In any conversation on the Indian advertising industry, when the subject of agencies is discussed, a commonly heard comment is, ‘there are only 20 that matter’. And that may be the perception many hold for the Indian advertising industry that comprises over 500 active agencies. Most of the bigger agencies are either fully owned by global companies or have international alliances, but most of these agencies are of Indian origin and controlled by Indian owners.
There are various challenges that the smaller agencies face in India right now. And according to R Gopalakrishnan, Director, Tata Sons, the first challenge began in the mind. He observed, “Many believe that the large companies will stay and small will have difficulties, so everyone wants to be big. They think of scale advantage and globalisation and so on. But nature is the biggest example that small has survived better than the big.”
Gopalakrishnan laid out three points that every small agency should bear in mind. The first – change the attitude and approach towards change itself.
He pointed out that the Indian economy was experiencing an unprecedented pace of change. Gopalakrishnan said, “When you are going through change, you don’t realise the change. The Indian economy is growing at approximately 7 per cent per capita – every seven years, 1 trillion dollars would be added to the country nationally. From walking, we are getting into a rocket now and we need to be excited about this. It may be an accident of history, but we are witnessing the greatest drama that has ever happened and we have to face everything with that attitude.”
With Ability to Adapt and be Dispassionate
The second point was the ‘mantra of adaptability’. In the face of fierce change, the companies – big or small – that had the ability to change, would survive and grow. It was also important that the adaptation was holistic. Adapting also meant finding a niche for the company. Skill for the small agencies also comes in understanding a large company’s requirement for customised solutions or requisites that can help the company. He said, “The thing about adaptation is to keep moving, not just deliberating and planning.”
The other aspect of adaptation was clarity of objective. Many small companies want to grow in size, and while that is fine, growing in size is not the only strategy for growth. Gopalakrishnan said, “The problem is when the ant wants to be the dog – every company has a role to play in the value chain and it is important for the companies to realise this.”
The third advice for small agencies was to bring dispassion in the equation. He cited the example of Lakme and how Tata companies sold the brand to Unilever, and said, “If you have created something that has an economic value, then you must be able to consider all options to transpose that into the next level, and sometimes it can be about selling the company you have created.”
And When the Answer is to be Big
Clearly, the ways to grow for an agency need not always be about size. But as Gopalakrishnan put it, for some, the road ahead could also be to growth in scale. And that is the route Dentsu India’s Founder Chairman Sandeep Goyal had taken when he set out on his own in 2003. Goyal shared his experience to amplify that the game could be played at League A, but a few things were important.
He observed, “My takeoff from the David-Goliath story is that it is when the underdog decides not to play by the rules of Goliath that he wins.”
Goyal had a checklist that began with a good foreign collaboration. He recalled, “When I was in conversation with Dentsu, there were others in that race too – Rediffusion, Madison, Triton, Capital, Dhar & Hoon, Leo Burnett and so on. It needed planning and a lot of work.”
He explained Dentsu India’s next steps that challenged many myths. He said, “Everyone said Mumbai was the advertising and media capital of India. We started with Bangalore. We contested and won against the biggest of agencies. We worked hard on identifying and retaining the good people of the agency, because end of the day, this business is about the people.”
Goyal asserted on the importance of industries like mobile as future growth sectors. He pointed out some of leading international advertising players that were still not present in India and cited that as another growth opportunity for agencies in India.
His final point was, “You miss 100 per cent of the shots you don’t take.”
Gopalakrishnan and Goyal were speaking at a forum organised by The Free Press Journal in Mumbai. The forum also saw Hansa Research’s MD Ashok Das addressing agencies with advice on how smaller agencies could use research for their business growth. He highlighted points on beginning from understanding consumer, customer mapping and segmentation, product attributes, understanding distribution and moving to the final offer that would make an agency different for its clients.