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Mushrooming billboards offer a crash course on India’s growth

Mushrooming billboards offer a crash course on India's growth

Mumbai: On the ride from the airport to downtown here, which can take 30 minutes or three hours depending on traffic, international visitors often get a crash course in the Indian economy from the hundreds of bright billboards towering over this city’s sprawling slums.

Billboard after billboard, sometimes overlapping, pitch everything from Unilever face cream to Fidelity mutual funds to Samsung televisions and the latest Bollywood offering, Shakalaka Boom Boom.

As the economy booms, the billboard business is taking off, climbing more than 40% to Rs978 crore in the last five years, according to estimates by TAM Media Research Pvt. Ltd, a Mumbai-based media company.

While that still represents less than 10% of total Indian annual advertising spending of Rs16,300 crore, it is increasingly important for targeting urban India’s burgeoning middle class, who now commute by car and often find themselves stuck in traffic.

The explosion of interest in outdoor ads in India comes as marketers in other parts of the world, including the US, are putting more money into the medium as a way to reach consumers who are better able to avoid ads in traditional media such as television and radio. New technology has also allowed advertisers to create more sophisticated outdoor displays that can even transmit information to mobile devices. In 2006, advertisers put $6.8 billion (Rs27,880 crore) into US outdoor advertising, according to the Outdoor Advertising Association of America, up 8% from $6.3 billion in 2005.

In India, “business is awesome because the economy is growing", says Yash Gala, managing director of Zenith Outdoors, a billboard company that has expanded its stable of billboards to 350 from just 80 three years ago.

With its billboards in use 95% of the time, “we’ve never seen occupancy this high", he adds. Only four years ago, its billboards weren’t in use about 30% of the time. That increase translates into rising profits for billboard companies and higher prices for billboard space.

While print and television ads take up more than 80% of ad spending, advertisers say billboards are better for targeting specific sub-groups of consumers or particular neighbourhoods.

Targeted advertising is especially important in India, where diverse consumer groups with different languages, religions and income levels make it tough to build a brand across the country.

Billboards are used to reach both ends of the spending spectrum: the poor who don’t have televisions and don’t read newspapers, and upwardly mobile consumers, who typically spend hours stuck in city traffic in the back of chauffeur-driven cars.

Until recently, because the government only allowed a handful of radio stations, radio ads weren’t a good way to reach commuters. While regulations have eased, radio advertising is still only half the size of the billboard business.

“This is one medium that is at the take-off stage," says Siddhartha Mukherjee, a director at TAM Media, referring to billboards. “The usage of outdoor [advertising] has come to the forefront because ofthe complexity of the Indian market."

“In the US, you are driving, so you look at the car in front of you. Here you are often a passenger with a driver, so you are sitting in the back and looking around," says Devita Saraf, chief executive officer at Vu Technologies, a high-end electronics retailer.

He says the company has had more response from billboards in the better neighbourhoods in Mumbai than from newspaper ads. “In newspapers, you may want to reach only 2% of the readers, so it is 98% wastage."

Government restrictions, such as a ban on erecting billboards on old buildings, have held back growth in the industry. So, billboard companies are trying innovative ways to increase their presence.

Zenith Outdoors, for example, has helped develop a mobile billboard truck that parks, then hoists a billboard 20 feet on a pole and rotates it to face passing traffic. The company has 25 trucks that it can move to the places where they will capture the most eyeballs, near the train stations in the morning, around shopping areas during the day and then in the suburbs at night.

“You can reach the whole city with one billboard," says Gala.

To bring better billboards to rural India, where most advertising is still hand-painted on walls and fences, Gala’s company has developed a rugged vinyl they call the “wall tattoo" that can be glued onto rough surfaces, including concrete, bricks and wood slats.

With this new product, advertisers can bring large ads with the photos of movie and cricket stars who endorse the products to rural areas, where more than half of the country’s 1.1 billion populace lives.

The billboard boom could eventually be curtailed, however. The industry can expect increasing competition from radio stations: With relaxed restrictions on broadcasting, the number of stations is expected to soar to more than 200 in the next year from about 60 now.

Still, while television, print and Internet advertising are also growing, an increasing number of advertisers are discovering outdoor advertising for the first time.

“Hand-painted hoardings used to be the norm because labour was cheap and (billboard printing equipment) imports were not allowed," says Ashish Bhasin, a director of Lintas, India, which is compiling a computer database to help advertisers choose from more than 20,000 billboard spots across the country. “We are now playing a very fast catch-up game."

Brian Steinberg in New York contributed to this story.


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