Coverstory Pg [1]: A Renaissance In Indian Advertising

COVERSTORY
A Renaissance In Indian Advertising

It is springtime again in ulcer-gulch. You won't notice it unless you look hard. The business of advertising looks no different on the surface: clients continue to be unreasonable; life is one endless stream of meetings punctuated by a million (styrofoam, ugh!) cups of coffee; everything happens 26 hours after it was supposed to; and any nostrum that can quieten screaming stomach-linings is much in demand.

Look again. There's a hint of a smile under the perennial grimace ad-execs sport. There's a suggestion of a spring in the step of shuffling account managers. The boom is back in the consumer goods market (See Riding The Boom, BT, July 22-August 6, 2000). Advertising budgets, the first expenditure item to fall under the guillotine in hard times, are back on an upwardly-mobile slope. And sophisticated consumers, a slew of New Economy clients, and increasing clutter are pushing advertising agencies to explore the frontiers of creativity.

By Shamni Pande

Recent activity-both domestic and international-has seen a further consolidation in the advertising business. In May this year, WPP acquired Young & Rubicam (which has a 20 per cent stake in Rediffusion dy&r). Another advertising conglomerate, Publicis, which has a 60 per cent stake in Bharat Dhabolkar's agency Zen (acquired in July, 1999) merged Saatchi & Saatchi (which has a 80 per cent stake in Sistas Saatchi & Saatchi) with itself in June, 2000. And July saw the creation of Lowe Lintas India-the result of the October, 1999, merger of Ammirati Puris Lintas (part of the Interpublic group) and Lowe & Partners Worldwide.

Today, each of India's top 10 agencies has a global partner whose resources it can tap for anything from trends in other developing markets to the latest advertising tools. Lintas India, for instance, believes its association with The Lowe Group will result in some of the latter's famed creative prowess rubbing off on its own effective, but workman-like advertising.

Look harder. The advertising industry, which witnessed a growth of just around 7 per cent in 1998-99, and 1999-2000, is expected to grow by over 20 per cent in 2000-01. And figures released by ORG-MARG indicate that consumer durable companies spent 13 per cent more on advertising between January and June, 2000, as compared to the same period last year. Typically, advertising in this segment normally peaks in the second half of the year. So, where is the bubbly? Where are the dancing girls? And why is no one celebrating?

Blame it on the age of reason. If a subdued let's-get-on-with-work air hangs over the industry it's because this isn't Indian advertising's first spring. Nor are ad-executives the same wet-behind-the-ears innocents who didn't know how to react to the industry's first spring, 1994 (when it grew by a vertiginous 49 per cent). Agrees Sorab Mistry, 50, Chairman & CEO, McCann Erickson India: ''For too long, things tended to happen to this industry by chance, not design. The boom of 1994 was a chance affair-a fall-out of the economy opening up. We agencies were overwhelmed; now, we have a long-term vision.'' Adds Mike Khanna, 59, CEO, Hindustan Thomson Associates (HTA): ''I am more comfortable with the basics now. The situation is far more stable. We know what (growth) levels can be sustained in the long-term.''

The second wind of advertising

A number-heavy agency-by-agency report of the advertising industry uncovers a common refrain: growth. Thus, HTA (the country's largest agency) expects to notch up billings of Rs 1,210 crore by December, 2000. O&M, expectedly, promises to try harder. ''We expect to grow by 40 per cent this year and 30 per cent, next year. We will be the Number One before long,'' promises Ranjan Kapur, 58, Managing Director, Ogilvy & Mather (billings for year-ended December, 2000: Rs 1,000 crore). Lowe Lintas closed last year with billings of Rs 760 crore (Apr-Mar, 2001 projection: Rs 900 crore). And McCann Erickson, which billed Rs 347 crore in Apr-Mar, 2000, expects to keep pace with the industry and record billings of Rs 430 crore this year.

Only, this time round, agencies are readying themselves for imminent growth by creating the infrastructure required to cope with it. Infrastructural strength, believes FCB Ulka's 50-year-old chief executive Anil Kapoor, will soon emerge as the factor driving a company's choice of an advertising agency: ''It is high time agencies are evaluated using the same criteria people use to identify good stocks. Checking out the fundamentals is not a bad idea at all.''

Evidently, Indian advertising's bad years (1997-1999) have persuaded industry-denizens to change their tune from growth, at any cost, to sustainable growth. Ergo, the focus is on minimalism (achieving more with less), and on using tools developedeither locally or borrowed from international affiliates, and tricks learnt during the slump. Explains Santosh Desai, 37, Executive Vice-President of McCann-Erickson India: ''The big idea is just one part of advertising. Its implementation also requires systems, structures, and consumer insights.''

One form this obsessive desire for systems and structures has taken is specialist outfits, created not just to handle 'horizontal' communication functions like direct response, event management, and interactive communications, but also 'vertical' market segments. Trikaya Grey has Trikaya Grey Healthcare (to focus on healthcare and pharmaceutical), Trikaya Grey Rural Marketing (for rural marketing), and Trikaya Grey Sales Promotions (for promotions and events). O&M has OgilvyOne (for direct marketing), Ogilvy Rural, Ogilvy pr, and Ogilvy Interactive. Lintas has Pathfinders (for research), LinOpinion (the public relations division), Linteractive (for handling Net-related communication), Advent (for event management), and Lintas Direct for direct marketing.

Says Nirvik Singh, 37, CEO, Trikaya Grey: ''I see the trend of agencies nurturing specialist communications divisions. Especially those that are focused at areas with huge business opportunities such as telecom, insurance, healthcare, and e-Commerce.'' Seconds Arvind Sharma, 43, CEO, Chaitra Leo Burnett: ''These are times when businesses are undergoing rapid diversification. Advertising spends are rising and there are several opportunities for focused communications services.''

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