‘The biggest impact is on site quality’

While supporters of reverse suctioning view it as a mechanism for achieving cost efficiencies, critics argue that it has gradually reduced outdoor media to a numbers game, where the lowest price often wins regardless of the quality being delivered. 

The biggest casualty 

For Lekshumanan Annamalai, Co-Founder and CEO of Coral Media, the conversation begins with a simple question: what happens to quality when rates are pushed down by 50, 60, or even 70 percent? 

“The biggest problem in reverse auctioning is that site quality is not maintained,” says Lekshumanan. According to him, most reverse auctions are not being won through marginal discounts but from steep ones. “If the bid starts from 100, in the name of reverse auctioning they reach up to 60-70% discount in some cases,” he points out. 

When the site sold is not the site delivered 

One of the most significant challenges Lekshumanan highlights is what happens after the deal is won. “What we have seen in the execution of reverse auctioning is the site which is proposed in the first instance doesn’t go live. Unavailability is often cited as the reason and an alternative is pushed forward.”  But as Lekshumanan points out, the replacement may technically satisfy the location requirement, but the visibility can be dramatically different. “The alternative could be a low-quality site, hidden behind a tree or a building.” 

The city remains the same. The locality remains the same. Even the latitude and longitude may appear similar on paper, but there is no qualitative value from the site. 

After all, OOH media is not a standardised commodity. Two billboards may occupy the same locality and offer the same square footage, yet deliver vastly different levels of visibility. 

The real loser is the brand 

The assumption is often that reverse auctioning primarily hurts media owners. Lekshumanan disagrees. “To a certain extent, media owners who have good-quality sites are getting impacted.” 

However, he believes the bigger problem lies elsewhere. “The impact is more on the client than on the media owners, because they don’t get the desired impact.” On a spreadsheet, the numbers may look impressive. The cost per square foot is lower. The inventory count is higher. The budget savings are visible. But according to Lekshumanan, none of those metrics answers the most important question: “Have people actually seen the billboard?” 

Why reverse auctioning discourages investment 

The impact doesn’t stop at campaign delivery. It also affects the willingness of media owners to invest in better infrastructure. As Lekshumanan points out, premium locations come with premium operating costs. Better structures require higher investments. Maintenance standards need to be maintained consistently. But when rates continue to be pushed down, the economics become difficult. According to Lekshumanan, the pressure becomes particularly evident in Tier 2 and Tier 3 markets, although he is quick to add that metro markets are not immune. 

OOH’s missing currency for site measurement 

One of the reasons reverse auctioning continues to thrive, according to Lekshumanan, is because the industry lacks a universally accepted site-rating framework. 

Certain formats naturally lend themselves to standardisation. “If you say bus shelters, all the bus shelters look alike. Bus shelters are a fixed currency. Bus panels are a fixed currency because there is no variation. But Billboards are a completely different proposition. In the same location, you can get a billboard for Rs 10 lakh and another one for Rs 2 lakh. The former will draw much greater visibility — 90% of people travelling on that road will see it. The same is not true for the Rs 2 lakh site.” 

He acknowledges that organising a fragmented industry is not easy but believes industry bodies could potentially play a role in bringing greater standardisation to site quality evaluation. 

Not every category buys OOH the same way 

Interestingly, Lekshumanan also points out that attitudes towards reverse auctioning vary significantly across brand categories. Real estate, for instance, approaches outdoor media very differently. 

“For the real estate industry, billboards are the most important media.” As a result, site selection is far more rigorous. “None of the real-estate clients look at square-feet rates because they know the importance of the media.” Automobile brands, he says, also tend to take a more balanced approach. 

The solution has to come from the client side 

Lekshumanan believes the solution ultimately lies with advertisers. He feels that for meaningful change to occur, brands need to fundamentally rethink how they evaluate outdoor plans. 

“Brands should do a qualitative analysis of the plans.” The current obsession with numbers, he believes, is creating a distorted view of value. “Everything today is driven by quantitative analysis, and this misses the very purpose of outdoor advertising,” he sums up.