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Noorings: The Rs 55,000-crore Indian advertising industry…

08-February-2010
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Noorings: The Rs 55,000-crore Indian advertising industry…

The single category of news that always finds its place in the ‘Most Popular’ and ‘Most Emailed’ sections of exchange4media.com is when a pitch is called, closely followed by when an account has moved. Every agency is perpetually on the lookout of advertisers who are shopping, and every other industry stakeholder is always interested in knowing who the new agency of anyone willing to spend is.

As we diligently chase these developments in our attempt to be the first ones to break it, we are often faced with the task of finding the account sizes of the businesses – unfortunately, the industry has come to a place where the size of the business has become the single currency on deciding whether the move is important or not. This has been true of the industry for as long as I have reported on it, but of late the allegations of inflated account sizes seem to have become a regular point of discussion in any industry get-together.

The year 2010 is just five weeks old, and over 15 businesses have already changed agencies. The combined account size that has moved is already touching Rs 500 crore, and mind you, we are still waiting to hear the results of the likes of the Unilever pitch, General Motors pitch; the Bharti Airtel pitch process has begun only now.

We get complaint calls after just about every pitch report on how a Rs 2 crore or Rs 3 crore account has been reported as Rs 20 crore and Rs 30 crore, and we reply with the same answer – “we have heard this from reliable sources”. In some cases, where we are lucky enough, the account size comes from the client officially and on-record, and in most other cases, we need to call six to seven different sources to get a gauge of the account size.

It has always made me wonder, why would people give exaggerated numbers? It cannot be to get a News Flash in exchange4media.com [well, that can be one of the reasons ;-)]. It may impact the perception of an agency’s overall size, but then don’t they have to show corresponding revenues at the end of the year too? And hang on, don’t many clients today operate on fees instead of commission, so the size of the business really shouldn’t be that important… Well as you can see, I am still wondering.

For those of us, who report on the Indian media and advertising industry, it is probably a failure of sorts that we have as yet not found a solution to this allegation of reporting inflated account sizes. Some may suggest, just stop reporting the account sizes, but I can assure you that that is not the answer. As I mentioned, today the single currency that decides how big a move is, is the account size. It continues to be the most dominant factor that tells how much interest industry stakeholders would take in an account move development, and hence, the most important element of any account movement report.

Knowing the size of a business is important. The exchange4media Group had launched the exchange4media Indian Media Agency Report last year, that amongst other things also measures the spends of top advertisers in measured mediums, so that may be a step in that direction, but there still is a long way to go before we have a concrete solution to this “problem” in reporting.

The year 2010 promises to be another action-packed year. Quite a few pitches have been called, and the chase is on to know whither goes the account. And yes, we would continue asking and reporting what the account sizes of these businesses are, and continue hoping we are getting correct and honest answers from the advertisers or the agencies or other industry sources.

Two years ago, industry leaders discussed at the GoaFest on how the Indian advertising industry can become a Rs 50,000-crore industry. The answer for that was in working at growing local entrepreneurs and bringing new advertisers to the fold. Hopefully, the industry would collectively be able to achieve this goal, and grow the industry, and journalists such as me, would be reporting on the true growth of the industry to Rs 55,000 crore, instead of just using it as a headline to get people to click on the story…

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