Media pitching gains steam

Almost Rs 1,500-2,000 cr worth of media business is up for review in the first 2 months of the year

This year appears to have begun on a tough note for most media agencies in the country. Media accounts worth Rs 1,500-2,000 crore are up for grabs as advertisers from automobiles to fast-moving consumer goods and electronics review their media buying and planning mandates. 

Some of them such as Maruti Suzuki, the country’s largest car maker, and Titan, the fifth-largest watch maker in the world, have found new agency partners in Dentsu Aegis Network and Madison, respectively. The accounts, estimated to be Rs 500 crore and Rs 200 crore in size, respectively, were earlier with IPG Mediabrands Initiative and GroupM’s Maxus.

Ashish Bhasin, chairman and chief executive officer (CEO), South Asia, Dentsu Aegis Network, said, “Yes, a lot of pitches have come together this year. But I view this as part of the business cycle. Those days of 15-year client-agency relationships are over. Hence, there is an increase in pitching activity. It is strenuous. But if you win an account, the effort is worth it.”

Some other media accounts that are up for grabs include ITC, Tata Global Beverages, Sony Electronics, BMW, Perfetti and Jaguar Land Rover.

While Jaguar Land Rover is part of a global media review process, the others are local in nature, industry sources said. Incumbent agencies, said sources, appear not to be retaining accounts in this round of pitching, putting added pressure on them.

Vikram Sakhuja, group CEO, Madison Media and OOH, who is defending the estimated Rs 500-550 crore ITC media account, said, “There are a number of factors that could trigger a media pitch. One is the need for best value in terms of service and price. The other is the desire to seek a fresh perspective. Some may want a new agency in the new financial year. Hence, a media pitch now. In ITC’s case, they told us that a media review did not happen in a while; hence, they were looking at one this time. We were prepared for it.”

Some agency heads believe the current round has been triggered by demonetisation, compelling advertisers to look at agencies offering the best rates.
 

“These are uncertain times and demonetisation, to some extent, has pushed advertisers to seek agency partners who can offer them the best price. While media rates have traditionally been a strong factor when considering a media buying and planning pitch, I find this a little pronounced now,” said Shashi Sinha, CEO, IPG Mediabrands India.

GroupM’s South Asia CEO C V L Srinivas believes the trend of pitching every few years is here to stay as the duration of client-agency relationships shrinks. “Earlier, client-agency partnerships would survive for 8-10 years, it subsequently came down to 5-7 years, shrinking further to 2-3 years. The result is the hectic pitching activity we see now. The solution to this is to emerge as a true business partner, where your focus is not just on traditional media buying and planning, but mandates beyond that such as sports and entertainment services, digital or data analytics,” he added.