How often do we pause and ponder about industry issues that have a bearing beyond just our rigmaroles? Share insights that can further the common understanding? Or, at the very least, point at things that need to be set right. View Point - an exchange4media platform, will fill this void and become a source of understanding, action and perhaps some inspiration.
Is the Advertising business losing respect?
Gopinath Menon, Senior Vice-President, Media, TBWA India
Are advertising agencies losing respect as we delve more into a progressive economy? Is it the case with all developed and developing economies? What really is wrong with the advertising business and is it possible for a turnaround and get back some of the old glory without sacrificing individual dignity, mettle and credibility?
Being passionate about this discipline was not the main reason I joined advertising. For me it was a default decision as I could not make it into medicine much as my father had desired. The tough part was not joining advertising, but telling my father that I certainly was. He had spent half his life in the Army Medical Core as a Pathologist and the other half at the prestigious AIIMS. He was far away from the commercial world and knew little about advertising. Hence, when I told him of my decision, he wanted to know what this business was all about and how I could make a career out of it. His impulsive remark was “Agency“?
Agency to him was defined as “agents”. People who make a living out of others and anyone living off others was called a parasite in biological terms! That did not bother him even if it sounded cynical and rude to me, but the concern was if you are dependent on somebody else’s growth for your own, then you will not be respected for mental faculties and if you are not respected, then no amount of money can make up for that loss. As a result you will be statured accordingly in society. I quietly listened but told him I had made up my mind and he never interfered or threw advice at me, ever again.
Now after many years, I sit, ponder and rewind into that logic and maybe see the correctness of that wisdom, or the factors that have played a role in the dwindling image as we prospered.
The Media Dynamics Upsurge
Expansion in media choices changed the rules of the game in the early nineties. There were many questions asked on the investment part of the business and they needed a specialist to answer them quickly and convincingly. This resulted in media planners moving from the backroom to the front office. This created some chemistry issues within agencies as bright media planners were paid much more than the account management people, and the business handlers could not digest this easily. This was the start of the undercurrents that would assume significance as time went by. All involved denied this, though.
The Dotcom Bubble
The late nineties saw a lot of professionals from the industry create another one. The reason was tons of money and the joy of creation. All those who had the mettle and the hunger migrated to this business. Few survived as the bubble burst and even fewer did well. Nevertheless, it hurt the advertising business as wages had to be increased for a deserving few who stayed back, and this antagonized others.
Agency becoming Client
The tough times at the agency in the mid-nineties, mainly due to reducing margins, saw key agency people leaving and joining clients. The reason was the power that they ceased to have. Being on the client side made them the nerve centre of power. This new-found addiction resulted in poking too many holes in the agency’s thinking, invariably always by citing superior knowledge of the advertising business! These included questioning the pricing logic, payment terms and the final accountability in remuneration.
The Remuneration Debate
The big spenders were the first ones to question this and they always cited international policies as the main reason. They were integrating policies and India could be no different at all. Agencies were supposed to defend the sacrosanct 15% which they earned from media and this they could never do effectively. The reasoning could always be questioned as, at the end of the day, it’s charging for the mental faculties in the consultancy form.
Agencies’ role was to demonstrate understanding of different sets of customers which the client was a bit handicapped in, but the argument was of a good lawyer and a bad one. There were many agencies willing to pick up the business for less and this lack of unity has hit the agency business hard. The market performance incentive over and above the fixed fee was cited by clients as a catalyst for agencies to work harder. This seldom worked as advertising was the weakest of the variables in the marketing mix, and would get chopped at the slightest threat. Lesser spends resulted in the Brand Manger looking good on brand profitability for the year. Stupid and illogical, as it may sound, but the process continues.
The Business of New Business
Nobody has ever understood this business, but the so-called new business specialists claim to know all. They could not be living in a bigger fools’ paradise as clients do not know at times as to why they are calling a pitch. A CEO of a big TV network once said to me over a social evening that when they feel handicapped in thinking of new ideas or novel ways of creating differentiators in the business, they always call for a pitch as there will be at least 10 top agencies ready outside! The objective was never to shift the business but then if there is free advice available in the market, why shouldn’t the client explore and exploit it? The other clear trend is that even for a small piece of insignificant business the top agencies will fight. Creative glory was always the cited reason. This gives the owner-manager a big high and this becomes a practice. Still agencies do not learn and never will.
Lastly, the new business objective also is not devoid of casualties. Those hit are mainly the existing clients as they feel neglected and move away as there are many takers. Organic growth within agencies is hurt most because of the new business agenda. When clients who are happy with you over years move out, the agency has every right to feel upset about it as divorce is always bitter. This bitterness rubs off in other ways internally and externally. Still agencies did not learn and will rationalise the logic of business growth as it was the diktat of the fair skinned gentleman who will always knew little about ground realities.
The New Pedigree Emerging
There has been significant change on this front too. Earlier, more than a decade ago, advertising agencies used to get the first-day interviews at all the premier business schools and hence the quality of talent was never an issue. Not any more as the remuneration game has changed and advertising is no longer a hot, starting destination for them. The multinationals, the consultancies, the banks and other financial services have taken the lead, paying more than ten times what advertising agencies can dream of paying. This entitles the second rung of business schools getting centre-stage and so mettle is sub-standard. Mettle can be handled through training but lineage and sincerity cannot. The young breed emerging is very street-smart, they know the short cuts in life and are aware of what the boss wants to hear. This clarity makes them go up the ladder fast but often they lack business clarity as it’s never a priority. The net result is that the business of advertising is losing out with its customers.
The Agency Disintegration
This is the biggest reason that the “great banyan tree” of yesteryear has broken up into shrubs of uncontrolled growth. Hence, all gales and cyclones will uproot them and shake the system that cultivates. The advertising agency today has direct marketing, event management, specialized promotion cells and, most importantly, even media has moved away as an independent. This break-up is ideal as they can pass the buck around whenever a fiasco hits them. These fiascos are in good abundance today and are only growing. The client also uses this as an opportunity to move away to a new agency and be a bigger hero there. The incumbent agency can do little to stop this wave and the result again is heartaches and cursing sessions in the evenings.
How can we bring the joy back?
All the problems mentioned so far are not cancerous and can be solved by simple commonsense. More so when you are in a growing economy and the upsurge is intense. However, it’s not easy and nothing happens overnight. It will require like-minded people to get together and draw agendas that are common. Egos have to take a backseat. They need to stand together and realize that there is enough for all to gain in fame, respect and money. They should charge for pitching for a new business and that should be a diktat of the consortium -- anyone deviating from this should be warned and later blacklisted by all agencies and also by the media. The media publishers and networks should abstain from going directly to the clients for business and in case that happens, then such a media house should be banned by all agencies.
These rules may sound illogical or unreasonable but then, if you were to look at all that has happened, that too would have to be described with the same adjectives. The focus should be to drive a bit of fear and put some systems in place which are strictly adhered to. Lastly, agency people need to believe in what they are doing and also be proud of their 9-to-6 existence. Most importantly, they also need to have respect for their colleagues in other disciplines and other agencies as well. Compliments for a rival agency on a rival brand work should be encouraged and is to be a seen as a sign of maturity. This will result in the green cover increasing in the advertising business, and we all will breathe a little easier.
And articles like these will cease to be relevant.
(The author is Senior Vice-President, Media, TBWA India)