10/5/2014 Times OOH: Trailblazing the fast lane

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OOH OOH News Times OOH: Trailblazing the fast lane
Times OOH: Trailblazing the fast lane
by Rajiv Raghunath | July 18, 2014
Times OOH senior management talks about what it took to grow the companys
turnover ten-fold in a matter of 7 years
From Rs 30 crore to Rs 300 crore in 7 years! The Times
OOH growth story is a marvel in the annals of Indian OOH
industry. A little over seven years ago when Sunder
Hemrajani, Managing Director, Times OOH, took charge of
the companys operations, it was all about competing in a
highly commoditised OOH business. Then, the company
had bus shelters in Mumbai, a few assets in Pune, rights on
the DND Flyway, among others. Our turnover in FY07 stood
at Rs 30 crore, he recalls.
In March-April 2007, Times OOH took a big leap forward
with the acquisition of advertising rights in Delhis Indira
Gandhi International Airport and Mumbais international
airport. At that stage, we were looking to acquire all kinds of
assets airport media, street furniture, billboards, etc., and
we planned to do business in some 15 cities. But the economic meltdown that began in August-September 2008 put
paid to our plans, recounts Hemrajani.
Times OOH found itself saddled with high inventory. We had by then acquired assets in Hyderabad, bus shelters in
Bangalore, BRT Corridor in New Delhi, a few bus shelters in Chandigarh, and so on. Our revenues dipped and the
rough period continued well into 2009, he says.
Challenging times called for bold decisions. Having
assessed the future of OOH business in India, the
companys top management decided to jettison some of its
loss-making properties like assets in Jaipur and Kolkata,
BRT Corridor rights, rights to NDMC pole kiosks, etc. At the
same time, the management decided to hold its rates and
not capitulate under pricing pressure in a falling market
unlike what many other media owning firms did. Instead, the
company decided to offer higher value proposition to brand
owners through innovation and opportunities for customer
engagement.
Times OOHs trained its focus on transit media like airport
media, Metro media, and the like. We were convinced that
in the long-term this segment would attract large
investments, he says. It was expected that the Central government would privatise many of the airports in key cities
that in turn would open up new OOH business opportunities.
The company also decided to focus on doing business in six cities and not 15 as was the plan earlier. We also
decided that we would consider opportunities in street furniture and billboards segment only if they were exclusive, he
says. That explains Times OOHs acquisition of rights on DND Flyway and recently, Yamuna Expressway.
This strategy yielded rich dividends to the company, wherein
the turnover grew ten-fold, from Rs 30 crore in FY07 to over
Rs 300 crore in FY14. By March 2014, some of the key
properties that Times OOH had in its ambit were the airports
in Delhi and Mumbai, Delhi Metro, Yamuna Expressway,
DND Flyway, the just acquired rights on Mumbai Metro,
Patel Bridge and some 1,300 bqs in Mumbai, bqs in
Hyderabad bqs and Metro pillars in Chennai.
At the same time, Times OOH started to look at business
opportunities in Tier II cities through tie-ups with ley local
players. For instance, the company tied up with a major
player in Ahmedabad whereby Times OOH would market
those properties and do business with the local player and
leverage the vast customer base it had built over time. The
overriding objective of this strategy was to gain a firm foothold in promising Tier II markets and follow it up with moves
to acquire premium business like airport media.
Arghaya Chakraborty, CEO, Times OOH, asserts that as the Metro networks begin and subsequently expand in key
cities like Chennai, Bangalore and Hyderabad, the company will direct every effort to leverage the opportunities in this
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10/5/2014 Times OOH: Trailblazing the fast lane
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segment of transit media. However, he adds that while while we make new acquisitions, we will also continuously
evaluate the innovation possibilities in our current assets, largely around digital and interactivity. This will accelerate
the companys organic growth.
Organic growth will give us 15-20 per cent. But we are
hungry for more, says Chakraborty. Hence, he says several
acquisitions are in the pipeline.
Commenting on the emerging OOH business
opportunities,Chakraborty points out that different state
governments are working on various PPP project proposals
that will throw up new businesses in the non-metro cities.
While we have not operated in those segments, going
forward we will likely consider some of them, he says.
