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Karachi OOH costs soar

News, 19 July 2016

KARACHI: Outdoor media costs in Karachi have soared following a Supreme Court order that has resulted in two thirds of inventory being either temporarily or permanently dismantled.

Back in May, the Court decided there was no law that permitted the installation of outdoor advertising billboards and signboards on public property and instructed that all such structures – some of which pose a hazard in high winds – be removed within six weeks.

Consequently, more than 3,000 of the 5,000 billboards, pole signs, pylons and other outdoor advertising media across the city have been disabled, according to 24Grey, an outdoor advertising intelligence company.

"Based on the quality of intact inventory and the going rates in these locations, we estimate that Top 20 locations in Karachi for outdoor advertising will see a price premium of over 88% in per square foot rate while the remaining inventory in other locations will demand a 46% to 59% increase in price quotes" said Najiyeh Akbar, co-founder at 24Grey, in comments reported by Branding in Asia.

Its research noted that most of the inventory had not been permanently removed but merely temporarily decommissioned, indicating that the outdoor advertising industry was optimistic the situation would change again in future.

But last Friday the Supreme Court issued a new deadline for their removal and warned of contempt proceedings if action wasn't taken.

"It's understandable why the OOH industry is reluctant to completely remove this inventory," said Hameed Kashan, Team Lead at 24Grey. "They invested billions in installing it by getting all legal permits at the time.

"The Supreme Court ruling changes the playing field but as an industry, outdoor advertising will rebound by finding a new equilibrium with better quality and higher priced units," he added.

Outdoor advertising in Karachi was worth a reported Rs.950 crores a year, but on current inventory levels and pricing that falls almost 60% to around Rs.390 crores.

Data sourced from Branding in Asia, Tribune; additional content by Warc staff