Saturday, November 04, 2006

Advertising - losing the lustre of the most potent marketing tool.

Advertising is one of the most potent marketing tool and my contempt is that the tool is losing its respect and its quality is diminishing or at least not improving. Memorable and Effective creativity is becoming hard to come by. And ironically I would put the blame on the advertising practitioner - the advertising agencies.

Even before I venture any further, let me clarify the meaning of advertising as I understand. Advertising as one of the most commonly used corporate words, has developed a variety of seemingly similar meanings. Some even say "media" to mean "advertising". Just the other day, our super super boss referred to us - a team mainly comprising experience in advertising industry prior to this company - as having media experience and therefore owning that "media attitude". Does this increasing fluidity of the meaning of advertising raise alarm and is this a cause of concern?

I am not going to get into this confusion of what meaning does advertising has in your mind. Let me clear it. Advertising to me is nothing but marketing communications. Advertising to me, is a tool to draw attention of a set of targeted consumers to the products and services of the advertiser through a mix of media apertures that the target consumers consume habitually. It is the effective messaging at every consumer touch point. The word "effective" would have a meaning given the objective of the advertising piece.

I am not going to give a thousand reason why advertising and advertising agencies are losing their respect in the corporate world. To me, it is just one reason.

Advertising Agencies have stopped adding value to the value chain. Let me be a prophet for a second and say "when you contribute value, you are considered valuable."

Advertising like all business activity is an outcome of cross functional departments within the advertising agency. Client Servicing department, Creative department, Studio & production, Online arm, Media, HR and most importantly the "top tier of management". I am taking it as a separate department as they play a unique, critical and of course important role in the cross functional scheme of things.

Lets look at each of these contributing arms in an advertising agency. If we do a bottoms up approach and analyse the function of the "top tier of management"; henceforth to be referred as management. They are the motivators. They are the torch bearer to bring in positive change. They are the keepers of the sanctity of the function of advertising within the agency and outside. However, the more I delve into this function, the more I am convinced that it is merely playing the role of policing. They are the escalation matrix for the client and the job actually gets done fast, the client way, if escalation is done.

Whenever I have tried to understand this function by speaking to the various front end junior level client servicing executives, I have found that they don't have any expectation of positive motivation; they don't view the management as a safe guard or a support mechanism; they don't see the management as a source of inspiration; they don't see the management as the harbinger of positive change.

How many agencies today have a weekly agency meeting? When I was in Mudra Ahmedabad, we used have a weekly meeting of the management, client servicing, media, accounts, HR, studio/production head - all function of the agency. All issues, concerns and developments were discussed and diagnosed. I wonder how many agencies have these meetings today. If at all there are meetings, they have become job status or job allocation meetings.

The management needs to ask a few questions:

How many times in a month they have set an example to the team in any aspect of the profession; how many times did they show the right way or the more correct way that a particular job could have been done; how many initiatives, however small or big, have they taken this month; do they have an agenda of meeting each and every team periodically to understand if all is going right; what are they doing to improve the knowledge domain of their teams (advertising after all is one of the most knowledge intensive businesses and we seem to have forgotten that!!!); Are they doing enough to give effective remuneration to retain talent?

The result that I today see, "we have a very few agency management heads that are respected and listened to in the corporate world. I am sure they are a few who are a big name in the advertising industry, but lets talk about the corporate world - the business world. If advertising is such key spoke of the hub called business, why don't we have a name like a Mukesh Ambani, like a K V Kamath, like a Premji in the business world who belong to the advertising industry. All the names that come to my mind are long dead.

Speaking about management, let me take a look at HR - the custodian of the employee well being in any organisation. I cannot recollect an agency who has an evolved HR department like a equivalent marketing company with the same number of employees would have. For example, Lowe in India and a Deutsch bank in India would have the similar number of employees. Can we compare their HR departments ? The answer would be a miserable no. HR is the most neglected department in the advertising industry structure. I cant fathom a reason. The only reason could be the short-sightedness of the management.

