There is a lot of conservatism among consumers these days: Sunil Lulla

Sunil Lulla is Chairman and managing director of Grey Group India

Ad industry growth for the last year will be lower than anticipated, but the sense of optimism is still there, Sunil Lulla tells Sangeeta Tanwar
 
What has been the impact of demonetisation on the advertising industry?
 
Let us accept that consumers of goods and services faced a sudden and huge shortage of money supply. Indians like to hoard. So whatever money they had they decided to hoard immediately after the announcements related to demonetisation. So purchase was restricted to essential items. For most categories, there was a huge drop in consumption in the months of November and December. However, there has been a pick-up in demand in January and early February.

 

We must also understand that corporates have a contractual obligation to close their business books by March 31. On this count, many businesses are running behind their business plans. And that’s across industries — whether they advertise or not. And this has happened because a lot of consumption has vanished. Fast moving consumer goods, for instance, saw a demand drop of 10 to 25 per cent. Categories like auto and real estate have also seen a sharp drop. The issue is, there is a lot of conservatism among consumers now. Brands have responded by reducing media exposure and cutting down on advertising and marketing activities. After demonetisation, businesses are taking short-term decisions and are waiting to see how things go. Having said that, many clients are back on the drawing board with plans for 2017. With a good monsoon, businesses are expecting consumption demand to go up. The growth percentage for our industry will be lower than anticipated. But the sense of optimism is still there.

 
Grey seems to be conspicuous by its absence in award charts these last few years. How can the agency work its way back among the top shots in the awards league?
 
The entire work ethos of Grey is based on culture. Culturally we keep a low profile — we do not believe in speaking louder than our brands. Our work speaks for itself. The focus is always on capturing the relevant consumer culture in our creative work. Last year, we won Radio Grand Prix award at Spikes Asia Awards. This goes to reaffirm that our work meets international standards. We are a big size agency and our focus has always been on having a reasonable size of clients. This year, Grey unveiled campaigns for the Indian Army, Navy, Air Force, and the Coast Guard. All these are big government arms and big accounts. We also broke a Pantene campaign featuring Priyanka Chopra and came up with a campaign for Britannia cakes. We set up brands — the brands that we work with are No 1 or No 2 in their markets. All the brands that we work with are looking at growth, in sharp contrast to what is happening in the market. Some of that growth is coming from category expansion and some from taking away market share.

 
 
What are the skills and resources that a creative agency needs to survive in an increasingly digital world?
 
We have a digital practice for the last 15 to 20 years. We have worked for brands such as Adobe, Mondelez, and Saint Gobain among others. There are two kinds of work that we do for clients in the digital space. The first is the campaign work for consumer brands and the second is the business to business work for corporates, institutional brands and small and medium enterprises. A digital campaign has key elements such as banners, digital images, video, and data etc. Agencies are also working big time on building social media profiling for brands and are engaged in online reputation management as well.

 
What’s your view on the segregation of creative and media functions?
 
I think that ship has sailed. For those of us who grew up working in an agency that offered all the services under one roof, the change came as a bit of a shock. Today, there is a great degree of specialisation in the industry. As there is specialisation in media, there is a great degree of specialisation in strategic thinking as well as in the creative services. And the practice has come to stay. We work as an integrated communications strategy for a number of brand including GlaxoSmithKline and Dell. Brands in any case expect their creative agency to play a key role in integrating the communication offering, irrespective of the media platform.