DOES THE BRAND-AGENCY RELATIONSHIP FACE A TRUST VOTE?
Have trust issues between brands and creative agencies led to advertising losing its spark? Or is it just the need of the hour for the under-pressure advertiser to take a more transactional approach? BY NEETA NAIR It started from a simple exercise, where I asked seven admen to talk about their favourite ad campaigns from the past year, the question earned 20 seconds of silence from five of them. In comparison when asked to list outstanding ad campaigns from the past decades, the response was instantaneous and almost unanimous, ranging from ads like Surf Excel- Daag Acche Hai, Lalitaji, Idea- What an idea Sirjee, Coca-Cola- Thanda Matlab, Cadbury- Kuch meetha ho Jaaye, Humara Bajaj, etc. Attempting to decode the reason for the sharp contrast, Santosh Padhi, Co-Founder and CCO, Taproot Dentsu says, “It is not that the same creative guys who had created some fantastic work two years ago have suddenly become bad. Everyone is forced to be desperate; they all are just pushing it because of competition, impossible timelines, less trust, less money and various other things. Which is the last insightful campaign we witnessed that has longevity like Shubh arambh and Kuch meetha ho jaaye?. And where are the Zoozoos, Happydent and The Mumbai Mirror sort of story-telling work? Nobody is doing cutting edge work as there is huge pressure. Creativity needs some amount of freedom, time and money to put a decent product on the table in the massive cluttered audio visual media world.” While the retainer era of advertisers committing to one particular agency will not come to an end anytime soon, the project era is definitely beginning to kick in with several big brands opting to do projects on the side with several agencies, irrespective of whether they are with one agency on record. Brands, however, claim that they are not averse to long term engagement, but a short term one suits them better on most occasions. Explaining the trend Anita Nayyar, CEO India & South Asia - Havas Media Group says, “The project system was not so prevalent in the past. Today the advertising system has become so complex that there is a need for specialized agencies like social media agencies, areas where the regular retainer agencies may not have expertise in, so brands give an outside agency the project. I have spent three decades in the industry and I feel the agency-client relationship has become very transactional. Earlier there would be bonding, a long term relationship and partnership between client and agency, along with an emotional connect. Today, the need of the hour gains prominence. It is all about quick fixes and quick solutions.” But there are agency heads who feel there is also a reverse trend at play like Tarun Rai, CEO, J. Walter Thompson, South Asia who says, “I have been in the industry for two decades and have seen the clientagency relationship evolve. The key reason for the change is that till the mid-90s we had a full-service agency model. The CMO was, basically, dealing with the agency as the gatekeeper of all his/her communication requirements. Today, the CMO has many partners and the depth of the relationship is not the same as earlier. However, there are exceptions. And these exceptions are becoming more frequent. Many clients, including more than a few that we work with, are asking for the agency to, once again, be the gatekeepers of a large part of their communications requirement. So the relationship continues to evolve.” Further advocating the case for retainers Srija Chatterjee, Managing Director, Publicis Worldwide India says, “Smaller clients see value in only doing one campaign in a year, they go for projects and come back scouting for an agency the next year, obviously budgets are a constraint for them. But looking at a larger picture, it is never a good idea, every time a new agency comes in, you are looking at a change in the strategy. Brands may look schizophrenic and that is where the worry lies for me, more than the money aspect. In retainers we partner the client, have access to data and help at every phase in the journey.” Hiring a long term creative partner is important in an evolving, dynamic ecosystem like India. Amidst the clutter of advertising you have a consistent communication strategy, which is powerful, impactful and cuts through to consumers. And constantly changing the agencies can sometimes be detrimental to that. Take the example of Flipkart which worked with Happy Creative Services on the famous ‘No Kidding’ commercial with kids pretending to be adults which has to be one of the best ads there is. No matter where you see it, you know it is Flipkart. Years later the account went to Lowe Lintas which changed the brand idea to a more generic e-commerce plank which made it sound similar to competitor Amazon’s positioning. But the agency had the good sense to bring back the kids in the year that