OOH: Hoardings bear the economic meltdown

Anurag Basu - Televisionpoint.com | Kolkata
It is not merely the hapless workforce that is bearing the brunt of the economic recession. Hit by the funds crunch, several leading companies have curtailed their outdoor advertising budget. Result: hundreds of hoardings across the city are lying bare.

Billboards at prime locations, such as Park Street, Camac Street and Jawaharlal Nehru Road in Kolkata's central business district, have had no takers for the last one month. Several have been lying vacant at E M Bypass, where a mad scramble to put up hoardings had induced certain agencies to chop down trees. But the September recession has made things come full circle.

Speaking to Televisionpoint.com, Anindya Banerjee, director, Enkon, says, "Most big agencies have suffered a 50 per cent drop in revenue. It is likely to slide further, since companies have shelved their investment plans. Unless you have new products or schemes, hoardings will not be required. During recessions, the advertising budget is the first to be cut, so this was expected."

Reliance was the first to slash their hoarding investment. Several real estate concerns, telecom majors and financial companies have followed suit. Many more are likely to withdraw their hoardings in the next couple of weeks.

"Things have never been so bad. Our clients have pressed the panic button, so we must wait for the crisis to tide over," said Subhas Neogi, managing director, Selvel tells Televisionpoint.com.

Niyogi said that Selvel has 1,000 hoardings, (both private and street) and space bookings on passenger shelters and traffic signals. The agency now has over 200 unreserved hoardings in Kolkata. Noegi, who has been associated with the outdoor advertisement industry for 40 years, said that the recent recession was really unprecedented.

Kolkata Municipal Corporation (KMC), however, which rents out the lion's share of the city's advertisement space, is unlikely to be hit by this sudden recession. In fact, the civic body's revenue from advertisement tax has been rising by leaps and bounds.

According to a KMC official, the civic body rents out space for display of hoardings on five-year contracts. "Even if recession hits a section of industry, our share of revenue from advertisement will keep coming," said a KMC official.

While KMC's revenue from advertisement tax stood at Rs 13 crore in 2005-06, the amount rose to Rs 21 crore in 2006-07 which further rose to Rs 26 crore last year. This year, the KMC advertisement department has set a target to raise Rs 50 crore from advertisement tax.

According to a senior KMC official, the KMC advertisement department, led by its manager, Debasis Sen, has been playing an aggressive role in augmenting revenue. It was Sen who collected Rs 57 lakh as advertisement tax during the recent festive season.

"We had to undertake several night drives to collect revenue from illegal display of hoardings, banners, festoons etc," a KMC advertisement department official said. The sudden crisis forced the agencies to go into a huddle.

At an emergency meeting of the Outdoor Advertising Association (OAA) last week, it was decided that KMC will be asked for a tax relief. "This is the only step that can be taken to counter the crisis. Every bit of support from the government is welcome. Or else, we won't be in a position to recover," said Banerjee.

Agencies did not rule out the possibility of retrenchment. Even though the issue was not discussed at last week's meeting, it could be considered soon, OAA members said. "The ball is now in the government's court. If they don't help us sustain our business, we might have to take an emergency measure," a member said.