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At the crossroads

Hamsini Shivkumar

The rapid rise of clutter in TV advertising and newer forms of communication such as PR and direct marketing are challenging advertising to prove its utility

THE advertising industry is ceding control of brand custodianship - back to clients or to an emerging breed of brand consultants - and sees its primary role as that of ad creator. This phenomenon has already occurred in the West to a large extent and is poised to happen in India too, over the next five years.

A number of developments over the last decade have transformed the media, social and business landscape in which the Indian advertising industry operates.

The media landscape has changed in two ways. The first is an exponential increase in the clutter in TV advertising. Consider these facts from TV Ad Index, a company that tracks ads that appear on television:

  • In 2004, there were about 5,000 TV commercials aired on TV. In 2003, there were between 3,700 and 4,000.

  • Cricketers starred in 108 ads while film stars featured in 259 (up from 179 two years ago).

  • In the car category alone, there were about 104 TVCs aired in 2004.

  • Amitabh Bachchan appeared in 67 ad spots on TV in the last 12 months.

    TV Ad Index estimates that the number of brands advertised on TV has gone up to 11,500 today from 3,000 a decade ago. This clutter on the box is only likely to increase.

    The second is the emergence of newer communication vehicles which have challenged the hegemony of TV, print and radio advertising - these include PR, events, direct marketing, the Internet, malls and retail visibility, in-programme and in-movie placement.

    Both these developments are placing enormous pressure on advertising to prove its utility. It is no longer automatically understood that the bulk of the brand's support budget will be spent on advertising. And even if it is, the onus to prove that the advertising actually had an impact on its target has never been higher.

    Given the clutter on the box, it seems that the one and only task for advertising is to cut through the clutter and get consumer attention, followed by retention in memory. Salience seems to be the only role for advertising and simple product benefits, the only positioning strategy worth pursuing. When the benefit is simple and basic, creative has room to fly, to unleash the full power of creativity to get consumer attention and retention.

    The social and cultural landscape in which advertising operates has changed. Firstly, today's consumer has become a confident consumerist, after two decades of experience with consumerism. He/she understands brand image and expects the brand experience to be delightful, all at a good price. He/she expects advertising to be sheer entertainment or at best, infotainment. Advertising is no longer information. The old model of brand as brand image built through a singular positioning and repetitive advertising no longer seems to be yielding results as it did earlier.

    Secondly, today's big spenders are telecom companies, car companies, financial services and consumer durables companies. Fast moving consumer goods (FMCG) is just one of them. These new categories have more complex touch points and function as experience brands rather than as product brands. All are crowded categories with similar product benefits and features, where the role of advertising is at best to make the brand salient and remembered. The sales process is what converts prospect into customer.

    Finally, the business landscape has also been completely transformed. Media has been separated from the agency and placed with media-only specialist companies. These new media companies spend a significant amount of money on proprietary analytical tools and viewership data to plan spends, as well as to report on results delivered. They also offer to manage the delivery of all communication programmes across all media as part of their service package.

    Remuneration on most clients is fee plus incentive or on a significantly reduced commission. All large agencies are under pressure to reduce head count and manpower costs to deliver the profitability expectations of the global holding companies that they are a part of. Medium and small agencies are being squeezed by their clients on commissions as part of the clients' cost saving efforts.

    The Internet boom and the explosion of management literature in the past decade has made specialised branding knowledge and advice accessible to all clients. It has also created a new breed of independent marketing and branding gurus in the US and UK. These gurus are not part of any agency and are hired by clients for brand advice. Indian corporates can also hire the services of these international experts for a fee, apart from some of the local experts.

    Within the industry itself, there is complete acceptance that the only worthwhile measure of an agency is the awards it wins in various national and international forums. Even clients judge agencies by the awards won and want to be seen as `award winning' marketers. This is a big change from a decade ago when senior clients viewed awards as an indulgence of the advertising industry and were ambivalent towards creating award winning work on their own brands.

    There are a few lone voices that speak up from time to time on behalf of the power of brand strategy - that the role of advertising is to build brands and business; that there are other positioning strategies besides basic benefits and roles for advertising beyond salience. But the tide seems to have turned away from these views.

    The upshot of all these developments is that agencies no longer seem equipped to take on the mantle of brand custodianship.

    Taking on the mantle of brand custodianship and being compensated for it in today's context requires:

  • Proprietary expertise and knowledge that they can bring to clients regarding brands and brand-consumer relationships that clients would be willing to pay for. This requires significant investment in intellectual capital - creation of knowledge as well as senior experts. Given the speed of obsolescence of ideas, this is not a one-time exercise, but requires ongoing investment. Few, if any, agencies today seem to have the appetite for this.

  • Ability to integrate their brand thinking into the creative product and deliver work that works - judged not only by the yardstick of business and brand results but also of advertising creativity, the awards. This is the area that almost all agencies struggle with. Sophisticated brand thinking brings complexity into the creative process. While there is a clear and undisputed need for simplicity, so is there a need to create cut-through creative that can win awards.

    Some of the leading networks have created a group of strategic planners to deliver on brand thinking for clients. But their ideas and thinking are delivered free of cost, as an attempt to create customer delight. And creative departments are not required to adhere to the planners' brand visions and brand models if these conflict with what is required to create award- winning advertising.

    In today's competitive and pressured business landscape, agencies find that they cannot serve two or three masters - the client, the brand and creative excellence. Agency management believes in the need to align the entire company behind a single goal - the goal of creating cut-through, award-winning advertising if the agency is to stay relevant to its clients.

    In other words, the role of the advertising industry is being defined more and more as ad creators; that is their core competence that their clients pay for. And the realm of brand custodianship and expertise is being vacated for newer players to occupy.

    (The writer is Vice-President and Strategic Planning Director, JWT.)

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