Pitch Madison Advertising Report 2016 shows OOH growth at 14% in 2015

The recently launched Pitch Madison Advertising Report 2016 pegs the total growth in OOH at 14% in 2015 but predicts a decline to about 13% in 2016. But of much greater concern is the falling graph when share of OOH is plotted against total media spends (both data from the same PMAR).
 
The impact of this can be better understood when one realizes that 1% would mean about Rs 513 cr of OOH revenues.

So, while OOH is now at a respectable Rs 2,665 cr, its position in the overall advertising media firmament is slipping. Even if it had retained the share it had in 2013, 2015 would have seen the revenues at Rs 2,771 cr – about Rs 106 cr more than actual.

Further, digital and mall advertising form about Rs 300 cr out of the Rs 2665 crs, as against Rs 100 crs in 2014 – which means traditional OOH revenues grew from Rs 2233 crs in 2014 to Rs 2365 crs in 2015 – a mere 5.9% growth.

This, therefore, is the crux of the matter: dwindling growth and dwindling market shares for traditional Outdoor Advertising.
 
Sources of revenue
Retail, Real Estate and Automotive have ruled the list of OOH spenders in the last few years. The highest growth was in the e-commerce category (110%) followed by Automotive (66%), both together, contributing 60% of the overall growth. The usual big spenders – TV channels, Banks, Print Media, Mutual Funds, etc., reduced their OOH spends in 2015. FMCG, which is the largest contributor to TV, Print & Radio does not use OOH substantially except perhaps HUL, therefore FMCG contribution to OOH is only 7%.  In terms of city-wise spread, Mumbai continues its lead as a major contributor (22%) followed by Delhi (19%). Bangalore replaces Kolkata as the Number 3 city with a contribution of 10%. Hindusthan Unilever, LIC, SBI, Maruti and Airtel are the top five advertisers in this medium.

Sam Balsara, Chairman, Madison World, says, “Our prognosis for 2016 is that it is going to be yet another good year for (all advertising) Media, keeping in mind the GDP growth, purchasing power of rural India  and the fastest growing Indian economy. Although Indian businesses have expressed concern that all the positive actions taken by the Govt. have not resulted in growth on the ground, we feel that India Inc. remains very optimistic about India’s future and they will once again invest heavily in advertising to protect and gain market share as well as to launch new brands and variants.

But, the question all stalwarts in the industry must ask themselves, “Will Outdoor Advertising be part of this growth story ? If not, what needs to be done to bring it back into the story ?