As a new Standard Operating Procedure (SOP) comes into force for the historically fragmented OOH industry, media owners and agencies say it will give advertisers the confidence to spend more on the Outdoor medium
BY SAMARPITA BANERJEE
For the longest time, the Indian Out of Home (OOH) industry, often said to be the oldest medium of advertising, has been criticized for lack of proper guidelines or any recognized framework for conducting business. Brands have often said that they avoid using OOH as an important part of their advertising plans because of the fragmented nature of the industry and also because it lacks proper measurement, which makes it difficult for them to assess return on investment (RoI). All that is set to change with the formulation of a Standard Operating Procedure (SOP) for all stakeholders of the Rs 3000 crore OOH industry. While media owners have said that the move will make advertisers look at OOH as a more serious medium, agencies are confident it will help smoothen the complexities around delays in purchase orders and payments, something that has affected the agencies for a long time. Meanwhile, brands are happy that a step has been taken towards giving form and structure to the industry, and are hopeful that the next step will be towards putting in place a measurement metrics to calculate RoI.
While the issue of RoI will still need some time and effort to be sorted out, the OOH industry is definitely on the road to transformation, with the Indian Outdoor Advertising Association (IOAA) and the Advertising Agencies Association of India (AAAI) coming together to bring out a set of rules, regulations and a framework for all media owners, OOH agencies and advertisers, in an attempt to bring in some order in the hitherto unregulated OOH industry.
HOW THE SOP CAME TO BE
The IOAA had been working on setting up an SOP for a few years, but things speeded up once the AAAI came into the picture. The two apex bodies together formulated the SOP that will have to be followed by all ‘agencies and media owners in connection with display of advertising by advertisers through their agencies on sites/properties owned by media owners’.
While announcing the launch of the SOP, both IOAA and AAAI said that the agreement would go a long way in building the confidence of advertisers in buying Outdoor sites and thereby ‘enable them to invest heavily in Outdoor and exploit its true potential’.
On the need for such an SOP, Nakul Chopra, President of AAAI, had this to say: “I am delighted that many vexing issues have been sorted out in an amicable manner through healthy debate and discussion over the past few months and I am confident that this will go a long way in growing the OOH industry.”
Noomi Mehta, President of IOAA and owner of OOH firm Selvel, echoed his optimism thus: “The agreement on SOP between IOAA and AAAI is a significant step and I do hope that both Outdoor media owners and agency owners will carry out their responsibilities in order to benefit from the advantages that the SOP spells out for both parties.”
OOH’S DAYS OF CHAOS
Most insiders from the industry feel that advertisers have always treated the OOH industry differently, in comparison to the way they treat other mediums like Print or Television. They are also quick to point out that it is the complacency of OOH players that has led to lack of rules and regulations in the system.
For years, different media owners and agencies have played by rules created by themselves, throwing up problems for all industry stakeholders. While media owners have suffered in terms of delays in purchase orders, agencies have suffered due to lack of legality of sites. Meanwhile, advertisers have time and again been faced with situations where their campaigns have been removed without prior notice. The industry, on the whole, is positive that the SOP will get rid of most, if not all, such challenges that have been plaguing the sector.
Atul Shrivastava, Group CEO, Laqshya Media Group, says that since Laqshya is a media owner and runs agencies too, they have been facing a lot of trouble. “The biggest problem was from the agency’s side. Until now, there was no set deadline for the issue of purchase orders. After doing a campaign, the purchase order would be issued in 3-4 months, as there was no limit. The final payment would come after another 3-6 months, which would create a tightrope walk kind of a situation for media owners in terms of finances. If agencies issue purchase orders on time, the bill will come on time and they will be able to raise the invoice to advertisers on time, which would sort out a lot of problems,” he comments.
Industry experts say absence of transparency in the legality of sites is one of the primary reasons for advertisers to be wary of the OOH medium. Nabendu Bhattacharyya, CEO & Managing Director, Milestone Brandcom, says, “Until now, we as agency specialists have committed to a lot of things on behalf of media owners without having proper knowledge of the legalities or the norms to be followed. The SOP will help in closing a lot of these gaps.”
Soumitra Bhattacharyya, CEO, Madison Out of Home, says, “It all begins with advertisers treating OOH differently. But then, we as an industry have become undisciplined over the years. The SOP has now put together rules around timelines, extensions and even cancellation grids to regularize the business.”
