Mauricio Sabogal is the Global CEO of Kinetic Worldwide, a leading planner and buyer of out of home media. In the past, Sabogal was Global CEO of BPN, leading global operations for the newly-launched IPG Media brands, becoming the first Latin American to reach the position of Global CEO of a media agency. During his time at BPN he built the network, expanding operations to 26 countries and winning significant creative awards at Cannes Lions and Festival of Media, among other important festivals. In an interview with cat.a.lyst, Sabogal outlines the future for the OOH business and talks about how digital can actually help the cause of the medium.
Is regulation playing a huge role in restricting the growth of OOH?
Yes, that is a trend one is beginning to see at a global level. That’s both because of the clutter as well as the desire among governance to create a good environment for people. However, on the other hand, when they realise that OOH generates value for the community, governments are certainly open to allow them. In New York, Titan, one of the big OOH advertising agency vendors in the US, has got the contract to set up free wi-fi services for the citizens of New York, in spots that used to belong to payphones. The spots also become transit media avenues. Google has also invested in the venture. They are providing value to citizens in terms of free wi-fi. The government agrees that it is a service to the community, hence they are allowed to use the spots for advertisements. We are even seeing outdoor advertising companies advising governments on how to monetise their assets and get value through advertising.
Regulation is, however, a good thing because it ensures that there are fewer outdoor assets with a higher value and the value for the community is also maintained.
You say that social media and technology will actually help the cause of outdoor advertising media. Can you elaborate?
The first thing is the lesser the fragmentation, the better it is for us. The outdoor medium has always been seen as a fragmented industry. In India there is talk that there are around 2,000 owners of outdoor media assets. However, I am sure that it’s less fragmented than the internet. There are thousands of internet sites that are available for advertising. That said, social media will actually allow the amplification of outdoor media. If someone takes a picture of an interesting billboard, it becomes viral and travels all over the world. In the case of Peru, a single billboard caught the attention of the world two years ago. The billboard created potable water from the humidity of the desert air and won laurels across the globe. It was in the right location. It solved a situation for the community — lack of water. It was a creative idea, as the machine behind the billboard could be easily installed in a tower or a house, hidden away from the public view. However, it was cleverly positioned as the world’s first potable water billboard. So, such ideas lend themselves to be amplified through technology.
Then, why is the pie of OOH in a state of decline?
I don’t think so. The traditional OOH is stable while the digital OOH space is growing. That’s because digital is increasing the possibilities through OOH. Then digital OOH is sold differently — as it sells by the second, you can have multiple advertisers occupy a single spot. Third, digital advertising could cannibalise television but not necessarily the static billboards. I would say the overall business is expanding because of the digital OOH.
As the business is fragmented, will it lead to consolidation among static billboard owners?
You may see consolidation in intermediaries — brokers, sub-brokers and so on. The consolidation among intermediaries is happening in many markets like China, Latin America and so on. I see a resurrection among the intermediaries.
What are some similarities between India and Latin America?
The union within families is very similar. Both countries are at a similar stage of development. Of course, the culture you have is very rich here. When you look at it from the perspective of outdoor advertising, in both Latin American countries and India there is a lot of fragmentation. They are also at a similar stage as far as the evolution of digital is concerned.
Also, in both these markets, consumers are getting increasingly global which can be seen in the brands that are purchased by them in these markets.
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