"I expect OOH industry to clock 12-13% growth"
By M4G Bureau - May 18, 2016
Suresh Balakrishna, CEO for India, the Middle East and South Asia, Kinetic Worldwide, shares his perspectives on the Indian OOH industry in an interview with Outdoor Asia.
Could you walk us through your first three months in Kinetic Worldwide?
It has been an exciting three months of which I spent the first six week travelling. I attended our global meet in New York, another meet in London, followed by a quarterly review meet in Shanghai, and a visit to Dubai where we are setting up our office. What has impressed me most about Kinetic is the kind of investments that Worldwide is making in this business. Kinetic has some 1,000 people worldwide thinking OOH. It is a very forward thinking business.
What would be your strategy in your current role?
It is a lot easier to lead a new company and make it larger than to get onto a large organisation and make it bigger. Having said that, there is a lot of business out there. My focus is going to be on differentiating Kinetic, especially in the digital space, in terms of ideas and innovations, and in developing new media. Besides, more and more clients are now coming into this business, and that growth will also fuel the industry, and of course, Kinetic.
Would you put some numbers to your growth expectations?
This year we expect to grow our topline billing by about 20%.
Digital OOH is at a nascent stage in India. How do you plan to grow in this space?
Currently, less than 10% of the total OOH inventory in India is digital, so there is scope to expand this infrastructure. Moreover, the existing digital OOH is largely concentrated in controlled environments like malls, airports, etc.
I don't think we are making the best use of digital media in the airports. I believe, in the airports you can get permissions to go digital in many different ways. Clients too need to be convinced about the efficacy of such initiatives. At Kinetic we keep doing new things, like what we did for Google at different malls during the T20 World Cup. We put up the whole infrastructure that enabled us to run live feeds and tweets on digital screens. Essentially, I see two ways to leverage digital. One is to create digital media and use it, and the other is to integrate the existing media with digital technologies. In the absence of common measurement metrics we can use surrogate measures like the Social Amplification Score (SAS) that we have launched.
The SAS software, developed by a company called Fuel, picks up any kind of buzz in the social media around your OOH campaign. The software works on the basis of some 39 keywords that you use in your tweet, facebook or Instagram. It immediately picks up and generates an SAS. This works wonderfully well in the case of OOH innovations. There is also the CEE App, an application that makes your billboard interactive. The CEE App can be built into any mobile app and with that a mobile user can scan a billboard, bqs and the like to know about a special offer linked to the campaign, access to the client's website, information about the brand's nearest dealer outlet, and so on. You don't need a QR code in this case.
The CEE App has been developed in our New York office with the help of a company called CEE. We launched the app worldwide three months ago. This way you can turn static billboards into interactive media without having to set up digital infrastructure.
What are the typical challenges in making content and displays for digital OOH?
The challenges are not many. You need to have access to content like Bollywood, cricket, etc., around which you can build your communication. The content should be such that it connects with the mass audience. At Kinetic we created digital content for Audi by amalgamating perhaps 5-6 different things. Content is freely available but you need to creatively put them together.
Are clients willing to pay for such content?
Well, I don't ask them for a shoot in South Africa! Instead, we create very economical content and we make it look good.
What about syndicated research? Are clients not asking for research and metrics?
In the three months that I have met with clients, no client has asked for syndicated research or measurability. One reason could be a resigned acceptance of the fact that it won't be available. Or, clients may have their own measurement systems - some surrogate measures. Or, it could be an innate feeling that this medium works for me.
Does this industry require syndicated research and who should be investing in it?
There is no going away from the fact that the industry needs syndicated research. Having said that, the only way it will work is through a collaborative way. The top few agencies, media owners and clients will have to get together and invest, just like the BARC model. The percentage share of investments may vary but the investments will have to come from all three parties to ensure the objectivity of the surveys and studies. By investing in research, each constituent will have its representation on the board and have a say in the way the research is conducted. Objectivity will lead to higher acceptability of the research. If it were only the top media owners that invest in the research, there would be a degree of scepticism on the objectivity of the work.
Will developments like the ban on plastics and flex in Karnataka affect the OOH business in a big way?
That is a matter of regulation and am sure the industry will come up with alternative materials. I see no imminent threat to the industry. If PVC is not permitted, then the industry will perhaps find and use alternative materials like superior quality paper that is used in Europe.
Does clutter in the outdoor bother you as a buyer?
Clutter reduces the impact that clients wish to make in the outdoor. It also destroys the beauty of a city. If clutter is not checked, the industry could face a Chennai like situation in other markets. TV faced this some time back and once the issue was addressed per minute costs shot up. Likewise, if clutter in the outdoor is tackled, unit cost of OOH will also go up.
At Kinetic do you have a system to filter out unauthorised media?
First of all, we deal with only those entities that have a standing in the market. Second, we have a rigorous vendor registration process. It is very detailed, including physical checks of vendor office, etc. But it is difficult to have checks on every single site across the country. So we are hit by some surprises once in a while.
What are your expectations with regard to OOH industry growth?
I expect OOH industry to grow by 12-13%. Studies like the Pitch-Madison report are limited to billboards. I believe that growth will come from controlled environments like airports. The number of malls are increasing, and the quality of media will also improve. That will drive industry growth. As of now the growth numbers are underquoted. The definition of OOH is very limited in the surveys that are released.
What steps would you advocate to strengthen the industry's image?
A good image comes from intrinsic integrity. This industry is not considered high on integrity. Every agency will have to introspect and take a call on what businesses they wish to serve, the kind of clients they would want to handle, the media vendors they would want to deal with, and the like.
It is not that the mainline industry does not have its share of dodgy business, but the issues seem more apparent in the OOH because they are more rampant there. Hence, every agency, every media owner and every client will have to come together to bring in greater transparency in OOH business. The industry needs an industry body with a voice. The IOAA is moving in the right direction. I would add that more visible demonstration of use of technology will also help the OOH industry.
In your view, which overseas market is comparable with India?
China, most definitely, although the OOH market there is huge. For instance, the annual billing of Kinetic China alone is bigger than that of the entire Indian OOH industry.
What factors have contributed to OOH growth in China?
China has focused a great deal on infrastructure, which has not happened here. They have created so many new opportunities for brands to interact with consumers. For instance, a metro station in China will provide so many opportunities in a clean, well laid out manner. They have also made large investments in digital OOH. As a case in point, at road crossings in Shanghai you will come across such nice large digital billboards.
In India, media owners maintain that agencies prefer to buy billboards over transit media even in places like Delhi where infrastructure is well developed?
That has to do with traffic. If I have to look at a reach medium, I will go for billboards. The wastage is high, but billboards guarantee reach, whereas niche media provides frequency. That difference in approach will remain.
In recent years, several new specialist agencies have come up. In your view, what would be the net impact on OOH business?
New agencies will look for business everywhere and as a result they will evangelise the medium a lot more. But if they have investor money and are governed by compulsions to show rapid topline growth in a short span of time, they are likely to take desperate measures that might cause some damage to the industry as a whole. Meanwhile, large agencies will have to keep demon.