Meanwhile, another way of organizing the industry is to bring more and more OOH agencies and media owners under IOAA, and the industry body has been working on that too. “We are communicating to a lot of media owners that we would not be able to work with them if they are not members. We are telling them the benefits of joining the body as well, and the response has been positive and the number is going up slowly,” adds Bhattacharya.
A FEW KEY HIGHLIGHTS OF THE SOP
OFFER ONLY LEGAL SITES: IOAA will ensure that its members will only put on offer those sites that are legal and that comply with all applicable laws and rules of the land.
INDEMNITY: IOAA members shall provide indemnity for any loss that the Outdoor Agency and Advertiser may be exposed to, by virtue of using IOAA member sites as an advertising medium.
PURCHASE/RELEASE ORDERS: Advertisers shall sign and approve in writing estimates of Outdoor Agencies and where advertisers have adopted the practice of issuing Purchase Orders (PO), issue such orders before the start date of the campaign. Similarly, Outdoor agencies will need to issue Release Orders (RO) to media owners before start date of campaign.
MINIMUM DISPLAY PERIOD: Minimum display period is 10 days and thereafter in 5-day intervals - 10, 15, 20, 25, 30 days, etc.
DEADLINE FOR RAISING INVOICES: Media owners will need to raise invoices on an Outdoor agency along with newspaper dated photographs within 14 days of completion of job or for displays longer than one month, within 14 days of completion of month. Outdoor agencies will submit invoices to advertiser within a further 14 days.
ADVERTISER RESPONSIBILITY: Advertisers are required to make prompt and full payment of invoices within the specified credit period of 30 days from the date of the bill. Advertisers are required to notify the Outdoor agency about any defect in display, or discrepancy in invoice, within 7 days of receipt of invoice.
CONSEQUENCES OF DELAYED PAYMENT: Any default/delay by advertiser in making payments within the credit period shall affect the credit-worthiness of the advertiser and in this connection the decision of the Credit Review Committee of the IOAA-AAAI Working Group will be final.
CHANGE OF OUTDOOR AGENCY: In case an advertiser replaces an existing Outdoor agency with a new Outdoor agency, it will be the responsibility of the incoming Outdoor agency to obtain a ‘NOC’ from the old agency, and submit it to the IOAA-AAAI Joint Working Group (JWG).
NON-DISCLOSURE AND CONFIDENTIALITY AGREEMENT: Advertisers/Outdoor agencies will be at liberty to insist on execution of a non-disclosure and confidentiality agreement with media owners, which should be complied with, to ensure strict confidentiality in the market about new launches/launch of new campaigns and details of media plan to be executed.
BRINGING IN SOME ORDER
With the world on the move and people choosing to or even being forced to spend more and more time outdoors, the Outdoor industry is presented with a huge opportunity. This is apparent from the growth the industry has been witnessing over the years – from a Rs 2,665 crore industry in 2015, it grew at a rate of 9% to reach a size of Rs 2,910 crore in 2016. At the beginning of this year, the PitchMadison Advertising Report projected a growth rate of 11% for OOH in 2017, to reach Rs 3,234 crore.
The OOH medium is an effective way to generate name or product recognition with consumers who are on the move. It is high-impact and has a high reach with a mass audience. However, despite a long list of advantages, advertisers have typically shied away from spending big on the medium because of its fragmented nature. It is this lack of organization that prompted the members of IOAA to start work on the SOP, about three years back. Ashish Bhasin, Chairman and CEO, South Asia - Dentsu Aegis Network andVice President, AAAI, who worked closely on the SOP, that DAN, which currently forms roughly 35-40% of the organized OOH ecosystem, has been making an effort to ensure some level of standardization. “However, we soon realized that this is something beyond a single company and that the whole industry needed to participate to make it happen. Many like-minded agencies felt the same way and thus, under AAAI, we formed theOutdoor Media Forum (OMF ) where all the Outdoor agencies of our members came together. We also started engaging with IOAA, because the market on the media owner’s side is highlyfragmented and there might be hundreds or even tho usands of media owners and they are all non-standardized,” Bhasin explains. (In fact, the number of players in the OOH industry is a difficult guess, and it could be anywhere between 10,000 and 20,000.)