followed. Raising questions on whether it made sense to abandon an idea by another agency that worked wonders for the brand simply because the account moved. But Vandana Das, President and Managing Partner, DDB Mudra North says that is not always the case. ““We won one of our marquee FMCG accounts because we told the client to not do away with the ongoing central idea; since that had become an imperative creative asset to the brand. We maintained the core, but created different ads around it; thus ensuring that the positioning is not lost. The client may have multiple reasons to move away from an agency- like lack of a fresh approach to the challenges, getting stuck in a rut or cost reduction. Also, there can be other peripheral reasons like lack of brand thought or unmatched expectations.” For a brand like Suzuki which about four months ago changed all three agencies- creative, media and PR, the goal was consolidation and to find an agency that will deliver the same value at a lesser cost. Sajeev Rajasekharan, EVP, Suzuki Motorcycles India Pvt. Ltd says, “We decided to consolidate everything under Dentsu. Before Happy Mcgarrybowen we worked with two agencies – one for motorcycle and another for scooter. Now that we have one agency the overall cost has come down by half because when you have two different agencies you have to pay them a basic retainer fee each. We called for a fair pitch where our existing agencies had participated too.” There are also clients like Harshad Jain, CEO, Fever FM which is currently working with Ogilvy & Mather, who believe retainer models are not ideal these days, “Project based models are best, given the state of economy right now. Brands would like to conserve their spends and only indulge in investments which are a must. Clearly projects are more feasible at such times,” he adds. While others like Sushil Matey, Director- Marketing, Livpure and Mohit Ahuja, Senior Director – Marketing, Droom have confidence only in retainer accounts, “We always prefer retainership model as we treat the creative agency as our partner in progress. Project based agencies can never do justice to a brand as the involvement is limited and desired output is always a challenge,” says Matey. While Ahuja adds, “We have done small projects, digital content with other specialized agencies. But for our strategic communication we have always been with Contract Advertising. We get enough work done to justify the price of a retainer and have no plans to change.” While one may like to believe that the biggest beneficiaries of the project-trend are the smaller creative agencies, Navin Talreja, Co-founder, The Womb which has clients like Fogg, Asus mobiles, Diageo, Saregama all on retainer basis, begs to differ. “Agencies should not be taking on projects. Because at the end what is the value of the idea you gave the client, you may give them a big brand platform that they may run for three years but they paid you only to run one campaign, which is principally and philosophically wrong. Even from the client’s perspective it won’t work in the long run. Clients don’t want to invest adequate time in brand building efforts which is taking a toll on advertising. Bottom line, if you pay peanuts, you will get monkeys,” he signs off. “I feel the agency-client relationship has become very transactional. Earlier there would be bonding, a long-term relationship and partnership between client and agency, along with an emotional connect. Today, the need of the hour gains prominence. It is all about quick fixes and solutions.” ANITA NAYYAR “The key reason for the change in the client-agency relationship is that till the mid-90s we had a full-service agency model. The CMO was, basically, dealing with the agency as the gatekeeper of all communication requirements. Today, the CMO has many partners and the depth of the relationship is not the same as earlier. TARUN RAI “Project based models are best, given the state of economy right now. Brands would like to conserve their spends and only indulge in investments which are a must. Clearly projects are more feasible at such times.” HARSHAD JAIN CEO, Fever FM SHIFT IN THE ADVERTISER’S ATTITUDE For Rohit Ohri, Group CEO, FCB India, it is a fundamental shift in the client’s attitude that has reduced the engagement span with agencies and affected the trust factor. Ohri says, “Earlier, clients and agencies were always together in a partnership model; that has changed. Today, clients are all out fishing for that one big idea, a fantastic creative that would give them visibility in the market and credibility as marketing managers. Unlike earlier, the tenure for Marketing Heads or Brand Managers is two to three years maximum, in which they need to get out some shining work which will land them another job. So, marketers go shopping for ideas that build their resumes rather than build the brand. That is a negative trend.” While it works out as