Aurora Magazine

Promoting excellence in advertising

Building Smart Cities With OOH

Published in Nov-Dec 2020

Ahsan Sheikh illustrates how OOH has become key to smart city development.
Photo: EamesBot
Photo: EamesBot

Out-of-Home advertising (OOH) in Pakistan has seen many ups and downs in the last few decades. Although the power of the medium is undeniable, brands are sometimes sceptical about leveraging it, doubting its effectiveness or even its legality. Yet, OOH is arguably the oldest advertising medium in the world; one that has sustained itself due to its unmatched strengths. Globally, TV, print and radio are declining whereas OOH (especially Digital OOH) and the internet are the fastest growing. According to a recent PricewaterhouseCoopers study, OOH’s annual growth will outperform TV’s growth by 400%. This growth may seem counterintuitive, because given that it is the oldest form of advertising, a decline might have been expected. The explanation lies in the increasing significance of city spaces in the new ‘attention economy’. OOH is the only media that is un-missable and cannot be turned off.

OOH has adapted to changing times, new materials, spaces, technology, as well as to the inherent need for an effective communication medium for the community. Furthermore, brands that have leveraged OOH have directly or indirectly contributed to the development of a city’s uplift through public-private partnerships aimed at maintaining key assets, something that is absolutely critical especially for cities like Karachi.

In this model, OOH media companies agree to fund the maintenance of selected urban infrastructures in exchange for exclusive rights to sell advertising space. This approach is defined as a shift from ‘managerialism’ to ‘entrepreneurialism’ – and has become key to the development of ‘smart cities’. According to Olivier Heroguelle, Managing Director, JCDecaux India, ‘‘OOH now makes a pivotal contribution by combining public services with advertising. This gives citizens the benefit of free public services and utilities through assets like bus shelters, toilets, information panels, dustbins, benches, etc. which is funded by revenues from OOH advertising.”

The same entrepreneurial model is gaining traction in Pakistan, especially in Punjab, where as per the Parks and Horticultural Authority (PHA) Act, it can charge a tax in exchange for permission to set up billboards. The PHA Act specifies the policy for the layout, installation, safety and maintenance of installed OOH. The revenues from these spaces have helped PHA to develop and maintain green belts and parks in Lahore. In fact, in Lahore, PHA was able earn an estimated one billion rupees annually from permissions given to OOH and in my opinion, Lahore owes its current greenery and progressive outlook primarily thanks to OOH; for example, PHA in 2010 auctioned branding permission to 10 underpasses for Rs 35 million. Even in Karachi, most of the overhead pedestrian bridges were built on a BOT basis with sponsorship by OOH media companies. Unfortunately, these initiatives were put on hold in Karachi due to the lack of a legal policy.

Globally, there are several well known projects that rely on OOH media revenue. For example, Transport for London (TfL), the authority that manages London’s transport system, signed a long-term contract with Exterion Media to develop OOH media for British Rail. The partnership was launched in October 2016 and benefits from significant investment will fund the development of a world-class digital media estate, the introduction of new formats, a suite of premium displays in key stations and ambiance enhancements to selected sites. The contract award was part of TfL’s commercial development plans to maximise the revenue it generates from their assets aimed at reinvestment in the transport network. Similarly, in 2008, the mayor of Venice, in order to pay for the restoration of the 900 year-old Piazza San Marco, agreed to the installation of five huge electronic billboards on the Piazza to hide the scaffolding. In addition to the benefits for the city landscapes, citizens appreciate OOH advertising – a study by the University of Villanova published by OAAA suggests that 85% of people find useful information on OOH media vehicles.

In Pakistan, there is a misconception that in a recent order, the Supreme Court (SC) banned all OOH advertising; a misconception fuelled by traditional media in a bid to gain more share of spend. However, the fact is that the SC’s order calls for a legal framework for OOH media development with respect to aesthetics, layout, safety and public utility. As matters stand, there is no bar on installing OOH media spaces on private property. The SC was very specific in the order that no billboards may be installed in any space defined as public property – for example, footpaths and parks – and that all installations require proper validation that the structures are safe.

According to the UN, 68% of world’s population will live in cities by 2050 and lifestyles will continue to evolve as people spend more time out of their homes. The effectiveness of OOH was further underscored by the effects of pandemic. Although consumers spent less time at their work places, visits to the supermarkets rose by 16% and by four percent to general stores. This resulted in an 84% boost in OOH exposure in some areas. Furthermore, OOH helped municipalities communicate their safety objectives to people at large; for example, Kinetic Pakistan spearheaded a nationwide OOH campaign highlighting safety measures and encouraging citizens to stay home.

In conclusion, OOH has long been part of the fabric of urban environments, such as Times Square (New York), Piccadilly Circus (London) and Shibuya Crossing (Tokyo). Even Dubai’s Burj-al-Khalifa is often used as the world’s largest digital advertisement screen to create impact. Brands must leverage OOH as a key advertising medium, because in addition to its significant role in the consumer journey, OOH contributes to the development of cities both from an aesthetic and a funding point of view. Pakistan’s cities should develop more public-private partnerships aimed at turning them into futuristic metros.

Ahsan Sheikh is CEO, Kinetic Pakistan.