Bhasin adds that a few discussions were followed by thesigning of a Memor andum of Understanding (MoU) between IOAA and AAAI, with the objective of infusing standardization, professionalism and accountability into the OOH industry. Noomi Mehta says that the biggest challenge that the IOAA faced was ensuring that all the agencies were on the same page. “We had been working on the SOP for around 4-5 years. However, agencies kept finding reasons to say that it was not good, though it was always done in conjunction with them. So,we got a few friends from inside the agencies and told them to help us make this happen. From there, we took it forward step by step. We have been in close contact with the AAAI to get rid of all hurdles so that the SOP is acceptable to everyone. While the basics of the SOP are now known to everyone, to get it accepted by everyone has been a huge challenge,” Mehta adds.
‘There is a little dominance of AAAI’
The SOP could be a gamechanger for the industry. Until now, no rules governed the overall OOH industry. There might be some flaws with the SOP and people might still come up with ways of flouting
it, because you can never be 100% foolproof. We have worked on this for two-and-a-half years now and have been in discussion with all stakeholders. It has been welcomed by most OOH players. While we are still not very close to complete consolidation, we are at least slowly inching towards a more professional industry.
Executive Chairman, JCDecaux India
Any form of regulation and move to get the industry more organized is a good move. The OOH industry has been plagued by problems like too much fragmentation, lack of professionalism and lack of organization. Any move in the direction of solving these problems will help. What IOAA has done is commendable. When I joined the industry about two years ago, they had barely 40 members. Today, IOAA has around 250 members, which is a significant size of the market. People have started believing in their cause.
CEO, South Asia and Middle East, Kinetic Worldwide
Any process being standardized will help streamline things. Right now, agencies, media owners as well as advertisers have their own processes. If all three are in the same process line, the overall product has to be better. This is a well thought-out SOP and will help the industry grow. Every new process, when introduced, sees some amount of resistance because people are not open to change. However, the people who have thought over the SOP are veterans in the industry and so that will make players take this more seriously.
RAJNEESH J. BAHL
Founder & Director, Grey Parrot Integrated Pvt Ltd
While this is a step in the right direction and will help regularize the industry to a large extent in the long run, I feel there is a little dominance of AAAI. The way the SOP has been conceptualized, it is more from the agency’s perspective and not from the perspective of the media owners.
Director, Alakh Advertising
It’s definitely a step in the right direction. This is a forum where everybody is coming together and working towards a common standard operating procedure. How successful it will be, only time will tell. But I appreciate the efforts of IOAA and AAAI. Even if it makes a difference of 25%, it’s a step in the right direction. Once the larger media owners start following the policies and stick to them, the smaller ones will follow. While the SOP might not be what you exactly want, it’s much better than the existing system.
Managing Director, Atin Promotions & Advertising Pvt Ltd
The SOP is a welcome step towards the growth of the Indian Outdoor industry. OOH as a medium has been under-utilized by advertisers for long, predominantly due to fragmentation and regulation issues. Though as an agency, we have in-house scientific planning tools, it is imperative that a standardized measurement mechanism is devised which would eventually lead to uniformity in the media selection and RoI process.
Founder and CEO, Span Communications
While the SOP has been put in place, the next big step is to make sure that all the stakeholders are aware of the rules andcomply with them. But what happe ns when any stakeholder, knowingly or unknowingly, flouts the norms? While many are optimistic about the intent of the SOP, they are uncertain about how long it will take to ensure compliance by all players involved.
Sharath Chandra, President, Times OOH, says, “As with anyindustry, the more regulated and standardized it is, the greater the scope for well-planned growth. Nobody here is against any regulation. However, the problem lies in the way business has been done for all these years. Any change that has a deviation from the way things have been done is going to be a tough uphill climb. While I am glad we have started the journey, to make sure people follow it is going to be difficult. This is not something that one particular set of well-meaning individuals can navigate. Each one of us needs to be evangelists in this. For short-term gains, one shouldn’t lose sight of the medium-term objectives.”
