'South accounts for less that 25 per cent of the overall advertising market' : R Krishna Mohan - O&M South President

The southern market is undoubtedly becoming increasingly critical for marketers. Ironically, this region in terms of its sheer advertising revenue contribution is shrinking. O&M president (Chennai and Hyderabad) R Krishna Mohan in an interview with's Sonali Krishna discusses the southern market, its drivers, constraints and the consumer.


How critical is the southern market in terms of advertising as regards the overall picture?

If you look at the size of the market, then the slice of the pie as far as advertising is concerned is shrinking in the south. This is largely due to markets like Delhi, which is growing very rapidly and Mumbai more or less maintaining a steady growth, which is very large anyway.

For instance, if you look at Chennai, we account for about six per cent of the overall advertising spends in the country. That's it. So, it is a fairly small advertising market. And here I am referring to advertising business that emanates from Chennai and not clients who spend a lot of money in Chennai but via their Mumbai agency. Bangalore would account for approximately 15 per cent and Hyderabad would be about two per cent. So in essence it would account for about less that 25 per cent of the overall advertising market. And this is shrinking.

Why is it shrinking?

What is happening is that Bangalore is not growing as rapidly as it was earlier. Delhi has taken over and is really driving the business. Currently it is going through a boom in the advertising business.

What about Ogilvy specifically?

Even for Ogilvy, it more or less follows the overall trends where O&M Mumbai is very large and contributes about 55-60 per cent of the total turnover, followed by Delhi, Bangalore, Chennai, Hyderabad and last of all Kolkata.

What are the major categories that are driving the southern market?

It is most definitely FMCGs; some of the big spenders being Cavin Kare, Henkel, Brook Bond and Britannia in Bangalore. The other evolving category is automobiles and the third large sector would most definitely be retail.

But will retail give a boost to mainly the mid-size agencies or will it affect the larger agencies as well?

It will definitely be a boost for mid-sized agencies. For example if you look at jewellery as a category, a lot of the times they partner with smaller agencies but they do a lot of business. If you look at outdoors specifically, it will give you an idea as to the amount of monies that is being spent in retail. The cellular business is another evolving category that is sustaining and driving growth.

Talking about O&M specifically, how did the agency fare in the southern market in 2004?

In terms of performance, absolutely fabulous as Chennai and Hyderabad have grown by 45 per cent over last year. And a lot of this growth happened because we moved from commissions to the fee based model. As a result, we have been able to charge some additional fees for work that was earlier taken for granted which was largely in the area of Ogilvy PR, direct marketing, Landscapes and our retail signage division. So our 360 degree offering has helped us quite a bit.

Could you throw light upon this new term which is extensively used called 360 degrees. Is it mere lip service or is it really being utilised?

For Ogilvy it is our cutting edge right across the world. This is really driven by what is happening in the market, where both the advertiser and the consumer are saying that you need to reach out and touch me in more ways than just mass-media communication, simply because of the high clutter levels that exist today. Also, from the advertisers' point of view, because it is so expensive. And for effective 360 degree advertising, it is very crucial to think out of the box and learn to touch the customer at various moments of his life. It is really about touching the customer during these "moments of truth" and making the brand promise come alive at these moments.

'Agencies today are not addressing the southern consumer'

Is that really happening?

It may not happen in a 360 way, but instead of just limiting myself to mass-media, if I can stretch it out to two other touch points then it is good enough. So, while we call it 360, I think what drives this phenomenon is the thought that one really needs to touch the customer at those various moments. In fact, it might not be desirable to touch him at every moment of truth.

For instance, I know that people believe that catching early morning walkers is a great moment of truth. But, the fact is that the walker does not think so. We have had instances where a client set up little booths near all the popular walking places. But, the customers saw this as an intrusion, saying that this is our moment of peace and not a moment of truth. So, the whole idea is taking it beyond the 30 second box and touching the customer in a more relevant and meaningful way.

360 degree helps to give an idea arms and legs and makes the brand promise come alive.

The classic case is of Bru. The brand promise has always been 'As good as South Indian filter coffee'. What Bru did was very interesting. What they said was, if you look at a moment of truth for coffee, it is usually first thing in the morning when one is reading the newspaper and drinking your morning coffee.

So, the question was how can Bru make its presence felt at this moment of truth? They did it in a not so intrusive way. They distributed little sachets of Bru along with Aavin milk packets. So, when you picked up your morning milk, you also received this Bru sachet and you tried it out. They managed to become a part of their customers moment of truth without being too intrusive. This is a classic way of doing 360 degrees.

Where do you see the growth coming for advertising agencies now?

If you look at the US and most other countries, the growth is really coming from direct marketing, interactive, event marketing and so in essence non-traditional media and not from mass media. In India, we are still at 85 per cent mass media advertising and 15 per cent everything else. But, in most other developed countries whether it is Europe, UK, Japan and the US it is more like 50 per cent mass media advertising and the rest constituting everything else. Which is why I believe that our brand ambition and our business strategy is very well intergrated.

If you look at the south markets, would you agree that that as agencies we are really addressing the southern consumer?

