MxMIndia

Tag: AgencyDigi

  • Last week's acquisition of BBH by Publicis has led many to question whether agencies should stay independent or scale up with a network

    Stay solo or scale up with a biggie?

     

    By Tuhina Anand with inputs from Shruti Pushkarna

     

    Creative hotshops have always co-existed with the bigger networks and every now and then one hears of a celebrated hotshop being taken over by a network. Publicis Groupe, which already had a stake in BBH, has now taken 100 per cent stake in the agency. Considering that BBH is among the most celebrated creative boutiques, the development makes one think that the lifespan of an independent has become short and for them to scale, being part of a network has become a necessity.

     

    Bharat Dabholkar, who collaborated his agency Zen Advertising with Publicis Groupe in 1999, is very clear that the only way to scale up is to merge with a network. He said: “When we started, we were servicing homegrown brands; but we realized that with global brands coming in, we had a handicap in getting them on board. By being part of the network, we immediately got access to big, international brands. I think it’s a personal choice, if you are happy servicing a handful of clients, then you can remain independent; but if you have ambitions of growing your outfit, then the way ahead is to merge with a network.”

     

    Also read:

    Anil Thakraney: BBH must remain the black sheep

    “I have also felt that when a client is small in size or have just started with their marketing activities, they will come to a small agency but after having tasted success with grown ambitions, they ditch the small agency and would want a bigger agency on board. They still might continue to work with small agency, but that usually is on few projects,” he added.

     

    Giving an understanding of the situation, a well-known financial advisor to media groups said: “First of all, it depends on how well the creative hotshop is doing. My view is that if it’s doing well and wants to scale up, the only way to do that is to align with some network. And the network will align only if you are doing well. If you are just a creative whiz who’s not doing well, nobody will go after you. They will go after you only if you can bring something to the table. I think one has to also look at the age profile of the creative guys. If you are young, then you can afford to be in the saddle of a creative hotshop for a long time without considering the possible money that you can make because you can afford to wait. If you are in the mid 40s, then it’s time to sell it whenever you are at your peak. So that’s an important consideration, what stage are you in.”

     

    The scale a network offers is one way that helps the creative hotshops. The second is the access to full-time retainers with most of the bigger clients. The advisor echoes what Mr Dabholkar said: “Whatever you see or hear of bigger clients working with smaller agencies, it’s not a permanent relationship and it goes from campaign to campaign. So when you have that scale, you might end up being the only agency on the roster. So that’s an advantage. Also you need to look at networks which don’t have a great reputation in India, they would like to go after these agencies. For instance, Ogilvy would not like to go after anybody because they have a good reputation here. Whereas for a Omnicom, which is internationally well-known for its creative body of work, there’s nobody here in India. So the networks also look at it from that perspective, because it will be an image booster for that group in India.”

     

    But then what about losing one’s independence? After all in most cases the reason the creative people to start their own outfit is the independence that comes with it as opposed to being with bigger agencies. Mr Dabholkar clarified: “As for losing our independent streak being a part of network, my experience was different. Publicis was a delightful network to work with, as it was understood that we had an entrepreneurial streak so they didn’t interfere in our day to day functioning. However, the big help came in terms of sharing knowledge and supporting us with key inputs on businesses.”

     

    Sajan Raj Kurup

    Mr Dabholkar set up a small agency in Tanzania which has seen positive growth. He is not averse to collaborating this agency to a Network; however he feels that latter would not be interested at this point of time as they wouldn’t see much value in that part of the world in terms of advertising. However, he says that such collaboration helps the people who have worked, as it widens their horizon and opens new windows of opportunity.

     

    So it is clear that to scale up sooner or later, either selling of stake or some kind of collaboration is required. However, Raj Kurup who started CreativeLand Asia is very clear that he wouldn’t want to sell because he clearly believes in the India growth story, though he is open to partnering on his own terms. He is looking at expanding footprint and opening office in London. CLA already has a regional office in Singapore.

