Interview with Starcom India executive director (North), Anita Nayyar
 

"Advertisers are apprehensive due to CAS and rightly so"

Posted on 14 June 2003
 

"It is time we all got together and considered that the communication strategy, media ideas and creatives we provide actually come at a cost even if they are rejected."

This may have never happened in the world of advertising but it's a sincere opinion from Starcom northern region's executive director and industry's senior professional Anita Nayyar, who feels the advertising industry needs to change its way of functioning.

Nayyar is critical of several issues - especially when big agencies drop their commission percentage in some cases. She feels that when agencies do undercutting in their rates; clients, too, follow suit, and as a result, the work done gets affected. Rather than doing this, agencies need to set right examples and restore sanity, she says.

The entry of numerous media specialist agencies in a short span has not only ignited a war of sorts with shifting in accounts; and reports of undercutting in commission and poaching;but has also prompted varied comments from professionals on the way things are shaping up.

But there are only few professionals who easily accept the complicated state of affairs. And Nayyar shares her frank opinions by providing an insight to indiantelevision.com. She shared the challenges for mid-sized agencies in today's competitive market.

Nayyar, who joined Starcom in March this year, spoke to Ritesh Gupta on her career, state of industry, CAS and on operations of the agency, which has grown to a Rs 850-million agency in a year's span. Excerpts:

 

How has Starcom performed in Delhi in the recent past?
I have been here for three months now and I think we have been doing pretty well. We got Jindal Photo Films AOR account soon after my joining Starcom and post that we have done a lot of pitches, which largely have been full-service pitches. We have won Atlas Cycles and an NGO `Nexant', which is into energy conservation and now Honda.

So, three-four accounts in three months is not at all a bad beginning. As far as the operations in Delhi are concerned, there was a need to consolidate existing clients and also to add more to our list from the northern market. So things are looking good and hopefully we should continue to perform the way we have been doing.

 

What prompted you to join Starcom?
I have been in media for a long time and completed 20 years this March. I have been through lots of agencies like Sista's, O&M, Lintas, Grey and Mudra. Each one of them has their strengths and I joined Starcom, because, unlike most others, it has a strong research background. To that extent, this agency is very strong strategically not only in planning but also in buying. At Starcom, there is a decent balance between all the functions.

There is access to lots of international tools, understanding and researches that we use, which actually make studies/strategies on brands from various categories far more interesting and insightful, resulting in impactful media strategies. The other most striking attribute of Starcom is that it is an absolutely transparent agency. To the extent that there is a transparency clause as a part of our contract. I don't think any agency has got a transparency clause. We very proudly maintain that our source of income is only the client.

In Delhi, adopting this kind of an approach was a big challenge because this used to be a small branch. But, the branch has grown tremendously in the last one year. We started only with Rs 50 million last year. There is a huge potential in Delhi as well as the north market which we are tapping with a more focused approach. We have grown at the rate of client a month and let's hope we continue this way.

 

Do you think the media business is still evolving?
Evolution is a continuous process. I remember those days when media was only costing and execution of advertisements. Then came the concept of media planning and a different scientific approach to media with availability of the readership surveys and other data bases and big respectable names - people such as Roda Mehta.

Planning became a big thing and it was followed by focus on buying in the mid-90's when clients became more savvy and wanted the maximum bang for their buck. Suddenly, everybody was projecting themselves as a media buying agency or a media buying house. I think today we have evolved to being media services agency and from being "in the media business, we are today in media for business".

We actually operate as a profit centre without the backing of the creative agency and manage our own P&L (profit and loss). At present, media experts from the specialised function of media are not only media experts but have a huge focus on the media business running it like any other business.

 
"Forget media agencies, creative agencies are also dropping their fees. Guess, it is a survival strategy"
 

To be more specific, considering poaching, acceptance on lower rates, don't you think the media business is witnessing a slew of changes?
The fact is that we are no longer assured of the "legendary" 15 per cent commission we used to rightfully get. And it really seems a legend because, the time when we used to get the magical figure of 15 per cent seems to be a long time away.

