A bitter fight has erupted between Reckitt and the advertising industry in India over the past month, after the consumer goods company's decision to impose a pitch fee for its media buying business. The country's biggest media buying agencies have rejected Reckitt's demands for up to US$10,000 to pitch, as well as compensation deals for subsequent drops in TV ratings and the payment of commissions for the first 12 to 18 months of the business.
The Advertising Agencies Association of India (AAAI) has already advised agencies against pitching for the account.
It is believed that up to ten agencies are involved in the boycott, including MPG, GroupM, OMD, Lodestar, Madison, Mudra Max and Prachar.
ZenithOptimedia, which holds the Reckitt media business in a number of global markets, and Initiative's Lintas India, are the only multinational agencies that are thought to still be in conversations with the client. Cost bidding exercises are understood to have taken place this week.
Anita Nayyar, CEO of Havas Media for South Asia, said she would not comment on Reckitt specifically, but said that, in general, media agencies should take some responsibility. "In spite of the AAAI directives there are lots of agencies who flaunt the rules," she said. "We provide almost free services. Why can't the industry put its foot down and refuse to work below a certain threshold fee or commission? If an agency resigns a business there will be loads of agencies waiting to pick it up. Clients have realised that it is possible to manage with small budgets."
Reckitt is best known in India for its range of germ killers and insecticides, including brands such as Dettol, Harpic, Vanish and Lizol.
The Advertising Agencies Association of India (AAAI) has already advised agencies against pitching for the account.
It is believed that up to ten agencies are involved in the boycott, including MPG, GroupM, OMD, Lodestar, Madison, Mudra Max and Prachar.
ZenithOptimedia, which holds the Reckitt media business in a number of global markets, and Initiative's Lintas India, are the only multinational agencies that are thought to still be in conversations with the client. Cost bidding exercises are understood to have taken place this week.
Anita Nayyar, CEO of Havas Media for South Asia, said she would not comment on Reckitt specifically, but said that, in general, media agencies should take some responsibility. "In spite of the AAAI directives there are lots of agencies who flaunt the rules," she said. "We provide almost free services. Why can't the industry put its foot down and refuse to work below a certain threshold fee or commission? If an agency resigns a business there will be loads of agencies waiting to pick it up. Clients have realised that it is possible to manage with small budgets."
Reckitt is best known in India for its range of germ killers and insecticides, including brands such as Dettol, Harpic, Vanish and Lizol.
According to figures from research company TAM, Reckitt was the second-largest TV advertiser in the FMCG category in 2009 after Hindustan Unilever. Reckitt is estimated to be among India's top three FMCG advertisers overall, with an annual ad budget of up to $40 million.
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