As regards digital OOH business, he is of the firm view that
it is still at a nascent stage in India. Except for the UK and
some parts of Europe, digital is something that all OOH
firms are just learning. Having said that, while markets
around the globe are gradually adopting digital OOH, India could leapfrog in this space, he says, while adding that
there arent many global learnings because the world is just learning. But digital is the future as brands now seek
interactivity instead of plain vanilla sites.
Customer Centricity
The companys strategic media acquisition plan is complemented by its sharp customer focus. Customer-centricity is
an important pillar of our strategy, says Hemrajani. We listen to our brand owners and we offer solutions that
enhance customer awareness of the brand. With the kind of media that we have, we also create engagement
opportunities, and even customer experience of a brand, he adds.
If a brand can be experienced in a controlled environment,
a brand manager will be willing to give you top dollars, says
Hemrajani. He explains that when a leading auto major put a
car on display at the Mumbai airport, the company collected
1,100 leads that paved the way for around 400 test rides.
Even if 20 cars were sold through this initiative, that would
be a good number, he says.
Likewise, a real estate firm reportedly sold some 30 luxury
apartments in about two months after they put a model of
their property in the airport, he informs.We did a roadblock
for a major telecom services provider and later our research
revealed that the brand had the highest top-of-the- mind
recall at the airport, he points out.
To set the ground for these offerings, Times OOH conducts periodic research on the use of its media properties and
makes high quality collaterals, which are then shared with customers through various customer connect programmes.
We do our research through independent agencies, and we make walk-throughs that no other media owner here
does, says Aman Nanda, Head of Strategy & Business Development, Times OOH.
Right through, Times OOH management keep an eagles eye on productivity improvements.
Shekhar Narayanaswami, Chief Financial Officer, Head
Legal, Commercial, Acquisitions & Administration, Times
OOH, says that whatever we have achieved is not by
accident. Productivity had to be an organisation-wide
initiative. It involved people, properties, processes and
financials.
First, the company worked on arriving at the right mix of
markets, properties, and products. While certain properties
were pegged to revenue-sharing agreements, certain others
were based on minimum guarantees. Hence, the sales and
revenue strategies had to be drawn up keeping in view all
these factors.
Secondly, the company broadbased the P&L ownership within the organization. We made all senior sales people
owners of profit. This was one form of empowerment. We created both revenue and profit KRAs for our people,
explains Narayanaswami.
We made P&L budgets for each person at the beginning of the year, he states, adding that if anyone asked for
investments, then the interest cost was added on to their budget. Thus, everyone became conscious of the profitability
factor, and discounting came down from 20 per cent to 12 per cent.
Talking about some of the cost saving initiatives, Narayanaswami says the company opted for LED conversion of its
sites with the goal of achieving a payback in 18 months. While this involved huge investments, the company expected
to save on electricity charges in a big way.
Further, the company also took up reverse auction to get the best offers before making any capex on its properties.
Times OOH values its partnerships with different vendors. We look at our vendors as partners, and we develop
vendors locally, helping them develop high quality products and services at reasonable costs, says Narayanaswami.
Sharing his views on the revenue growth prospects, G.Sharath Chandra, Chief Revenue Officer & Head Alternate
Media, Times OOH, says, When the business sectors do well, so do we. Interestingly, business of high-end brands --
be they real estate, auto, personal accessories, designer wear, etc., auto, etc. are not as volatile as other brands. So,
super-luxury real estate properties upwards of Rs 25 crore continue to get launched.Luxury cars like Jaguar
Landrover, Bentley, and others continue to reach out to their target buyers.
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10/5/2014 Times OOH: Trailblazing the fast lane
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Chandra points out that luxury brands like BMW, and Jaguar Landrover have been with us and continue tobe with us.
So is the case with top-end telecom and consumer durables Apple with iPhone, Samsung with curved its TV, and so
on.
Commenting on Times OOHs strident steps in the airport media space, Rohit Chopra, Chief Executive Officer,
TIMDAA (A joint venture between Times and Delhi International Airport Ltd), says, On one hand we are working on
improving our relationships. And on the other, we are striking agreements with agencies so that we get access to their
clients.
We need to retain clients we have done business with and make them spend more by extending offerings and
services like digital media, research data, etc.