     

    Even Scarecrow Communications that was set up two years back is clear that they have enough going on their own and wouldn’t want to sell stake but are open to collaborating with partners that will help them in maximizing their potential.

     

    Naresh Gupta

    Naresh Gupta, Managing Partner, Bang in the Middle, who along with partners has got on this entrepreneurial venture recently, said: “There is a future for independents, and a big one at that. Yes BBH got acquired, and some more may get over a period of time, but that for me is the process of evolution. BBH did path breaking work, made a name for itself, and as brand will still stand for the same black sheep thinking even if it’s a part of a network. I see the same thing to happen here.

     

    Independents will be the new force. They are nimble, they don’t have previous baggage, they will take greater risk, be more lateral in terms of business model, and be a challenge to the large networks.

     

    The larger networks at some stage will always be interested in the independents precisely for the values of thinking different and taking risks. Till the large networks protect those values, it may not even be a bad thing.”

     

    Prasanth Mohanachandran

    Clearly there are both merits and demerits of aligning with bigger players. Prasanth Mohanachandran, Founder Director, AgencyDigi, said: “A network always has one advantage – of scale. The other advantage they have is, when it comes to multinational brands, most of the brand decisions are not taken in India but in other parts of the globe. When independents come into play, learning is going to be tough because it’s actually two companies talking. The good part about independents is that it is easier for them to think beyond conventional framework. Network agencies think through a set framework, there is a standard process for creative ideation. Also, in independents, egos are smaller.”

     

    Mr Mohanachandran feels that while scale is important, when it comes to talking to different markets, it might be difficult to take an idea across to different international markets. “If you play cleverly there are ways around it. If you have like-minded partners, it is easy to work with independents. They have the power to take an idea across the globe, someday it will happen, but it’s still few years away.  In a network of course, there is a larger pool of experience behind running an organization. There are more people, in a network you don’t have to worry about too many things so that’s always a benefit,” he added.

     

    So ultimately, it’s a personal choice. You can remain small and thrive or you can have ambitions to scale up where merging with a network seems a better option. Naved Akhtar and Freddy Birdy have been among the most celebrated duo in advertising who quit and started their own agency in 2003, are very clear that they want to remain independent.

     

    Naved Akhtar

    Naved Akhtar, who quit after spending close to 25 years in mainline advertising, said: “For us it was a question of what we want to do with our life. You can grow and keep running endlessly but we wanted to do our own thing, remain independent and enjoy a quality life. We deliberately don’t want to expand but remain small. We have some big clients like ITC and we are comfortable working with them and never felt that our size was an impediment in delivering.”

     

    Clearly, there is no clear answer to advertising agencies aligning with large networks. To each it’s own, we guess.

     

  • While email marketing may be a cost-effective medium enabling larger reach, the challenges that accompany it are also large

    Email Marketing: Vast opportunities make it a favourite with brands

    By Robin Thomas

     

    Easily the most preferred medium for a brand or marketer to get close to his consumer, digital has never seen such a fervent chase being put up by its users. While it was mostly search and display advertisements that advertisers flocked to, much of digital advertising is still unexplored territory. The importance of engaging the youth through social media marketing has only just been realized, while video marketing and mobile advertising are also gaining traction among marketers.

     

    According to a recent IAMAI-IMRB report on Digital Advertising (as on March 2012), the total advertising spends including classifieds was valued at Rs2,850 crore.  It is expected that by FY2013 the digital advertisement spends will be about Rs4,391 crore.

     

    The March 2012 report on digital advertising points out that search advertising constitutes about 20 per cent of the total online advertising spend or about Rs570 crore.  The report also states that advertisements on social media, email and video over the Internet constitutes about 3 per cent (Rs94 crore), 5 per cent (Rs144 crore) and 2 per cent (Rs59 crore) respectively. What is noteworthy is that a major proportion, around 53 per cent, of the overall digital advertising spends come from classifieds listing (Rs1,496 crore).

