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Top advertising agencies vie for Rs 100 cr LIC account

07-June-2004
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Top advertising agencies vie for Rs 100 cr LIC account

The Rs 9,500-crore advertising industry — made up of top 40 ad agencies — are pitching for the ad account of the Life Insurance Corporation of India (LIC).

With an ad budget of Rs 100 crore for 2004-05, this is the second largest public sector ad account in the country. Only Indian Oil Corporation’s ad budget exceeds this figure.

Breaking away from the 12-year practice, LIC has decided to do away with dealing with 45 agencies and empanelling just four agencies for its countrywide operations.

The top ad agencies — Lintas, O&M, Redifussion, R K Swamy/BBDO, Mudra, Mode and Concept — have shown keen interest to be empaneled, and give LIC an image uplift. LIC, to date, has received over 14 applications from leading agencies and expects more by the last date of inviting tender — June 8.

Some of the biggest PSU accounts are that of State Bank of India, with an ad budget of about Rs 65-70 crore, Unit Trust of India with Rs 30 crore, Hindustan Petroleum Corporation and Bharat Petroleum Corporation, each with about Rs 50-60 crore.

Today, LIC has 13 ad agencies at the national level and a host of others at each zonal level, taking the total figure to 45 agencies dealing with LIC’s Rs 100-crore ad account. Some of the leading ad agencies currently empanelled include R K Swamy/BBDO and Mudra. Earlier LIC also had O&M PR prior to privatisation.

However, when O&M bagged SBI Life Insurance account, they gave up LIC’s account since it is a usual ethical practice of public relation (PR) agencies not to have two clients from the same sector.

The exercise of empanelling four agencies is to improve LIC’s image through communications. “We feel we should move on from promoting just the brand to product branding. Customers should identify the product with LIC,” said LIC executive director (PR & publicity) A K Shukla.

Agencies having a gross income of over Rs 25 crore and having dealt with large corporations with an all-India network and having in-house facilities to make creatives will be shortlisted. Further, agencies with a minimum of 10 per cent billings from the PSU sector can make a pitch for the account.

LIC hopes to uplift its image and ensure greater accountability of those empanelled by reducing the number of agencies.

According to Deloitte & Touche’s report on the corporation, LIC’s ads have become stereo-typed. It recommended that LIC opt for just two or three agencies as is the practice worldwide.

The earlier consultant — Booz, Allen & Hamilton — had also recommended doing away with the practice of having so many agencies and had suggested LIC to have only one.

“Many of the agencies have been with us for the past 15 to 20 years and their work has either become stale or have become ‘politely’ arrogant,” said Shukla. “We have also found that many agencies would like to be attached to us and leverage the association,” he added.

“Worldwide, organisations have just two to three agencies on their panel. Campaigns can be better managed and agencies are thereby more accountable, as they act as partners with the organisation,” said Shukla.

“With greater number of agencies empanelled, motivation is not there as a single agency cannot be identified with the organisation,” he added.

“Sometimes it is difficult to make a choice from among the 40-odd creatives submitted, as each of the 14 agencies empanelled at the national level tend to give a choice of three to four creatives,” said Shukla.

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