He points out that in the airport media space, key advertising categories are consumer durables, automobiles, and real
estate. Ecommerce and travel portals are now emerging as a new category, says Chopra.
Chopra states that luxury brands are also bullish on airport media. We are holding many more rounds of discussions
with luxury brands, he says.
Pertinent to note that Times OOH has also put in place a robust CRM to raise its responsiveness to customer needs,
efficiency and productivity levels. Narayanaswamiexplains that the top management took cognizance of the need for
implementing a robust CRM system way back in 2007 but the meltdown pushed back the plan. Eventually, when the
decision was taken to adopt a CRM system, it was felt that the system needed to be driven from the top with
everyones buy in, he says, adding that the objective was also to ensure that the sales database became the
companys property and not that of the individual sales people. The system would also give everyone clear visibility on
the client calls and engagements. The CRM system thus acted as a moral check on people, he says.
Today, the system can throw up numbers like revenues for the current month or next with nearly 90 per cent accuracy.
Importantly, the entire sales team now uses the CRM system. Going forward, plans are afoot to implement a mobile
app that will enable the sales people to access data real-time when out in the field. Times OOH implemented the
salesforce.com CRM solution, and trained the users on its applications and functions.
People First
People form the fulcrum of the companys business. The 200+ people working in the organisation have had the
opportunity to enhance their capabilities by virtue of various HR initiatives by the top management. Chakraborty says
that most of the top management people having worked with leading companies strongly believe in a people-focused
approach.
To augment the teams all-round capabilities, the company runs:
Training programmes on specific domains like digital OOH media. The team is also trained on matters like making
high impact presentations. Some of the people are nominated for courses conducted in India by Harvard Business
School.
Management Trainee programme for creating a large pool of highly talented people, preparing them to take
leadership positions very quickly. The company recruits young talent from leading B-schools like XLRI, IIM Lucknow,
MDI Gurgaon, FMS.
A well-defined Performance Management System (PMS) for promoting an open and transparent organisation.
The company announces structural rewards and recognition, as also gives away shabaash awards to the high
performers during townhalls.
Looking Ahead
Chandra says that as the country accelerates its physical infrastructure development, new and compelling OOH
growth opportunities will come up. Also, with the new Government having got a clear mandate is expected to introduce
industry-enabling policies that in the immediate run will spur GDP growth. High economic growth will translate into
more ad spends, benefitting all players in the business. Times OOH as a clear leader in the industry will be no doubt
benefit in a big way from rapid GDP growth, he says.
Times OOH has adroitly leveraged the opportunities that came up on the dynamically changing OOH landscape. Way
back in 2007, around the time when Hemrajani joined the company, transit media accounted for about 14 per cent of
industry business, whereas billboards held a 60 per cent share, with the rest accounted for by street furniture projects.
By FY13, transit medias share had increased to 30 per cent, while billboards share fell to 55 per cent. All this, thanks
to airport media, says Hemrajani.
With a turnover in excess of Rs 300 crore, Times OOH commands nearly 18-20 per cent share of the industrys
estimated annual turnover of Rs 1,500-1,600 crore (ex. aggregate agency commissions).
The top management has now set sights on doubling its turnover over the next 5 years. This would have to be
achieved not through acquisition alone, but also by maximizing the returns on its existing assets, says Hemrajani.He
explains that most media owners tend to focus on the supply side, whereas the opportunity lies in driving demand
growth.
The company has invested more than Rs 200 crore in the airport business.Chakraborty says, We believe we
understand the airport business very well, so we are rightly placed to capture that business and grow.
While these investments are no doubt catalysing the companys growth, the top management also believes that its
unalloyed focus on quality and exclusivity will also change the way the Indian OOH industry functions. We hope that
the industrys share of the overall advertising pie will rise to at least 8 per cent in the foreseeable future, says
Hemrajani on a concluding note.
Tags:Sunder Hemrajani,Times OOH,Indira Gandhi International Airport,DND Flyway,BRT
Corridor,NDMC,airport media,street furniture,billboards,Yamuna Expressway,Arghaya Chakraborty,Aman
Nanda,Shekhar Narayanaswami,G. Sharath Chandra,Rohit Chopra,TIMDAA,
10/5/2014 Times OOH: Trailblazing the fast lane
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