Forget media agencies, creative agencies are also today dropping their fees. Guess it is a survival strategy.

Large media agencies today are known to work on really low percentages. It actually makes very little business sense especially for medium and small sized agencies, because the resource and infrastructural costs involved are huge.

Finally, it is the quality of the product /service rendered to the client which suffers. Clients with large agencies working on low percentages have at times raised their concern on the quality of the product being offered to them. But there are clients who understand the importance of an agency and pay 15 per cent because they realise the value the agency adds to their business. Wish there were more of them.

We are probably the only industry which consults free of charge. Most management consultants charge clients a hefty fee to tell them what they already know. It is time we all got together and considered that the communication strategy, media ideas and creatives we provide actually come at a cost even if they are rejected. So, I think somewhere in the race we are willing to do almost anything to grow and survive.

Looking at large agencies probably, it makes sense for them to work on differential percentages for others for the simple reason that all the researches, databases, infrastructure is the one-time cost - which they have already incurred. So if a large agency pitches vis-à-vis a mid-size agency or smaller agency, the chances are that bigger agencies might drop their rates as they can afford to do that.

Yes the advertising and media industry has gone through a slew of changes not necessarily to their advantage.

 

Then aren't they setting wrong examples?
They are definitely setting wrong examples. The kind of work agencies put in, they should get what they deserve. The industry itself is responsible.

 

So Starcom is not there really for volume business?
We give a lot of importance to look at the quality of the client and the value the client is adding to us in terms of our understanding of the category. I know we can't be choosers today the way media business is going.

But given a choice we'd rather not take up something which doesn't make any business sense to us.

 

Why has Starcom decided to tie up with creative agencies?
We are looking at agencies with like-minded thinking so that there is a cultural fit. We feel this is an area where we can certainly make a difference. The quality of product at Starcom is far superior and it is just the question of looking at opportunities and converting them.

 
"In fact, in Hong Kong, where CAS was implemented in January 2002, only 200,000 STBs have been installed till March 2003"
 

Coming to CAS, how do you view the situation?
There is a lot of confusion in the existing scenario. The government seems very adamant on implementing CAS on 15 July. As far as broadcasters are concerned, I think they will benefit in the long run as there will be declaration of number of subscription households viewing specific channels and hence reach numbers.

We at Starcom have done a survey with consumers with over 400 respondents to take the point of view of those who are most affected yet most ignored.

Advertisers are apprehensive due to CAS and rightly so. If they advertise after 13 July, they are not sure about pay channel viewerships. There is no guarantee that STBs will be in place installed and running smoothly by 15 July 2003.

In fact, in Hong Kong where CAS was implemented in January 2002, only 200,000 STBs have been installed till March 2003. So it can be as slow as that. They are expecting to install 500,000 STBs by 2005. So it is obvious for advertisers and agencies to be cautious about the whole thing and wait till things settle down and are up and running.

 

So how are you going about your deals in the first four to six weeks?
There are certain brands, in which only niche FTA channels are used which reduces the problem. But in case of pay channels, we will certainly go slow. Also there are lots of clients, who do not have metro focus. For instance, clients focusing on markets other than metros are not too bothered and are going ahead with their plans since numbers in metros don't bother them and they are reaching their audiences. We treat our clients money as our own hence like most others are very cautious.

 

What is the message for your up and coming ad professionals?
As far as advertising is concerned, it is an interesting and inspiring field. It is not only about glamour - as there is lots of hard work and effort involved. Media certainly is very challenging and complicated. It will be an achievement to be able to reach the right kind and number of audiences with so much of fragmentation and now CAS.

According to my experience especially from the institutes where I teach, lots of youngsters are taken in by advertising. There is enough understanding of the kind of hard work one needs to put in. Yes, the pace in the industry might have slowed down to some extent as the boom period has passed but this profession will continue to attract a lot of young talent.

There is a big HIGH in making a brand work!!!

 
Also read:
80 per cent viewers say will wait for CAS to settle before buying STB
 
Click for more MAM interviews
 

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