Ad agencies should cut costs, invest in technology

Ad agencies should cut costs, invest in technology

 

VARCA: Advertising agencies should cut costs and invest in technology, experts at the Goafest 2011 summit said.

Cutting costs and employing technologies that can save recurring costs found a common ground with Reliance ADAG president brand marketing and Big TV CEO Sanjay Behl and Ernst & Young, media and entertainment partner and national leader Farokh Balsara.
 
Behl cautioned that excellence comes at a cost and agencies have to hire the best practices to increase profitability. “If automated systems are hired, wastages can reduce”, Balsara implied. “While doing media audits for our clients, we have seen instances where agencies have lost out because the system and processes employed have let them down.”

Managing a service business is completely different from managing a product business, said Behl.

Behl was speaking at the second session of the Advertising Conclave, discussing what ad agencies can learn from other service industries. The session was moderated by Advertising Agencies Association of India (AAAI) president Nagesh Alai.
 
Behl also discussed about various tools that are required for a successful services business. “Service companies should understand that they can’t excel in everything they do. They need to define experiences created by the brand and not its features,” he said.

The session was initiated by Tata Consultancy Services HR vice president and global head Thomas Simon who began by drawing parallels for recruitment in both sectors. He detailed the various processes hired at TCS to recruit the right candidate and suggested that the advertising sector should follow similar methods.

Simon said, “We just do not hire the talent, we also develop them.”

Simon discussed various other talent engagement, selection processes and training programmes carried out for employees at TCS. “In India, we are an average 28-year-old workforce. Meeting the instant gratification and work life balance needs for this generation is very important.”
 
Balsara highlighted the importance of people measurability and advised hiring fresh talents to give a new approach for the client. He suggested that at least 10 per cent workforce should be from overseas or with PSU backgrounds.

Yahoo! India CEO Arun Tadanki drew similarities between the problems faced by advertising agencies and technology service companies. Tadanki said, “Issues faced for hiring talent in agencies is similar to ours as engineers too are important but difficult to retain. Over the years, we have realised that smaller towns are a great source for finding new talent and maybe agencies too. We should look in that part of the country for recruitment.”

On the new structure, Balsara was of the opinion that the fragmented business structure - media, creative and PR - should be combined to offer synchronised solutions for the clients. He suggested that all specialist agencies should be gathered under one umbrella so that they can concentrate on extracting the best out of the single-agency model.

Tadanki stressed on the need to have a differentiated approach among agencies. “Agencies should let go certain clients to focus on value generation, accountability, reaching out to newer customer segments and investing in growing categories like digital and mobile,” he said.