a silver bullet for the advertiser, overall it is a very myopic strategy for the brand. Projects are transactions and brands are not built on transactions. Typically, in a project, an agency is not really hunting for the root of the problem and solving it, but hoping to find a cut-throat creative work which gets noticed and does the job for the time being. But it works out just fine for newer advertisers, who are looking at advertising as a one-time effort in a year, and using the same creative all year long, like the learning app Byju’s, backed by Chan Zuckerberg. RETAINER VS. PROJECT Mrinal Mohit, COO, Byju’s says, “We started advertising two years ago. Then our requirements were less. One needs to interact with an agency for a longer duration and regularly when you are coming up with multiple creatives in a year, unlike us. We have one campaign a year and spend about 20% of our revenue on marketing. Going ahead, as our business is growing, we will need to evaluate if we need a retainership model at all. But at the moment, we are happy with a three- four month engagement for a TVC with the agency- Lowe Lintas. Ever since we started advertising, we have doubled our revenues. This year, we are slated to make Rs 500 crore. We don’t miss not having a retainer. Our ad is driving downloads anyway.” Several other brands too are working on a per-project basis relationship with multiple agencies, as opposed to relying on a particular agency to do all its work and build the brand over time. A few admen are claiming that this has affected output in a big way, as there is very little consistency between campaigns. While there is more money involved in a project, there is a lack of stability in it, both for the agency and brand, which comes with a retainer model. But Sumeet Narang, VP, Marketing, Bajaj Auto disagrees, “I don’t think there is any connection between the remuneration model and brand-building capability. An agency must be remunerated well, no doubt, but I don’t believe a retainer model works better from a brand-building perspective. We work on a commissionbased model, which is linked to our media spends, with three agencies – Mullen Lintas for Avenger, Ogilvy for Dominar, Pulsar and Platina and Leo Burnett for Bajaj V and all have worked very well for us.” Echoing the same thought, Mansoor Ali, Chief Sales and Marketing Officer, Hamdard Laboratories, says, “There is no model that’s right or wrong, and it depends on the business model at a given point in time, while considering the journey that the brands are undergoing. As far as we are concerned, both agencies we work with are on a retainer model. This model has definitely worked for us, considering the huge transformation we are driving across categories.” Meanwhile, for a brand like Motilal Oswal, which has called for a pitch only twice in 11 years, even though they have mostly been on a project model, sticking to the same agency is very important. Ramnik Chhabra, Marketing Director - Motilal Oswal Financial Services Ltd, says, “In 2006, we were on a retainer basis with Grey Group for a year-and-a-half. Due to the 2008 financial crisis, our advertising activities took a backseat. So there was no need for a retainer. In our line, we can’t be sure how the markets are going, and how we will be investing, so every year is a new strategy which is why projects make sense.” “In the past two-three years there has been a tremendous shift in the client-agency relationships. Clients don’t want agencies to be brand custodians any more, it is no more about managing long-term objectives and value creation and has become more business-driven and tactical.” ABHIK SANTARA Executive Vice President - Ogilvy & Mather Unless both the agency and client are equally passionate about a brand, and feel satiated professionally and financially, true magic will not happen. And that’s why I believe that an agency must not be embarrassed to discuss the M (money) factor, upfront. If an agency is not being remunerated adequately, they should walk out of the relationship. AJAY KAKAR AJAY BATHIJA ROHIT OHRI “The world is a lot more unsure today as opposed to the good old FMCG, consumer durables, era. Even then, people had started saying that we have been living a Quarter se Quarter Tak life, but now we have reached the ghante se ghante tak stage. Not surprising that certain clients don’t want to commit to retainership, instead favouring a three-month project.” SATBIR SINGH Founder & Chief Creative Officer, Thinkstr CK VENKATARAMAN Similarly, projects helped an agency like Contract in a big way to sail through the demonetization period, which sent the industry into a tizzy. Chakravarty says, “We are happier with projectbased clients because it is in and out, and is a good deal, especially because you don’t have to hire additional resources for them.” Vandana Das, President and Managing Partner, DDB Mudra North says, “Projects become exciting