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Thursday, May 06, 2004

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Ban on tobacco ads: Outdoor advertising to witness a churn

Nithya Subramanian

New Delhi , May 5

IT'S the time to go outdoors. With the ban on advertising by tobacco companies coming into effect, outdoor advertising is likely to witness a flurry of activity. While advertisers are likely to scramble for vantage points occupied by tobacco ads in cities such as Mumbai or Bangalore, in the smaller cities, there could be a short-term drop in outdoor rates.

``There are a few prestige sites in places like Mumbai, which were occupied by the tobacco companies. Many companies have wanted these vacated and now for the first time, other categories can use these spots," said Mr Ashutosh Srivastava, Managing Director, Mindshare India. Cellular service provider, Orange, for instance, booked the hoarding space available at South Mumbai's Haji Ali even before the ban came into effect.

Media planners said the ban on advertising by tobacco companies was likely to make outdoor advertising an attractive option with downward pressure on prices due to excess supply, at least in the smaller cities and towns. "We expect a short term vulnerability," said Mr Sandip Tarkas, Chief Executive Officer of Media Direction (the media arm of R K Swamy BBDO).

"Normally, tobacco companies book hoardings for long periods of time. The prices could come down if there are no takers for these hoardings for long periods of time," said ad industry officials. The rates for hoardings could vary from Rs 10,000 to Rs 3 lakh a month depending on its size, position and height.

According to AdEx India, tobacco companies were among the big outdoor advertisers, spending as much as Rs 100 crore in the medium last year. Industry estimates the total spend on outdoors to be around Rs 600 crore in 2003.

However, Mr J.C. Giri, Country Head, Ogilvy Landscapes said that there was no immediate cause for a reduction in rates especially in the metros. ``There could be some impact in the smaller towns, but tobacco companies such as ITC and GPI have, over the years, been tapering spends on outdoors here. And there are several new categories which find outdoor advertising an attractive medium.''

In the metros, telecom, financial services, media and entertainment sectors use outdoor advertising while in the smaller centres insurance companies, two-wheeler brands and certain public sector and private companies prefer outdoors.

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