Currently, one of the most critical illness ailing the advertising industry is the lack of talent. The reason being among various others, remuneration packages. Ten years back, I would have said that the reason could be there are no education institutes which teach advertising. But today we have MICA, Narsee Monjee and so many others. However, the irony is that hardly any student from the best advertising institute in the country- MICA, wants to start a career with an advertising agency. Leave the IIMs (there was a time, not to get surprised, when students from IIMs joined advertising agencies. No I am saying the truth!!), even MICAns do not prefer advertising agencies today. HR can play a huge role in improving this scenario along with the management. But is anyone listening?

When I asked this question to one of the top management personnel of a top five agency, he said that "profitability and revenue is a constraint". I would ask a few question then... if advertising is a key function why would clients not pay more? Have we tried demanding more money from the clients? Are the agencies becoming like roadside agents lowering their fee structures in competition to their fellow agents. If yes, they why the hell agencies are cannibalising each other. We have so many advertising bodies to counter under-cutting. Even prostitutes have a strong association/body and any prostitute going for a lower rate is penalised heavily by the association/body.

The only reason of a price war is that the product is becoming a commodity. And there is no value addition. Are the agencies operating in a commodity market?

From another perspective, the short-sightedness of the management is once again a reason for this condition of low profitability in the advertising industry. Earlier, media was one of the important department within the advertising agency structure. Media used to bring in the mullah as media commission. Today, for whatever reasons unknown to my limited consciousness, media has become independent business with separate books of accounts. To me, media commission could have been financial resource to retain and sustain creative and management talent in the advertising industry. This decision has not only affected finances.

Today, since the client servicing department has negligible interaction with the media department, they do not understand simple media parameters like GRPs, TRPs, OTS etc. This short sighted change in the advertising business structure has changed or rather removed a fundamental parameter of a creative brief - Media. Creative thinking to be effective has a critical dependency on media to be used. This basic fact was not considered while taking the decision of creating media as a specialised division and a separate profit centre.

The other department that used to bring in the mullah used to be the print and production department. Today, most of the clients do this function independent without taking the agency in between. For clients, it is cost effective because the agencies are foolish to charge a commission of over 16% to execute the same. Here again the management could have played a critical role in keeping this business stream alive. They should have been successful in selling this profitable value addition that they were bringing to the client. The irony is that they profess to help sell the clients' products at a premium by building brand equity but they cant sell their own at a premium. Such a sorry state of affairs. Today, you will find maximum desperation in this department.

Even after all this, the agencies could have saved its face and added value to client's business by changing with times, getting into value added services. That didn't happen. The whole advertising industry was suffering from the blind fever of specialised services. The value added services such as "out of home solutions", "Internet marketing" etc were ignored or at the most kept at a individual level managing on their own. The old pundits (referring to management for a change) were ignorant of new media and were scared to bring in something that they don't know much about. As a result, independent interactive agencies like Mediaturf came into existence. Public relations as a domain was anyway a step sister for the advertising fraternity.

So the reality is that most of the agencies today cant provide the most common advertising concept of "integrated marketing communications". It means having all relevant media apertures talking effectively to the consumer segment. They don't have the ability and resources. Clients would have loved to have one agency for IMC. I feel pity for the clients and tremendous anger at the advertising industry for not being able to take care of a basic client need.

As a result of all this, two most visible faces of the advertising industry - creative and client servicing - are suffering. Pathetic remuneration leading to pathetic client servicing talent leading to bad briefing leading to bad creative output. It is a never ending vicious cycle.

I never thought advertising would come to such a state. I was such a staunch advocate of the business of advertising. My only hope is that every industry goes through a lull phase and then they sprung up to surprise everyone. Hope that day is not far away, as advertising industry is at its nadir of a possibly lull phase. Hope it is just a lull phase.

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