because they give you an opportunity to put your foot in the door with the big clients. If you have done a great job, then you could either turn it into a retainer or bag many more projects.” Meanwhile, there are others who see project-based work as a recipe for disaster. The creative head of a mid-level agency who didn’t wish to be named said, “Oppo is one of the highest selling phones in the world; but have you seen the work on the brand? They have used celebrities to compensate for a big idea and are using media muscle as the answer to everything. The real test is when a phone which is 1/10th the size of Oppo, just because of the power of the communication, sells more phones than Oppo. That is where the creative agency comes in and you can’t do without it.” Satbir Singh, who founded his own agency Thinkstr a couple of years ago, sums it up well: “You may call it the beginning of the project era. I won’t deny that 20 years ago too there were projects, but today it has seen a big rise, courtesy the start-ups who have extremely tight hourly projections, be it Flipkart, Uber or Oyo. The world is a lot more unsure today as opposed to the good old FMCG, consumer durables, era. Even then, people had started saying that we have been living a QSQT (Quarter se Quarter Tak) life, but now we have reached the ghante se ghante tak stage. Not surprising then that certain clients don’t want to commit to retainership, instead favouring a three-month project. But brand-building is not a project, it takes decades to build and can happen only via long term association.” The best example clearly is the Amul-FCB partnership and the longest-running marketing campaign in the history of Indian advertising, where the advertiser does not even want to see the creatives beforehand, and sees the witty billboards only when they go live. That is the level of faith the advertiser has in the agency, and the impact is there for everyone to see. Need we say more? @ FEEDBACK
Abhik Santara, Executive Vice President - Ogilvy & Mather elaborates, “In the past two-three years there has been a tremendous shift in the client-agency relationships. Clients don’t want agencies to be brand custodians any more, it is no more about managing long-term objectives and value creation and has become more business-driven and tactical. I have seen some of the biggest FMCG brands, telecom players, auto brands move away from the retainer model. Earlier, remuneration was linked to media spends, then came retainer model and now the payment is increasingly being done project-wise. Obviously, remuneration has become a lot weaker because clients are not looking at a long-term relationship. They feel the agencies are not as involved as they should be, but they need to understand that to do that, we need a certain amount of commitment from them.”
Several sources among the mid-level agencies complain that advertisers today singularly focus on saving money by cutting down the budget on advertising. This is achieved by getting competition into the fray, claiming that another agency is willing to do the same amount of work for 60% of the cost. So, an existing agency has had a grip on the brand for, say, three years, in the process of which they nurtured it and built a relationship with the consumer, investing their time on the campaigns and understanding the product better - all of which obviously doesn’t count for the advertiser, and cost does. Obviously, the new agency which has bid for less money, will only think of giving those 60 units’ worth of service and temporarily reaching the target, which won’t be the case with retainers, as they do have some liabilities.
Ajay Kakar, CMO, Aditya Birla Capital, who has spent 15 years on the agency side of the business and 13 years on the brand side, says, “Unless both the agency and client are equally passionate about a brand, and feel satiated professionally and financially, true magic will not happen. And that’s why I believe that an agency must not be embarrassed to discuss the M (money) factor, upfront. If an agency is not being remunerated adequately, they should walk out of the relationship. What they do instead, when they feel they are not being paid enough, is take on another client. So you didn’t give me enough time in the first place, and now you won’t give the second client adequate time either, so there’s a good chance you will lose both. The bottomline is that as long as a client is getting perceived value, he won’t worry about the fees. But if he doesn’t get value, every cheque he signs, hurts. If a client invests in a partnership and gets a brief-tobrief transaction, in return, he will complain. If he expects a Lord Krishna and in return gets his army, i.e., junior or inexperienced talent from the agency, who keep changing, he will definitely complain. And soon, walk out.” The company has been working with Taproot Dentsu on a retainer basis for five years now.
CEO India & South Asia -Havas Media Group
CEO, J. Walter Thompson, South Asia
THE NEED FOR CONSISTENCY
In 2001, Coca Cola raised eyebrows by handing over the Coke account to Lowe Lintas and within 36 days, going back to announce that it was moving the account to roster agency McCann Erickson. Several years later, the brand has continued its association with McCann. Explaining the need for a long-standing agency-client relationship, Ajay Bathija, Director Marketing for Colas, Coca Cola India says, “Coca Cola has been with McCann for more than 15 years from the Thanda Matlab Coca Cola era – and we have had a great partnership with Aamir Khan and Prasoon Joshi. Similarly, Thums Up has been with Leo Burnett for more than a decade. Most of our brands have consistency as far as our partners are concerned because they become true custodians of the brand. So it is a giveand-take relationship where the brand benefits. There could be a one-off case for a project, but for our big brands, it seems unlikely.”
On the other hand, there are relationships that have gone awry like the Horlicks account which was with J. Walter Thompson for over 80 years and recently moved to FCB India. Many would argue that Horlicks was a heritage brand and not what it was owing to the beauty of its ad campaigns, yet it marked the end of an era when the brand changed hands. Similarly Idea Cellular, which has been with Lowe Lintas from the time its logo and name were carved out, parted ways with the agency in August this year.
Talking about how long term relationships with agencies help in brand-building, CK Venkataraman, CEO, Jewellery, Titan says, “There is a lot of benefit in continuing in a relationship with an agency. There is a deeper understanding in bonds made with customers. In fact, the relationship between clients and partners is crucial to sustain good work. Tanishq has been with Lowe Lintas for 21 years and O&M with Titan for 25 years and it shows. The time-frame for the engagement has definitely changed, like it was a couple of decades in the 20th century and now it has reduced to five years or less.”
A FRESHER PERSPECTIVE
While some of the traditional brands share Venkatraman’s view, the new age ones crave for a fresher perspective from time to time, as far as agencies are concerned.. Radhika Agarwal, Founder, Shopclues says, “We have worked with the same agency, Enormous Brands, since inception. There is tremendous merit in working with the same agency in the initial stages. But, while long term relationships are good, sometimes you yearn for fresh blood, a new pair of eyes and ears. We are in the midst of pitches right now and it is a mutual decision between Enormous and us. We decided that we want to try out new agencies but are very appreciative of the work Enormous has done for us.” Today, marketing spends are dominated by several new brands, offering product and promotion-based services – for example, take e-commerce players. As far as the start-ups are concerned, consistency is hardly a concern and neither is building a long term brand and not surprisingly, one campaign turns out to be very different from the other. This holds true for some of the four- or two-wheeler brands too, the reason being that every campaign has been created solely to drive volumes. During a new model launch, several companies open up their doors to different agencies. For example, Royal Enfield has traditionally been a Wieden+ Kennedy client, but they have employed DDB Mudra on a project-based model for the launch of their new bike. In such a situation, the need to have continuity is not as great as it would be classically speaking.
Ashish Chakravarty, CCO, Contract Advertising explains, “It has happened several times in the recent past that a large client which has had a long term association with an agency, has given a project to a new or a small agency. While project-based clients are generally on the rise, it is not just a function of losing faith in an agency, it could also be that the client realized that their need is one film and campaign for which they are paying an agency an year-long retainer fee. So, they renegotiate the cost with the big agency they are working with and if they disagree, move away. For example, an agency like Ogilvy may not be willing to lower the price, while a smaller agency might just agree, afraid of losing the client.”
For ten-year-old brand Yatra.com, which has largely used a retainer model with the creative agencies it has worked with, the reason to move on from McCann WorldGroup to Ogilvy less than a year ago was slightly different. Says Vikrant Mudaliar, CMO, Yatra.com, “After working with McCann for nearly three years, we did a creative evaluation and realized that we wanted freshness in the campaign as we were repositioning and rebranding Yatra.com with a new brand ambassador. We currently have a one-year contract with Ogilvy which we may extend. But by and large, advertisers who don’t have long term vision on what their marketing plan looks like over the next 12 months, prefer not to go for retainers. They just want to get one campaign rolling and thus choose to do it on a project basis.”
CMO, Aditya Birla Capital
Director Marketing for Colas, Coca Cola India
Group CEO, FCB India
CEO, Jewellery, Titan
neeta.nair@exchange4media.com
Tags : Impact Feature