DEC. 8, 2002
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Two Slab
Income Tax

The Kelkar panel, constituted to reform India's direct taxes, has reopened the tax debate-and at the individual level as well. Should we simplify the thicket of codifications that pass as tax laws? And why should tax calculations be so complicated as to necessitate tax lawyers? Should we move to a two-slab system? A report.


Dying Differentiation
This festive season has seen discount upon discount. Prices that seemed too low to go any lower have fallen further. Brands that prided themselves in price consistency (among the consistent values that constitute a brand) have abandoned their resistance. Whatever happened to good old brand differentiation?

More Net Specials
Business Today,  November 24, 2002
 
 
McCann Moves Mass
The 'consumer insight' agency is finally tapping its creative foot the mass market way. Any more of this, and McCann-Erickson India could possibly break into the Indian advertising's Top Five.
Sorab Mistry, CEO, McCann-Erickson India: An agency for Hindi advertising. It's a strategy that could either make or break McCann in this country

Sorab Mistry has always had a benign look about him. The kind that doesn't freeze rivals in their tracks. But look again. Is that him, at that roadside betel-digestive stall? Or is it just our eyes playing tricks on us? Whatever it is, something has come over McCann-Erickson India's Chairman and CEO. A whole new manner, a new zest, a new style...a 'tashan'-an earthy audacity-to use the lingo of the latest Coke commercial.

But don't take the liberty of slapping Mistry's back with the most rustic greeting you can summon. Tear through the new threads, and it's the same advertising agency he heads, with its global perspectives, market burrowing tools, strategic rigour, insight-gleaning academia, congenital Coke fixation and Madison Avenue creativity.

Did someone say Madison Avenue creativity?

Well, from Levi's 'Easy To Get In, Bloody Tough To Get Out' to Opel Corsa's zip-zappy 'Achtung Baby!', what else would you want to call it? Except that this sort of print advertising is now the recessive part of McCann's DNA. The dominant part finds expression in the TV ad that equates 'cold' with Coca-Cola in North Indian village-speak. Whiffs of McCann's Hindi renaissance, as also a growing TV confidence, have been in evidence for almost three years now, actually. Think of the launch commercials for Kinley ('Boond Boond Mein Vishwas') and Sprite ('Aqal Lagao'). Both these accounts have switched agencies, but they earned McCann the Big Prize from the world's most famous client: the Coca-Cola account.

An account that brought McCann, an Interpublic group agency that held the 'globally aligned' brand worldwide, to India in the first place. An account the agency took for granted. An account it lost in 1997, to Leo Burnett, and had to prove its mass-market sensitivity to regain-which it did in 2001. An account that is still seen as the agency's raison d'etre. An account that could change both its image and fortunes in India.

WHAT'S NEW AT McCANN-ERICKSON INDIA
TRIADS
Team of three (account planner, account manager and creative) to crack skulls on the central brand idea
PERFORMANCE-BASED INCENTIVISATION
To be kicked-off in the next three months, right from the management trainee to the CEO; within the next three years, variable pay could form almost half of the senior-level compensation package
CREATIVE RESURGENCE
Rooted in the agency's strategic planning strength, the entire McCann team now increasingly thinks and speaks the language of the mass market.

An Image Business

For better or for worse, ad agencies can't escape their own images. J. Walter Thompson (JWT), as HTA is now called, is India's biggest agency, with a nice chunk of the Rs 8,600-crore Indian ad pie. Ogilvy & Mather (O&M), which got Kinley and Sprite, is the most creative. Lowe, as Lintas is now called, is the suds agency (for HLL). Mudra is the homegrown biggie.

If you're tempted to slot McCann next, as part of the Top Five, Mistry would be very pleased. The truth is that McCann's billings of Rs 468 crore last year trail FCB Ulka and Rediffusion DY&R's, making it the No 7 agency by size.

But its image is changing fast. From McCann the market insights agency, to McCann the insights-to-big-ideas agency.

It's an image that Mistry hopes will catapult McCann right into the big league. Worldwide, McCann is the world's second largest agency, on both billings, at $17.7 billion (Rs 85,845 crore), and gross income, at $1.9 billion (Rs 9,215 crore) for 2001. And it turned 100 this year.

"In 1993," recalls Mistry, "I came in with lot of attitude and ego, because McCann was among the top three agencies across the world." The agency he took charge of, back home as a veteran from the cola wars of Canada (he'd worked both with McCann on Coke and JWT on Pepsi), was called Tara Sinha McCann-Erickson. And it was this agency's founder Tara Sinha who was seen as India's top Coke brand specialist, having worked on Coke in Atlanta. Anyhow, by 1995, the global network had bought her out of the business, and Mistry had taken complete charge. "My vision," he continues, "was to make McCann-Erickson the fourth alternative agency in the country (at that time it ranked 24), and I have been at it ever since."

McCann has outpaced the industry, by and large, and business has grown ten-fold since 1993. "It's now in the past two years," says Mistry, "that we're poised to take on that mantle. For I have built up the blocks where no single client can destroy our legacy."

Hurt it? Yes. The recent exodus of big-budget accounts from Reckitt Benckiser, Adidas and Gillette (due to realignment) has been a big blow. Why, in July this year, General Motors moved its Rs 12-crore Opel account, ostensibly upset with McCann's creative. And only last month, Nikhil Nehru, the man next in the succession line for the top job, walked out to 'follow his heart', as they say when such things happen. All this, while the ad industry sweats to get through its recession.

