The global pandemic and the lockdown which followed hit the Out Of Home industry hard. The billboards across the country were left empty with pandemic causing a considerable drop in OOH advertising spends. Even as Indian OOH set sights on accelerated business growth at the beginning of 2020, the Covid-19 pandemic wreaked havoc on the OOH business landscape, shredding to pieces the industry’s growth plan. According to the industry experts, OOH Industry was severely affected by the impact of COVID-19 and had suffered more than 80% revenue loss, thus creating a financial burden for the entire industry.
“Nearly 250 to 300 crore is estimated to be the loss for OOH business due to pandemic and lockdown,” said Murugesan, Senior Manager, Ad Sales, Magic Square
Speaking on the OOH industry’s performance in the last one year, Biju Babu, Director & Managing Partner, Adverb Solutions, said, “The OOH industry in Kerala has suffered approximately a loss of over 80% when compared to the previous years. Thanks to the slight recovery in the market post-August, otherwise, the entire year would have been wiped out. Many small-scale business houses are still struggling to meet their ends due to the crisis. Even the big business groups were forced to cut down their workforce and inventories to cut down the cost to minimize their loss.”
“For an industry like OOH whose growth is contingent on traffic movement- the national lockdowns, enforcement of social distancing norms, and work-from-home options extended to employees by many corporate segments meant translated into an acute loss of business, for the critical mass of audiences were not there to justify brand spends on OOH. This was particularly evident in the transit media space, where international air traffic was negligibly small, domestic air traffic was gradually opened up but is nowhere near peak levels, railway train movement was completely disrupted and way off the regular time-table, and Metro rail networks too were operating with a whole lot of restrictions on commuter movements,” said Kumar Seetharaman, MD, Srishti Communications.
He added, “A similar sentiment pervades in congregation points that double up as OOH destinations like malls and Cineplex where the footfalls are abysmally lower than average.”
With increased mobility and COVID-19 vaccine soon expected to hit the markets, the OOH industry is expecting an improvement in the prevailing situation.
“The OOH Ad market is anticipated to rise at a considerable rate, with the rising adoption of strategies by key players; the market is expected to rise over the projected horizon. The Indian ad industry is expected to see recovery in 2021 with ad investments expected to reach significant growth,” said Ram Mohan, Director, Skyrams Outdoor Advertisings.
According to Selvakumar, Director, Skyrams Outdoor Advertisings, “Most of the sectors like auto, telecom, consumer durable, retail, education and Manufacturing, which was severely impacted during the pandemic, is now stabilizing and moving forward with a positive outlook, we expect OOH to see double-digit growth after a difficult year. Uncertainty and cautiously spending consumer insights, brands are realizing that importance of being present (OOH Ads) wherever consumers are.”
The OOH industry pins more hope with the country gearing up for elections to legislative assemblies of 4 states and 2 Union Territories in 2021. With Kerala, Tamil Nadu, and Puducherry gearing up for the legislative assembly elections, the South OOH expects a revenue boost.
“For the OOH industry, the elections will be a blessing in these states as the market expects good inventory booking by all the political parties – even though the rates will be moderate one-month booking is confirmed for the industry. I expect a 150-crore boost for the industry- put together in Kerala, Tamil Nadu, and Puducherry,” said Biju Babu.
According to Seetharaman, “Elections are always a windfall for Indian OOH, but given that audiences in the OOH space are still relatively small owing to the social distancing norms that are being observed by many, political campaigns in the OOH may not be as high as before.”
He continued, “Moreover, the political parties have become digital media savvy and are using the Internet and social media platforms in a big way to influence the electorates. OOH would need to integrate with the digital media to wrest a larger share of the spends, be it by political parties or brands.
The industry experts are expecting revenue growth in the OOH industry between 10- 100%
According to Biju Babu, The elections will bring some cheer to the OOH market.
“Almost all the sector related to the OOH industry will surely have a revenue boost. I expect an 8 to 10 % revenue growth in the industry during this period,“ he added.
OOH, industry performance in poll-bound states is likely excellent as political parties will also use OOH medium like Billboards, posters, flex, etc., for their poll campaign. Secondly, poll-bound states will have colossal cash inflow and outflow. Revenue growth for the OOH industry is expected to be higher by 30 to 40%,” said Murugesan.
With Assam, West Bengal, Kerala, Tamil Nadu and Puducherry going to polls in the early part of 2021, there is great expectation that Indian OOH will recover much of the revenue losses incurred in 2020.
“One can expect the OOH business to clock 80-100% growth quarter-on-quarter in these regional markets in the period January-March, although the growth will look inordinately high because of the low base effect. It may be added that the growth will be seen only in pockets and not at a pan-India level if one views the matter strictly from the election prism. However, with the industry gradually recovering, one is likely to see a significant positive rub-off on the OOH business. All eyes are now on the tourism and hospitality sector, as to when that will open up, now that the Covid-19 vaccination program is underway,” concluded Seetharaman.