OOH advertising to rise 20% this festive period, ET BrandEquity

Representative ImageAs the festive season unfolds, the OOH (Out-of-Home) sector is witnessing a surge in investments. Industry leaders predict a healthy double digit percentage increase in advertising spends compared to last year, with a notable shift in spending patterns favoring the latter half of the year. Consumer spending has risen by 20-30 per cent from 2022 to 2023, prompting brands to capitalize on this momentum, especially during key festivals like Diwali.

According to the Pitch Madison Advertising Report 2024, the OOH sector experienced its slowest spending in the third quarter of last year. Total spends for the year were Rs 1046 crore in Q1, Rs 1003 crore in Q2, Rs 966 crore in Q3, and Rs 1125 crore in Q4, contributing to an overall adex of Rs 4140 crore. However, Q3 2023 saw spending grow from Rs 896 crore to Rs 966 crore compared to the previous year, indicating a positive trend despite the slower overall pace.

Growth Expectations

Jayesh Yagnik, CEO of MOM Outdoor Media, stated that OOH remains a leading medium during the festive season, as brands allocate budgets to make a strong impact. OOH ad spend typically rises by 20-30 per cent year-on-year due to increased consumer footfall. In 2023, OOH recorded nearly 20 per cent revenue growth, with similar growth expected in 2024. “During the festival season, spending showed an average increase of 20-30 per cent from 2022 to 2023. We expect this trend to continue in 2024,” said Yagnik.

Shripad Ashtekar, MD of Signpost India, noted a significant surge in collaborations with both national and regional brands increasingly integrating OOH and DOOH formats into their media strategies. “This reflects a broader industry shift towards embracing the tangible impact of OOH advertising. At Signpost India, we recorded a 1.5x growth in brand associations during H1 of this year compared to H1 of last year. Projections indicate that the number of brands partnering with us could double in H2,” Ashtekar added.

Rohit Chopra, COO of Times OOH, shared that the Indian OOH sector expects a 10-20 per cent growth in advertising spends during the festive season. “H1 saw substantial investments around major sports events like the IPL and World Cup. Although H2 was slower, the festive season is compensating for it, driving double-digit growth,” he said. Santosh Mishra, Senior Vice President of Posterscope India, predicts a 10-15 per cent growth in investments compared to last year, with H2 accounting for a larger share of spending due to festive promotions.

Brand Perception

The FICCI EY report 2024 stated that Real estate and construction remained the largest sector for OOH investments, holding a 19 per cent share, fueled by urbanization and infrastructure development. Other categories that drove growth included organized retail, consumer services, and financial services. While most sectors experienced growth compared to 2022, FMCG, media, and e-commerce were exceptions. However, FMCG was among the top five sectors.

Mayank Shah, VP of Parle Products, expects this festive period to outperform last year, citing strong rural demand alongside robust urban demand. With favorable monsoon conditions and a promising Kharif harvest, the outlook is positive. Shah emphasized that OOH is a strategic medium for FMCG brands, primarily used for impactful launches. He anticipates an 8-10 per cent increase in overall ad budgets compared to last festive season. “Typically, OOH spends range from 5-10 per cent, with higher contributions for significant launches,” he said.

For categories like consumer durables and home appliances, the festive period is particularly crucial. These brands typically increase spending to capitalize on heightened consumer demand and promote special offers.

Swati Rathi, Marketing Head at Godrej Appliances, noted that OOH serves as an effective medium for consumer attention during this period. “We deploy OOH strategically, focusing on point-of-sale areas and high-impact installations in key markets,” she explained. For instance, they utilized motorized OOH billboards in high footfall areas during festive months.

“We have increased our OOH budget this year, yielding positive results and encouraging further exploration of the medium. While digital remains a key focus, OOH enhances brand visibility close to the point of sale,” Rathi concluded.

Trends & Growth Drivers

According to the FICCI EY report 2024, traditional media accounted for 62% of total OOH advertising. Also, it has experienced a 19% growth since 2022, driven by rising demand for premium inventory formats and large digital screens in metropolitan areas.

Amarjeet Hudda, COO of Laqshya Media, noted that the festive season, particularly with Diwali approaching, is a peak period for OOH. This year looks promising, with brands ramping up outdoor advertising efforts. “We’re seeing a surge in both traditional billboards and Digital OOH (DOOH), as brands aim to capture increased consumer footfall,” he stated.

Key trends include a rising preference for transit digital media and digital outdoor advertising. Ashtekar explained that transit digital media combines the physical impact of traditional OOH with the digital reach of online platforms, creating a seamless omnichannel experience. Digital outdoor advertising allows for interactive, real-time engagement, enabling brands to stay agile and responsive.

Growth in the OOH sector is driven by increased airport and metro operations in Tier-1 and Tier-2 cities, upgrades to outdoor sites, and the rise of large digital screens. Mishra noted that while traditional formats like billboards remain popular, large-format digital screens are also seeing significant growth. Brands are experimenting with 3D anamorphic displays and CGI, particularly in airports and smaller locations.

Consumer confidence and spending, especially during Diwali, are key drivers. Hudda mentioned that sectors like retail, e-commerce, FMCG, and electronics are heavily investing in OOH to promote festive offers, while the banking and finance sectors focus on festive loans. Emerging sectors like healthcare and nutraceuticals are also contributing to OOH growth.

• Published On Oct 24, 2024 at 08:59 AM IST

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