No I don't think so. This is largely because people sitting in Mumbai and Delhi think the rest of the world are like them. And so we get ads here which talk about 'Karwachauth', which is such an alien concept in the south. So, people are left wondering why on earth is the man showing some girl the moon (through the sun roof). And there are many instances to show that people up north believe that what works there, works here. It doesn't at all.

So what are you doing to address this issue?

What we are doing really is looking at a study of people in the south. And we are not doing it through traditional market research agencies but through sociologists who understand people behavior. So, there is a study of the Tamilian/Malyalee/Andhraite/ Kannadika as a race, how he or she behaves. Not cutting it by socio-economic classes. The research will throw light upon what drives the way they behave.

What strategic accounts have you bagged in 2004?

We got CavinKare Foods which is a huge source of joy for us. Because there is nothing like getting new business from an existing client as it shows that that your client sees a certain amount of value in you. We also got Arun ice creams, which is a very large brand down south. We also got Nalli Sarees which came back to us after almost 12 years. I think what is great about O&M is that we have truly been able to Indianise advertising. A lot of our communication is very regional and it reaches out and touches a chord purely because of that. And this is why we have realized that our brands with a large presence in the south need a little more help and hence our south initiative.

Could you expand a bit on your south initiative?

We are not quite ready for it as yet because our body of knowledge has to come in and that will happen in the next four to five months. So, once that comes in, we are looking at brands that have a very large regional presence in the south as well as regional brands which need to go out and touch a chord and find that empathy. And brands which are looking at tapping the southern market first. So, the aim being, becoming the agency which understands the southern market the best.

The other is looking at communication we are doing for our own brands and see how we can fine tune it in the south. Is there a little nuance that we can change to help that communication work better?

I believe you are also getting into B2B initiatives?

Yes. We have got into that area. We know the business, and hence we can help one business communicate to another. Essentially, B2B communication. It is called B2B. It has already been launched in Hyderabad and Bangalore and soon it will be launched in Chennai.

The other initiative is our people. Ogilvy was always known for how well it used to train its people. And I think somewhere down the line, because we have grown so much, we lost focus and sight of that. We have taken a decision as of last year that we would bring that training back. So, there is a huge training initiative which is then linked to how motivated our people are.

What about margins? Do you see them getting further squeezed?

No, actually we see margins going up in the mid-term, in the short term it will get squeezed as we are moving from commission to a fee based system.

As clients begin to realize that they will have to pay for services that we have not been charging them for earlier, the margins will grow.

Latest Reads
US$ 4.5 bn expected from IPL rights; SC recommends accounts scrutiny

The Supreme Court on Friday froze all financial transactions between the BCCI and state cricket associations by directing the apex body not to disburse any funds till it resolves to abide by the Justice RM Lodha panel recommendations on reforms by 3 December . The top court ordered that none of...

Television TV Channels Sports
TVS Tyres is co-presenter for Asian Champions Trophy 2016

Continuing its strong connect with sports, TVS Tyres has associated with Asian Champions Trophy 2016 by becoming the co-presenter. The Asian Champions Trophy is one of the premier hockey tournaments, a much sought after annual international competition promising some great hockey action. This...

Television TV Channels Sports
Q2-17: Zee Learn declares maiden interim dividend

The board of directors of the Essel group’s education company Zee Learn Limited (ZLL) have declared a first time ever dividend of 5 percent per equity share of Re 1 each for the quarter ended 30 September 2016 (Q2-17, current quarter).

Television TV Channels Factual & Documentary
Whether BARC action can stop unethical practices?

MUMBAI: Can businesses and industries practise their art of selling fairly although they have 'Fair Practices' training during academic courses, workshops and several ISO and other certifications? There seems to be the fear of the lawman, and not the law in India. If the traffic cop is watching,...

Television TV Channels Viewership
TV Superhighway: beIN, Yaddo, AfricaXP have joined us, says Magine CEO Ambuj Goyal

CANNES; Magine has secured partnerships with four of the industry’s most exciting sports, documentary and entertainment content providers. Partnerships with beIN, the international media group and owner of MIRAMAX; Yaddo, the new documentary streaming service headed up by former head of The BBC’s...

Television TV Channels Factual & Documentary
Colors emerges strong on strength of Naagin I & II

MUMBAI: One of the top rated shows Naagin Season 2 helped Colors reach a top-ranking position.

Television TV Channels GECs
Pakistan Broadcasters Association to oppose PEMRA Indian content ban

MUMBAI: The Pakistan Electronic Media Regulatory Authority (PEMRA) shocked both Pakistan and Indian broadcasters when it issued an order blanking out  all Indian content from Pakistan’s television channels on 19 October.

Television TV Channels GECs
Sony Pix to telecast 'Jurassic World' on 22 October

Sony Pix will take the viewers on a thrilling, adventurous journey with cloned dinosaurs in their Billion Dollar Premiere property. The channel plans to air Jurassic World on 22 October at 1 pm and 9 pm.

Television TV Channels English Entertainment
Sony AXN scripts deal with Pinewood; buys stake in SVOD service Hopster

Folks at Sony Pictures Television (SPT) are in a celebratory mood. Not only has it signed a six-series deal with Pinewood Television but has also acquired a minority stake in the London-based video subscription service for kids content - Hopster.

Television TV Channels English Entertainment

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories