With the emergence of independent advertising agencies, large advertisers, such as PepsiCo and Airtel, are partnering with different agencies on a project basis rather than dealing solely with the agency on record. Is it a good idea for a client to spread resources thin and work with both network and independent agencies? Or do they fritter away resources in juggling partners and plans?
Founder director, Scarecrow Communications
There has been a lot of press about the “rise of independent agencies” in India. This trend has been fuelled by the decision of advertisers like Airtel, Pepsi, Nestle and Danone to award their advertising duties to independent agencies. In some cases, the advertisers have breached traditional alignments and formed new ones. It’s fair to assume that clients would prefer dealing with a single communication partner. Liaising with multiple partners is cumbersome, repetitive and expensive.
So the big question is: why are clients deploying more than one agency? The most important answer, ironically, lies in one word — cost. The cost of running a mega campaign based on a creative idea that may not be the best. Creative fees are a fraction of production and media costs and clients don’t want to approach the supremely important task of building a brand and generating sales through a penny-wise-pound-foolish approach. It can be big budgets or big reputations. The client needs the assurance and the final evidence of a great creative product before it goes on air.
The quest for a better bottom line has made manufacturing bases shift across the Pacific Ocean, from America to Asia. If a complex function like manufacturing can be offshored for economic reasons, why not creativity? In today’s borderless world, it’s not important where something gets done. The only parameter: who can do it better and cheaper? The marketer’s dalliance with independent agencies is the equivalent of creative offshoring and is as inevitable.
There are two other factors accelerating this trend. One, the advertising requirements of the Indian market have grown substantially without a corresponding growth in the ability of the advertising industry to service it. Also, there aren’t enough seasoned admen around to serve our mammoth economy. This creates more opportunities for new relationships to develop beyond global advertising networks.
Till a few years ago, the creative stockpile of the entire industry was largely concentrated in a few agencies. However, in recent years, the creative intelligentsia migrated to set up their own agencies, leading to a re-allocation of assignments.
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The other factor accelerating this transition is the changing profile of the creative fraternity from the stereotypical pot-smoking, lotus-eating, ponytail-sporting people. The new agencies are run by admen who understand the business of advertising as well as any suit.
Director & Chief Marketing Officer, Max Life Insurance
One agency on record (AOR) or multiple agencies — this has been an ongoing debate. Many corporates are adopting the latter model, but I have full faith in the single agency model.
Only one agency can remain with you through thick and thin — develop creativity, evolve the brand along with the marketer, guide future thinking as much as provide quick solutions. Unlike an independent agency brought in for one project, the AOR knows the brand, the products and services, the customers and the company’s internal processes inside out.
Some things are integral to a client-agency relationship — collaboration, trust, patience and communication for getting to that unified brand message. In a way, it can be compared to a marriage. The success of any marriage depends on trust, patience and candid communication. And deep rooted relationship, based on trust, leads to great business results.
Some companies like watching their agencies fight it out, thinking that the best ideas come from such environment. But great work arises out of an atmosphere of clear communication, collaboration, brainstorming ideas and having specific roles and responsibilities. An AOR provides continuity, stability and efficiencies that one-off, ad hoc, or project partners simply can’t deliver.
Typically, the introduction of a second agency happens due to one or more of the following: a) the brand has become stagnant; b) the business is going through troubled times; c) talent at the agency has deteriorated, or d) leadership at the client; agency or both sides has recently changed.
Often when the business or brand is challenged, the easiest thing to do is to make the incumbent agency the scapegoat; to blame communication instead of looking for strategic direction. However, if there is a genuine problem with the agency’s output, it is important to discuss it openly and give the agency a fair chance. If they are not able to deliver even after this, only then should one choose to look out. When a second agency enters the picture, it is best to evaluate their work not just on one project but a more sustainable basis. If they are found good, then I would rather hand over the entire brand building to them rather than have multiple agencies coexist. Multiple agencies may breed competition for a while, but are unsustainable in the long run.
We look at our agency partners as an extension of our marketing arm. One needs people who live, eat and sleep your brand.
CEO, Dentsu Communications
It is not an issue of network versus independent agencies. Clients will gravitate towards entities that deliver value. The right strategic inputs, along with the right recommendation based on the right grasp of the business and consumer context, will always be the foundation on which relationships are built.
When you are part of a global network, the ability to harness resources is greater. However, there are many network agencies that have failed to drive collaboration and bring things together for clients, despite having the resources. At Dentsu, our key agenda is to drive and develop integration capability around our client’s business challenges. This agenda is being driven right from the top by our executive chairman Rohit Ohri.
There are many examples of best integrated practices across network and independent agencies. But what is critical is that strategic, 360-degree planning and integration move beyond the credentials presentation approach of “what we can do” to a more realistic “what we are doing” tactic.
Recently, we worked with the Toyota brand team to develop and execute Toyota’s Etios Motor Racing programme. We decided to build our capabilities around the mandate. We created an in-house activation and events team to collaborate with the brand teams at the agency and at Toyota. From the launch film, the print and collaterals, planning the driver training and selection, to the two exhibition races at Chennai and Noida, PR and media tie-ins — it was all done by the integrated team. The PR programme was coordinated by one of our employees who is a PR specialist. We also drew upon the experience of professionals at Dentsu Tokyo who have been involved with the racing programme at Toyota. This was a crucial element and the strength of the network really came into play. Etios Motor Racing has now become our credential for integration, recognised by other clients as well.
Agencies may, at times, shy away from investing resources to build capabilities since they don’t see a long-term perspective. The short-term assumes more significance. We are still at a stage where various marketers are trying to figure out the most effective ways of bringing together and using specialist resources. At the same time, they are far more receptive to adopting newer delivery mechanisms and innovative ideas. And this is an excellent opportunity for communication agencies to bring together skill sets that deliver for the client’s brand and business. On the ground. In the Market. In reality.