“Holding company structure less likely to take risks”: Srinivasan Swamy

The first session of the Goafest 2011 Advertising Conclave on “Are agencies ready for the new decade?” began with a comparison of the old and the new, and surprisingly, there were a few things that have gone wrong with present day practices, according to Srinivasan Swamy, chairman, Goafest 2011 Advertising Conclave. He said, “Earlier, ad agencies used to be consultants, now they’ve become agents. Consultants add value, agents conduct transactions.” Further, the ouster of media from the agency structure is also a problem that worries him. “Agencies used to offer specialised, integrated services. Now, it’s a disintegrated offering,” he said.

The other maladies of advertising Swamy drew attention to were: the old structure of the agency not proving cost effective, reduced profitability, indiscriminate pitching (and developments like agencies being asked to pay for pitching) and young professionals moving away from the profession.

His suggestions for the future were: the agency should become communication consultants again, as well as change agents with leaner structures, and stakeholders in the advertiser’s business; they should also become more entrepreneurial as holding companies are less likely to take risks.

The next speaker was Rajiv Dube, director, group corporate services and director, Aditya Birla Management Corporation. To the amusement of the audience, comprising predominantly ad agency heads, he said, “The world of advertising revolves around the advertiser, not the agency. Agencies should get over their self-obsession and please factor this into your plans.”

He elaborated on his wishlist for the future from agencies: advertisers should become strategic partners, and not just a source of creative inputs; they should understand the business and help advertisers understand the business of consumers; the account manager is not yet the advertiser’s one point person in the agency, his or her role needs to be reinforced in a different way; advertisers would at some point like to deal with the agency for all services that they require; there is a need for investment in relationship building and talent nurturing, as the advertisers don’t want to deal with new sets of people all the time; agencies should help advertisers look at new modes of communication to reach out to the audience; senior management should be involved in interactions with the advertiser beyond the early days of winning the account; and the kind of content that comes out of the partnership should be responsible in terms of propagating the right values.

Predicting that the remuneration structure would have variable and fixed components, he ended with the thought, “Advertisers are not shying away from paying top dollar for good quality work, they just want to look at the relationship differently.”

The last speaker at the first session was Mayank Pareek, managing executive officer, Maruti Udyog.  He asked, “With the India story only to become stronger, are we ready for global scale?” He said opportunities in the future would be to find inroads to the rural consumer. Also, the recession wasn’t kind to advertising and this was also something that he thought should be looked at. “In 2008, the first big cut was the advertising budget. It’s difficult to quantify the benefits of advertising, and hence the industry needs to develop tools to measure efficiency and gauge consumers better,” he said.