With so much to groan about, why should anyone give McCann even half a shot at breaking into the Top Five?

Looking sharp: The agency's Executive VP and Strategy Planning Head, Santosh Desai, and National Creative Director, Prasoon Joshi (R)

The Strike Force

To start with, McCann has always been an agency that insists on probing consumer psychography to its unexplored depths. It's something that Santosh Desai, McCann's Executive Vice President and Strategic Planning Head, has nearly made a fetish of. Well, it probably works. Anyone who's dissected Kinley's success in toppling Bisleri as India's top bottled water brand would be convinced of McCann's strategy formulation skills. Shripad Nadkarni, the marketing chief of Coca-Cola India (CCI), even rates these as the industry's best. Other clients? "Their strategic planning function was good," admits an ex-client, "however, the creative was the road-block."

It was, as the industry joke went, 'Truth On Hold' instead of 'Truth Well Told', the McCann slug. Strategy without execution, quips Piyush Pandey, Group President & National Creative Director, O&M, is like being good at cricket at the practice nets instead of the actual game. Mistry doesn't bother to refute that. "In 2000-01," he admits, "clients were saying that 'your creative work, though good, does not live up to the strategic product'. I knew we had to move fast."

Much of that pressure was from CCI. Says Nadkarni, "It was like a hockey match, where McCann's strategic planning was taking the ball all the way to the opponent's D, and then it was getting lost."

Well, what McCann needed was a new strike force, and it found its lead striker in Prasoon Joshi, a part-time music lyricist who hopped aboard from O&M last year as National Creative Head-and found himself getting along with Desai like a house on fire. "I used to think that strategy was limiting, that it limited the poetry, the visual, generally good creativity in advertising," says Joshi, "That was before meeting Santosh."

MASS-THINK, HINDI-SPEAK: The agency's creative culture is adapting itself to the real thing out there

Says Mistry, "Imagine a 33-year-old so matured as to have a balance of incredible hunger and immediacy, and yet the ability to instantly turn tortoise if need be." Joshi isn't playing tortoise these days, that's for sure. He's busy "hiring people who understand middle-class India". Advertising must vibe with the market in its real idiom, he believes, something the industry has taken rather long accepting the truth of. "Increasingly," says multi-linguistic Mistry, who claims fluency in Gujarati, "my entire management team has started conversing in Hindi, even at board meetings."

The agency is even changing its entire work-order, not around semantic designations, but on a practical plane. The Delhi office has been reoriented around Triads of account planning, account management and creative people-who must work together on the central brand idea. "We will give it another six months before taking it national," says Desai.

Real Depth Of Field

Has McCann finally cracked the Indian market? Tara Sinha certainly thinks so: "McCann's product has improved, and they're doing great work on my favourite brand, Coca-Cola." The campaign has wowed much of India. The latest Aamir Khan starrer has lent itself to scooter stepney slogans, Amul hoardings ('Yaraon Da Makhhan') and even risqué jokes on the internet. "One ad is capable of changing the face and fate of an agency," says Joshi, the brain behind it.

But the proof of any real turnaround would be in the consistency of creative delivery. "Yes, they're making the right moves," admits O&M's Pandey, "But even in the past, they did hire good guys. I'd rather wait and watch before jumping to any conclusion."

Subhasish Guha, Executive Director, Balsara Home Products, which has awarded Babool to the agency, also measures his words. "Even now, O&M is creatively stronger," he says, "but McCann, which was an also-ran till not so long ago, has perked up now."

Joshi points to McCann's work for Radio Mirchi, Babool, Chlor-Mint, ITC's Aashirvad and Vaseline crack relief. Very local, yes, very Hindi-but not all universally admired. The Vaseline campaign, for example, sells the product but plays far too much on social stigma to win critical appreciation.

STRATEGY, BRAND INTEGRAL: Every brand's pitch is worked out to define its evolution

Besides, ask critics, what's McCann doing other than mimicking O&M?

"Yes, Ranjan's agency is creative," replies Mistry, "but that's the end and not the means for us. For, going the O&M way would simply mean destroying the integrity of what I have built." In other words, the strategic planning function remains commander-in-chief for every McCann brand. The unifying factor? An intense focus on results-also the rationale for the incentive-based compensation that McCann is experimenting with.

"That's all okay," says the head of a big agency in New Delhi, "but they have not been able to compensate for the nearly Rs 50-60 crore of business lost due to international re-alignment." Small local accounts continue to pass the agency by. Also, it's hard to see McCann stacking up on mega-accounts, unless there's a dramatic reshuffling of brands on a global scale.

Mistry is unfazed. At least half of the recent losses can be made up straightaway, he contends, and more later. What's important is that McCann is getting invited for the big pitches. The Rs 15-crore plus Reliance Infocomm business, for instance.

Even more encouraging: adfolk are watching the agency, for once. "Look at everyone," says Mistry, with undisguised pride, "even O&M. Now they're doing a reverse, trying to build a strong strategic planning practice." Agreed: for depth-of-field vision, both eyes must be equally sharp. Are McCann's?

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