SMEs are still a small part of the organised Indian advertising market.
Indian advertising has grown by leaps and bounds since liberalisation in 1991. And so has the Indian economy. Small and medium enterprises (SMEs) constitute a large part of the Indian business environment. Yet they comprise a very small segment of the organised consistent “brand-building” advertising market in India. Advertising is still dominated by the big multinational and national boys like Unilever, Proctor and Gamble, Cadbury, Vodafone, Nokia and Asian Paints to name a few. The average SME hesitates to put big bucks, consistently over a period of time, into large advertising campaigns, often restricting itself to small-time tactical efforts largely to create brand recognition at local level. Why is that so?
Every big boy today was a small boy not so long ago. One of the first registered brands in the world was made by a “small boy” called William Hasketh Lever way back in the 1880s. The brand was called Sunlight. He actually created a “silent” commercial for cinemas for the brand in 1907 and ran a series of press advertisements to create pull for his product when he was developing the market for branded soap in an era when people were using homemade product for cleaning — both themselves and their laundry. This “small boy” later grew to found (with his brother) the now famous Unilever — a large brand company with big advertising spends!
Even back home, India has its share of stories about SME that branded and advertised early. Zodiac was a pioneer in this field. Mr Noorani created the Zodiac man (“The man with a beard”) way back in 1961 to create a premium brand of ties. He later diversified into ready-wear and the brand remains premium in a highly competitive and crowded market even today. Nirma, Moov, D Cold, Hi-design, Tortoise and Fevicol are other brands from the SME segment that placed their faith in advertising early. Some created strong brands that have been able to take on the “big boys” and create new markets in India. Others have successfully managed to stomp out competition and define the category in which they operate. Yet such examples are few and far between. On average, the Indian SME has been shy to play the big advertising game. The reasons lay perhaps at both the advertiser and the advertising industry end.
The Indian entrepreneur is different from his western counterpart. In India, entrepreneurship is a means to “survive” rather than “thrive”. Culturally, he is happy being a “local” maharaja rather than want to dominate and be a national player. Historically, Indians have been insular — not driven to go out and conquer (Hinduism remains predominantly an Indian religion). This has made them risk averse — reluctant to dream big. Every entrepreneur who has dreamt big has behaved differently — Nirma, Airtel and Fevicol being strong examples of the same.
Given the conservative mindset, advertising tends to be seen as an “expense” rather than an “investment” — and a heavy one too — especially given the cost of mass media. All big boys invested big upfront to reap the benefits later — that’s the way advertising works. However, with limited-scale dreams, cost becomes a big deterrent to actually advertise big. Further, given the power of affiliation in Indian society, trade management is the bigger focus for a local player. It makes greater “immediate sense” to invest in relationship-building and push his product rather than depend on “consumer pull” to drive sales at a later date. Finally, there is a lack of appreciation of how branding can help the SME business. Given that the average SME is long-term-oriented — it is in the business for the long haul — its view of advertising is often short term.
This is where the advertising industry reasons come in. The industry has not taken the efforts to help this segment understand the value of advertising and how it works. Given the boom in the last two decades, business has been relatively easy to come by for the “big boys” in the advertising industry and the challenge has been to deliver. There has been no pressure to develop the SME market. The current big agency models are also not geared towards managing the SME market. The advertising industry has not been able to find a way to monetise the value of its idea or find a fair way of being compensated by market results. Both the commission and the retainer fee compensation models are “daunting” for the average SME player. The result: the only advertising experience of the SME is often with local players who end up doing “informative” advertising rather than “conscious” brand-building work, leading further to the SME scepticism about the power of advertising. Finally, B2B is a big section of the SME market, and the Indian industry has not developed adequate specialised skills to cater to branding in this segment — it is still nascent in evolution.
However, as we move into the future, the SME segment provides the next big opportunity. The development of new media — specifically the Internet — gives branding and advertising an opportunity to be more targeted at more efficient rates. Television too is getting segmented. It provides a prospective SME a chance to play the big game if it is willing to think big and dream big. It provides the advertising industry the next frontier to provide services to a new segment and get growth. There has to be the will to invest for the SME; there has to be the inclination to partner for the agency. If that happens, it could provide the next wave of creativity and excitement in advertising. Historically, the Indian entrepreneur has been more creative in his work when he has dared to advertise.
A small glue manufacturer, way back in 1989, decided to advertise his product above-the-line on television even though it was never seen by the end consumer and was a small proportion of the cost of the furniture in which it was used. This farsighted businessman created a brand called Fevicol which today is iconic in the furniture market, in the world of brands and the advertising space.
Something worth thinking about.
The author is Country Head-Discovery and Planning, Ogilvy and Mather India. Views expressed are personal. Comments at: madhukar.sabnavis@ogilvy.com
