected to slash their outdoor advertising spends by 15-20%. (Photo: Abhijit Bhatlekar/Mint)
It is a far cry from euphoric figures touted just last year at industry meets that the out-of-home (OOH) segment is expected to grow from Rs1,000 crore this year to Rs2,150 crore in 2010, growing at a 17% gallop.
“Rising input costs such as fuel and an increase in interest rates are impacting automobile companies, financial products, petroleum products, etc. They are cutting marketing and advertising budgets. Outdoor is of course a part of it,” says Anuj Kanakia, deputy general manager at the Mudra group.
No surprises there since big outdoor spenders such as financial services firms, auto makers and airlines are the categories directly hit by inflation and economic roil.
“Outdoor advertising accounts for 8-10% of our overall ad spends,” says Kanakia. “Categories such as financial, airlines, petroleum and automobile clients could cut outdoor spends by 15-20%. Many of the airlines are also delaying launch plans, which is affecting outdoor spends. There’s a similar case with cars, with EMIs (equated monthly instalments) going up,” he adds.
The mad scramble for prime sites spots is giving way to easier availability. Kanakia says earlier no premium locations were available. Today many of them are going blank. One can now get sites on Mumbai’s once heavily booked Mahim Causeway a lot more easily, he says.
An OOH site is booked normally for a month, and a site on Mahim Causeway could cost as much as Rs10-12 lakh a month. If the slowdown continues, it could be available for Rs8 lakh, Kanakia says.
Sanjay Shah, chief executive of Navia Asia, the OOH and ambient media unit from the Starcom MediaVest Group, says that in 2002, ambient media was seen more as an “afterthought” medium. With people spending more time out of home, sectors such as telecom, banking, finance, and TV channels started investing heavily in outdoor.
“However, as was seen in 2002, any slide in the economy is also likely to have an impact on advertising spends and among all media, out-of-home spends are the first to get axed.” Shah says.