     

    With such infinite possibilities continuing to emerge on a frequent basis around the medium, one tool that has been a favourite with the marketers in the recent past is email advertising. With just a handful of players that operate in the realm of providing email services, it becomes all the more challenging for owners to come up ideas that catch the attention of the advertisers. The question is whether there is enough being done around the vertical or if companies are missing out on the edge that this medium can possibly offer.

     

    The IAMAI – IMRB Digital Advertising report already states that email advertising is worth 5 per cent of the overall digital advertising spends. According to industry estimates, email advertising is expected to grow from the current Rs144 crore to Rs250 crore in the next year or two. The role or purpose of email marketing is said to be about delivering the message and inviting consumers into brand engagement. Further, with mobile internet being touted to take internet inIndiato new heights, email marketing is expected to also thrive in the long run.

     

    Mr Prasanth Mohanachandran, Co founder, AgencyDigi stated: “email marketing is very relevant and important today, it is cost-effective and reaches to wide range of audience. While it is already witnessing growth, mobile will only further grow email marketing as nearly 27 per cent of mails received by consumers are on handheld devices. The challenge, however, is to find newer ways to reach out to the consumers’ inbox and not their spam. Segmentation in email marketing will also help brands reach their relevant consumers.”

     

    Mr Gaurav Nabh, Business Head, Quasar was of the view that since email is the most used platform for internet users in India, it is absolutely important and critical for any brand as a medium for reaching out to its consumer. “It is a communication medium, much like print, radio or TV. What you do with this platform and how you are able to maximize its effectiveness depends on the idea and approach,” he said.

     

    What is noteworthy about email marketing is that it acts as a reach building medium by allowing brands to segment the audience as per their demographics and profile, and thus directly targeting them. While email marketing may be a cost-effective medium enabling larger reach, the challenges that accompany it are also large. Most email advertisements tend to be unsolicited mails and thus enter the spam mail. Lack of creative email advertisements could be another challenge for this business and hence it must not only get more creative but, also innovative in terms of rich media and interactivity and so on.

     

    “A lot has been done with email marketing as a platform – from embedding previews of videos to lead generation, polls and voting. The limitations of the platform are based on poor bandwidth and technology limitation of most email clients and platforms. email marketing has been most successful for finance and real estate sector – helping them in generating leads. email marketing is here to stay as it has a role and purpose and the fact that it is cost effective. Email marketing will over time be seen not as a reach builder, but that of targeted awareness, and a medium to initiate and enable dialogue rather than just spread the message,” affirmed Mr Nabh of Quasar.

     

    Mr Saurav Patnaik, VP-Marketing, Kenscio Digital Marketing Pvt Ltd was of the view that email marketing or digital direct marketing does not lack innovation, but to a great extent, is lacking creativity. “The agency’s focus has been on producing beautiful communication, but not much attention has been given to this channel. The road ahead is bright for this channel of marketing. We are very positive about the future and India as a market is growing and more the penetration of the internet happens the bigger it will get in the next few years,” he said.

     

    Mr Gupta of DGM India noted: “Spam is a big issue, due to which it faces similar issues as SMS marketing. Like SMS, email marketing is also being done by loads of small/unorganized players. Due to this the larger players with opted-in databases are not getting their due pricing and share. Because of its nature, email marketing is being predominantly used for activation/ response oriented campaigns rather than branding campaigns. It is, in fact, very cost effective for these objectives. Also it is very effective in lead generation campaigns for BFSI, travel packages, auto, online listing businesses etc. It also works very well for highly niche products.”

     

    While industry players are of the opinion that email marketing is here to stay and will grow over the years there is a need to be innovative and creative in delivering the message to the audience. E-marketing must be used to send relevant information and brands must start a meaningful dialogue with their consumers through email marketing. In order to escape spam and reach their consumers directly, email marketing could be used as a perfect tool for permission marketing. As internet consumption through mobile or smart phones grow, and consumers are given unique experience on mobile, email marketing could possibly witness a whole new chapter in the way it gets consumed.