The problem, many feel, is in bringing about a change in attitude of all the stakeholders. Says Haresh Nayak, Managing Director of Posterscope Group, India, “Implementation is going to be difficult, but this approach is in the interest of all stakeholders. To bring about a behavioural change in everybody, it is critical to bring in the best practices from the industry along with research, data and accountability. Other mediums like TV or Digital have been working on providing advertisers with measurements and RoI. If advertisers look at us differently, we are to be blamed for it because we haven’t taken the necessary steps as an industry.”
While the industry might be some distance away from seeing 100% compliance, the SOP has put in place a set of penalties that will be meted out to defaulters that could range from a fine of Rs 50 lakh to prevention of further business and even expulsion from IOAA.
Elaborating on it, Indrajit Sen, CEO, IOAA, says, “We have put together a code of ethics and good practices. Every member of IOAA is supposed to be signing on for that when they become a member. If you follow that, you are not going to default on the rules. If you aren’t, we have the right to remove you as a member. Secondly, we have identified the use of illegal sites as one of the major things that advertisers find objectionable and agencies do too. We have specifically placed a big penalty on that. If you are caught wilfully selling an illegal site, there will be a hefty fine, and prevention of further business. The informal part of it is, in every State and city, there is a huge consciousness about the illegal goingson in the business, which makes it more and more uncompetitive and subject to a lot of social pressure. If agencies and advertisers do not follow rules, in terms of default of payment, that’s the bigger concern. There too, we have the formal rule of withholding further business, preventing them from moving from one agency they have not paid to another, and carrying on with the same thing. All these things have been anticipated and put in place.”
‘Are there any penal provisions for non-compliance to these guidelines?’
OOH has evolved to create a positive shift from the traditional medium of reach, which was always TV. It is a strong medium for delivering a compelling brand story while creating larger-than-life impact. We have been using OOH to leverage the strongest part of our creative assets, our brand’s unique visual identity. Visual disruption in order to stand out from the clutter has been a key focus for all our brands and OOH enables us to leverage it to the fullest. With consumers spending greater time outdoors, OOH plays an important role in delivering communication objectives for Parle Agro.
Joint Managing Director & CMO, Parle Agro
Outdoor advertising is not just a vehicle for raising awareness; it can also drive purchase consideration and intent, and be used to communicate brand positioning. The gamut, viewability and dramatic effect of Outdoor advertising helps brands create cut-through and capture consumer attention in a world where other messages struggle to get through. However, as a regular advertiser on the OOH platform, we feel change is required in the existing policies. A consolidated OOH medium will definitely pull the marketers to invest more in outdoor advertising.
A more consolidated OOH industry will help open up a better system of working and will hopefully provide value to both advertisers and outdoor partners bringing in more professionalism and transparency. This is just a first step in the right direction and we will need to further consolidate aspects like measurement metrics, digitization and more such formalities to actually make outdoor a more integral part of campaigns and not just a top-up for plans.
Senior VP - Marketing & Communications, Sony MAX Movie Cluster
OOH plays a major role in achieving significant impact in terms of greater awareness and brand recall – particularly for new launches and for driving occasions. Back In December 2016, we aimed at enhancing our consumer’s eat experiences through outdoor activities for Cadbury Fuse. In this 360-degree approach, we went all out on Digital and Outdoor initiatives. In the OOH space, we have seen innovations, especially on the digital front.
Director - Marketing (Chocolates), Mondelez India
An SOP, along with a more transparent mechanism, that rates partners on things like adherence to commitments, quality of service and transparency on actual rates prevalent in individual sites and locations will really help us as a brand. Rates and inventory positions especially need a lot of transparency and clarity. Inventory can be booked in advance and carried unless it is a rare emergency. The industry cannot continue to take refuge and actually profit from the argument that it is a fragmented and disaggregated one. It is for them to reform and prosper or continue to be viewed by suspicion by brands.
Head - Brand & Marketing, Fabindia
While a movement to regulate OOH via SOPs is laudable, the fact remains that IOAA is a voluntary association, possibly without any quasi-regulatory or quasi-judicial authority. I would only ask if there are any penal provisions for non-compliance to these set of guidelines. Unfortunately in the Indian context, where there are no entry barriers to being an OOH provider or user as the case may be – for example, any political outfit can put up an illegal hoarding even though there have been judicial interventions and activism against it - how will a voluntary association of OOH providers implement and enforce reforms? Like most advertisers, we have to rely on inputs and informal monitoring by our branches across the country. There is no central audit mechanism to check quality, fitment, placement, accuracy, etc. There is currently no reputable national or even local body that measures impact - traffic, viewability index, number of impressions of selected sites or to measure one site vs the other. Therefore, there exists no mechanism to impute a discernible cost of impression or view.
