Dotcom Bust Takes Colours off Billboards

The roller coaster relationship with fickle dotcoms has proven them quite dear. Billboard companies have had to bite the dust thanks to the same dotcoms that took them high into the skies.

Thanks to the dotcom bust, more than 40 per cent of hoardings in the city are currently lying vacant. Outdoor advertising agencies have lost anywhere between 60 to 80 per cent of their clientele, and to attract fresh clientele, they are cutting down billboard prices by as much as 10 to 20 per cent.

"We have fallen flat on our face. We have lost 50 to 60 percent of our revenues. Because of the sudden vacancy, we have to bring down our prices. Nobody pays like the dotcoms. Even big portals are not spending on hoardings," said an official at a leading billboard agency.

Even Uni Ads, which boasted of 10 clients from the IT sector, now has one or two. "Software companies last year took majority of the hoardings and now that they have gone, almost 60 to 70 per cent of business has been affected," says CEO Mr Rajendra Kumar.

"Ten to 15 per cent of our business has got affected, though it's difficult to quantify in terms of rupees. We had four software clients and now none," says a sales manager at Selvel.

Yet, even as big agents claim occupancy is not a serious problem for them, small companies seem to have borne the brunt. Not only are they not finding any new dotcom clients, even existing dotcoms that had entered into year-long contracts are cancelling them.

"Last year, we made good money as dotcoms did not mind paying hefty amounts for prime locations. With the dotcom bust and also increase in number of hoardings suppliers, 80 per cent of our business has suffered. We had two clients who had taken up the hoarding for a year, but canceled the contract just after 3 months," says the manager of a small agency, unwilling to be unidentified.

So, despite increase in input costs such as landlord rentals and display taxes imposed by the municipal corporation, smaller agencies are cutting prices to survive. Even prime location hoardings have witnessed a slump.

Illuminated vinyl hoardings in prime areas such as Greenland, Khairatabad, Liberty, Basheerbagh, Abids, Chaderghat, Nagarjuna Circle, Begumpet, Paradise, Banjara Hills and Somajiguda, which used to fetch between Rs 75 to Rs 125 per square foot, just about 5 months earlier, are now being sold for Rs 50 to 80 per square foot, they say.

A 100X40 square feet prime location hoarding which commanded Rs 2 to 3 lakhs per month, is now fetching only Rs 5 to 6 lakhs per annum, says an agent. Less conspicuous commercial categories, such as Nampally and Masab Tank, and city outskirts and suburbs like Kukatpally have also fallen.

However, big agencies are claim it's only a brief slump and prices aren't coming down. "In fact, our unipole concept, which supports two or three hoardings on a single pole, is doing extremely well," says Mr Kumar.

"There is no reduction in prices because there is demand from other clients and even new kind of clientele such as schools," says Selvel's manager.

"Also, this is the time companies are allocating budgets for ad spending and by June it should be picking up. This is a low time for our business, but it will be in a good form by June," adds another.