Rural market is the new siren call for OOH

31 Jan,2012

By Robin Thomas

 

According to industry estimates, ruralIndiais growing at a faster pace than its urban counterparts, atleast in certain product categories. The overall Indian rural market size is believed to be Rs800 crore, with a total advertising pie of Rs12,000 Crore in rural markets. FMCG products, consumer durables, agro manufacturers, banking and insurance, telecom companies are some of the big spenders in rural markets.

 

A survey reveals that FMCG products account for nearly 53 per cent of the market share in ruralIndiawhereas consumer durables account for the rest.

 

The last few years have seen a drastic increase in the standard of living and purchasing power in ruralIndiaand many marketers heading for the lucrative rural markets. Also people in rural areas tend to spend a lot of time outdoors, which makes the rural market an ideal target for OOH media. As a result, almost every OOH industry player believes that the next phase of growth for the out-of-home media will come from rural markets.

 

In interactions with MxMIndia, Mr Nabendu Bhattacharyya, Managing Director, Milestone Brandcom – who had shared his plans to launch Milestone Rural – and Mr Rohit Samarth, Business Head – Rural, Percept- Out of Home, were of the opinion that out-of-home media is seeing a tremendous growth in rural markets as consumption power in smaller towns and villages is increasing.

 

Mr Anirban Ghosh, Senior Vice President, Adz Edge opined that an increase in purchasing power of rural masses in recent past has fuelled lot of interest amongst clients across all categories in ruralIndia. “Once considered a market only for low end products, today companies are seeing rural market as the new growth avenue. Comprising more than 70 per cent of the total consumers in India and annual market potential in excess of Rs12,30,00 crore, rural India is being charmed in novel ways. Naturally, out-of-home has also taken an upswing in rural market. More and more clients have shown interest in tapping this market which has got tremendous potential and increasing buying power” he said.

 

The main revenue stream in rural market will come through a media integration and activation approach such as van activations, road shows, wall paintings, melas or village fairs.

 

Mr. Ashish Pherwani, Associate Director, Advisory Services, Ernst & Young is very optimistic about rural out-of-home media. He believes that it can reach 25-30 per cent of the OOH advertising share in 5 years and that as consumptions shifts from metros to the 35 to 100 of the largest towns, OOH spends will also follow.

 

Although OOH in rural areas is on the growth curve, it still has a long way to go and in order to continue growing in the long run; industry players believe that there are certain challenges and concerns that need to be overcome.

 

One of the biggest concerns is the fact that the rural market is very fragmented and there is neither a credible measurement system nor a clear census data that can provide a clear definition of ruralIndiaand the socio-economic classification, among other relevant details.

 

Mr Samarth observed: “While advertising in ruralIndiais growing, fragmentation of the market is a big challenge; there is no distribution network and there is no credible measurement system either. Another set of challenge is about living up to the promise of delivery in the rural markets. However, on the positive side, the biggest change in the rural is the fact that there is much less central control because today a lot of large companies are decentralizing their budgets.”

 

Mr Pherwani said: “The rural market is extremely fragmented and there is little or no transparency to provide confidence to advertisers. Therefore, transparency needs to improve with better demonstration of proof of delivery. There are also few national players who can support large campaigns.”

 

But Mr Ghosh believes that the biggest challenge for OOH is the lack of quality properties in rural market and also the fact that it is even more unorganized as compared to its urban counterpart. As a result, execution and proper monitoring is another core challenge. “To overcome these problems, we need to understand the rural market in a better way. Major players from OOH media owning houses should take initiative to open up their operations close to these locations for better control. They should collaborate with the local authorities to implement uniform regulations and open up more quality properties in rural market” he suggested.

 

Innovations are the need of the hour to attract the rural masses and the OOH approach needs to be more interactive and integrated with brand activation for high recall value. As product consumptions increase, OOH media spends will also increase.

 

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