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| Interview with Starcom
India executive director (North), Anita Nayyar |
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"Advertisers are apprehensive
due to CAS and rightly so"
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| Posted
on 14 June 2003 |
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"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:
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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.
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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.
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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.
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| "Forget
media agencies, creative agencies are also dropping their fees.
Guess, it is a survival strategy" |
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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.
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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.
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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.
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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.
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| "In
fact, in Hong Kong, where CAS was implemented in January 2002,
only 200,000 STBs have been installed
till March 2003" |
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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.
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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.
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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!!!
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Also read:
80 per cent viewers say will
wait for CAS to settle before buying STB |
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