In the last five years, the advertising industry has witnessed double digit growth and that in most probability will continue. Growth in economy leads to growth of brands, and, therefore, growth for advertising agencies is a certainty as advertiser spends increase.
So when growth is certain, the question which is doing the rounds in the media-advertising circuit is – will that be in the manner the industry wants? Prominent personalities such as Sam Balsara of Madison World, Arvind Sharma of Leo Burnett, Ashish Bhasin of Aegis Media and Josy Paul of BBDO India offered their views on what are the upsides of the advertising industry in the coming years in the concluding session of the Advertising Conclave at GoaFest 2011.
Balsara, who moderated the session, started off by noting an issue. He said, “The issue which we need to worry is about declining profitability and not so much about absolute numbers. We advertising agencies have terrific ambitions. It will be only fair to say that in the past with whatever growth we’ve achieved, my sense is that we would’ve done better if we were placed better in terms of the resources we have.” He further said that clients needed to ensure agencies are well resourced, as it only then when agencies could deploy the best talent on the clients’ businesses.
Sharma observed that in the past few years the world over, advertising grew by more than 20 per cent. While that is true, salaries have also increased, and last decade being one of the tougher decades the business has seen, he feels the worst is over and that the future is bright.
“The world over, advertising is growing except for North America. Profitability is growing. Emerging markets is where all the attention is, and India is a star among emerging markets. However, he feels that growth in the next 10 years will be fundamentally different. We will have to work harder than what we did in the past. Things are changing rapidly. Consumers are changing, the way they consume media is changing. In a period where economy is growing faster than before, different sectors will need different approaches, because demands of these sectors will be different. So India will see unprecedented growth but not the same kind of growth we’ve seen in the past,” Sharma predicted.
While the growth story gives us a very rosy picture from the outset, what is worth noticing here is the fact that sustaining this growth will be a challenge. Sharma put his point forward and said, “Agencies will need to win more businesses, acquire more talent and have the capabilities of providing expertise in all areas of communication. Net-net, be more competitive.”
Balsara, on the other hand, noted that growth and more would be achieved if agencies embraced taking more risks.
For Bhasin, the challenge lay in taking the $5 billion advertising market to $440 billion in the next 10 years. On how different the future will be, he noted, “Consumers will build brands. Not the agencies. Not even the clients.” On areas where agencies needed to catch up, he emphasised, “We need to unite data and creativity. We need to forget about 360. We need to think 365. The consumer is everywhere. Look at ways to reach him.”
Bhasin further said, “We need to get out from the ‘mine is bigger than yours’ philosophy. Brands and agencies have to be irresistible.”
Balsara stressed that the focus should be on profit share and not so much on market share. “Market share is not important because eventually you will grow if you’re making profits.”
At the end of the session, Paul shared experiences that are close to his heart – of being in the advertising industry, as reflected in enthusiasm among youngsters and the client’s passion for advertising.