In what seems to be good news for the signage industry, out of home (OOH) seems to be finding favor with more advertisers and believers in the medium are using it more intensively now, says the Pitch Madison Advertising Report 2024.
According to the report, in the year 2023, OOH achieved a 13% growth rate, which is substantially higher than that of TV and print, the two dominant mediums among traditional media.
OOH’s advertising spends reached Rs 4,140 crore in 2023, a 13% increase over the previous year and crossed the pre-Covid level of Rs 3,495 crore achieved in 2019.
In 2021, OOH’s share in the total adex stood at 3% (Rs 2,178 crore). The number went up to Rs 3,666 crore in 2022 (4% share).
During the Covid pandemic in 2020, when a nationwide lockdown was announced, OOH adex fell to Rs. 1,292 crore (2% share).
Since then, there has been a steep increase in OOH spends and 2023 ended with a record adex of Rs. 4,140 crore (4%) . OOH has been maintaining a 4% share since 2022, similar to the global share.
The growth rate of OOH adex was 9% in 2018, which fell to 4% in 2019. In 2020, the growth crashed to -63% amid the pandemic. In 2021, when India opened up, the growth rate soared to 69% on the back of a low base. It stayed more or less the same at 68% in 2022 but consolidated at 13% in 2023.
The report says key drivers for this growth are the increasing number of airports and metro rail in many Tier-1 and Tier-2 cities, the upgrade of many outdoor sites and bus shelters as well as the rapid expansion of large digital screens, which replaced static sites in prime localities.
“This development in infrastructure along with rapid advances in technology have enabled the use of anamorphic, 3D and CGI, increasing the impact of OOH. All these developments have enabled OOH to be recognized as a medium that can lend status and prestige to a brand. The ability of OOH to tell a story through video, which was earlier the exclusive domain of TV, is an attractive proposition for advertisers,” the report says.
By category, real estate and construction materials maintained the lead with a 19% share in OOH adex. FMCG, which has moved up in share to 13% in 2022, rolled back to 11%. Organized retail maintained its 13% share. Telecom, which at one time was the largest contributor, now has a 5% share. The top four categories – real estate, retail, FMCG and consumer service – dominate adex with a 55% share.
Future outlook
The report says believe more advertisers and brands are using outdoor as they are convinced about its impact. Outdoor is also another favorite medium of political parties and the upcoming parliamentary elections should see some intense usage of outdoor by all political parties.
The availability of digital screens on the roads as well as indoors in hotels, clubs, restaurants, commercial and residential buildings, etc., has made more and more advertisers skeptical in medium change their minds.
Keeping in mind these factors, the report estimates a further 15% growth in the outdoor medium, taking OOH’s share to 4.3%. Large digital format video screens are expected to come up aggressively in prominent areas in cities from 1,000 in 2023 to 1,400 in 2024.
The number of small screens in hotels, clubs, restaurants, commercial and foyers of residential buildings is expected to go up from 60,000 in 2023 to 90,000 in 2024, which will help OOH achieve a growth rate of 15% and establish a 4.3% share of the adex.
