OOH hurt as brands tighten purse strings post demonetisation

08 January 2017

Almost two months after the 8 November demonetisation announcement, the impact of the decision is finally showing its results, and as the industry had braced itself for, they reveal a decline in expectations.

dsc-0395 November-December is the time when the outdoor sector traditionally sees a boom in business

Take out of home (OOH) segment, for example. According to a forecast published in February 2016, the Indian OOH industry was to grow by 12.9% to reach Rs 3,010 crore. Now, industry insiders doubt that the actual numbers would reach even closer to the projected figure.

What hit the industry the most was the timing of the decision, November-December is the time when the outdoor sector traditionally sees a boom in business. It is the time of winter sales. This is the time when buyers are likely to spend on their year-end shopping. This year, however, as cash disappeared from the market overnight, the brands took a safer bet and decided to observe the situation, instead of spending money to woo customers. Customers were not clearly buying and the brands realised that they are not going to achieve their sales targets for Q4.  So they stopped their campaigns.

Especially, spending by real estate and FMCG went down drastically. Financial service providers, including the ubiquitous Paytm, did some spending, but according industry insiders that too just about one fourth of what they would normally spend.

When advertisers hold on to their money bags, the situation becomes especially dire for the OOH segment, as it usually stands at the bottom of the list of priorities for an advertising while a major chunk of ad spent is claimed by television and newspapers, and to some extent digital.

Sources said the immediate fall out was the cancellation of the contracts. As result, the advertising industry suffered a loss of not less than Rs 2,000 crore within the first few weeks of the decision.

What happened next is for everyone to see, scores of empty hoarding at busy intersections all over the country.

The industry has not given up. According to current projections, brands are likely to wait until the general money flow stabilises and with this OOH segment too will be back in business. 

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