Head - Marketing & Communications, Edelweiss Group
GST: A BLESSING IN DISGUISE FOR OOH?
While the entire nation reeled under the effects of the Goods and Servcies Tax (GST) implemented by the Government in July, a few OOH players say that it could be a blessing in disguise for the industry and would help its move of putting a framework in place.
Mukesh Gupta, Chairman & Managing Director, Graphisads Private Limited, says due to GST, the industry will be forced to consolidate itself. “Due to GST, agencies will have to raise their bills on clients immediately and credit the bills of media owners. This way, the processes will become more efficient automatically. If the agency does not pay the bill within six months, they will not get the input GST. In the earlier system, agencies issued POs after 4-5 months, and payment came after one year or more. This will not happen now. The advertising industry on the whole will welcomeBthis initiative whole-heartedly, and I do not see any bottlenecks in implementation of the SOP as every stakeholder is going to be benefited overall,” Gupta adds.
THE ADVERTISER’S PERSPECTIVE
While advertisers understand the benefits of a dynamic medium like OOH, many are wary of giving it a larger share in their advertising pie. Sharing his consternation, Karan Kumar, Head, Brand & Marketing, Fabindia says that an SOP was the need of the hour for the industry to get its act together. “On the one hand, the industry has not taken the lead in proving its efficacy as a medium to advertisers (in terms of its effectiveness and performance measurement) and on the other hand, there have never been any ground rules to follow. As a brand, you feel only as secure as the might of your agency partner. There are neither any legitimate rate cards nor any transparency in the inventory availability. Multiple partners can come and quote multiple prices for the same site and then at the last minute, back out claiming the site’s unavailability. A brand really has no recourse against such practices, rampant in the industry. Some SOPs and more transparent mechanisms that rate partners on things like adherence to commitment, quality of service and transparency on actual rates prevalent in individual sites and locations will really help,” he declares.
Meanwhile, many brands have been using the medium effectively, even infusing innovation into their communication, and are hopeful about a bright future. Vodafone’s effective use of the OOH medium for its rainwater harvesting campaign in Pune in 2016, and anti air-pollution hoardings in Delhi have won hearts and awards. Siddharth Banerjee, EVP - Marketing, Vodafone India, says, “OOH is an important medium for us because of two reasons.
Firstly, while Telecom is a national business, we also operate with local messaging both for business and for engagement with our customers across circles, States and the country. OOH delivers some customized messaging for us, specific to local audiences in a very specific way. Secondly, OOH enables us to run campaigns on short notice. Any good marketer would always want to know what is the delivered impact in terms of measurability and therefore, to know the RoI. While that has been lacking until now, steps like the SOP will add some framework and any robust framework is good for us.”
While the SOP is the first step towards putting the industry in order, bringing in measurement metrics will be the next difficult task. However, the industry is ready to take it, one step at a time. Mandeep Malhotra, Founding Partner and CEO, The Social Street, feels that OOH is not an easy industry to operate in, considering that one has to deal with multiple authorities. “All brands follow strict norms for other media, but OOH is treated as a step-child. OOH is not an easy industry to work in; you have to fight it out with the building owner as well as the municipal corporation! We have to juggle a lot for one unit. The walls we have built around ourselves saying ‘I am bigger than you’ have led to a delay in putting things together. The will to grow collectively as an industry has been lacking so far. Other industries like the experiential industry have been later entrants but have progressed faster, from an industry body point of view. While I am not yet aware of the exact composition of the SOP, I am positive about the intent and am confident it will benefit the industry,” Malhotra states.
Meanwhile, Sam Balsara, Chairman & Managing Director, Madison World, who played an important role in putting together the SOP, is sure that it will help the industry grow. “Because of the highly fragmented nature of the industry so far, it was becoming a free-for-all. Due to this, the confidence with which an advertiser could buy Outdoor was getting undermined. With the policy framework in place, I hope advertisers will be able to buy Outdoor media with the same confidence with which they buy TV or Print today,” Balsara affirms.
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