Arati Rao
Mar 31, 2012

Live Issue: What’s the point of splitting media mandates?

Jyothy Laboratories’ recent move drives Arati Rao to pose the question to the experts, and if it’s the way of the future

Live Issue: What’s the point of splitting media mandates?

Recently the media mandate for Henkel India was split along the same lines as that of its majority stakeholder, Jyothy Laboratories (JLL). With the consolidation of the businesses, for all JLL brands now, Lintas Media Group (LMG) will handle the buying part of the business, while DDB Mudra Max Media will handle the media planning. It is an interesting move, though perhaps not very new, considering that last year Aircel in a slightly different way of dividing the bounty, decided to assign TV and digital to Starcom, and press and radio to DDB Mudra Max, and some other brands have adopted a similar path in the past. 

When asked how clients benefit by splitting media mandates on the same brand, K Raghavendra, general manager, marketing services, Jyothy Laboratories, explains, “We do get the benefit by splitting the mandate as ‘brand investment planning’ and ‘brand investment implementation’ mandates. Planning sets what has to come alive at the marketplace, buying makes the message come alive at the market place in the most cost efficient and effective way. Often planning gets muddled in the discussions on rates and efficiency.” He adds, “JLL intends to keep the effectiveness (planning) debate separate from the efficiency (rate) debate. This will be on till we arrive at an equilibrium of understanding the planning and buying efficiency.”

Clarifying the fact that JLL had always followed the split method, and hence going the same way for Henkel isn’t a recent phenomenon, Premjeet Sodhi, chief operating officer, LMG, says, “The overall communication business constitutes the creative, media planning, media buying, digital, out of home, PR, rural, events, etc. In most cases, these are anyway handled by different agencies. At times, even on the client side, each is handled by a separate department or person. The extent of aggregation depends on the volume of business, the spread of brands and the structure on the client side to manage the communication part of the business. Keeping planning and buying together allows for a seamless execution from end-to-end while separating them allows for a greater focus on evaluating the performance and the value-addition by each separately. JLL is at a critical stage of its growth and at this point they need a greater focus on processes and systems and need mechanisms in place that will ascertain cross-evaluation and efficiency at each stage. I presume that is why they are currently working with planning and buying separately.”

NP Sathyamurthy, president and head, DDB Mudra Max Media, states, “Such decisions are a reflection of the fair degree of satisfaction with respect for the on-going associations between the clients and their agencies. Clients do benefit to a certain degree by adopting this ‘division of labour’ approach.”

According to Meenakshi Menon (Madhvani), founder and chairperson, Spatial Access, clients do benefit by splitting mandates as per the specialist skills of the agencies, and this approach can even work with traditional media (for many years Bajaj Auto used to have two agencies, where Mindshare handled TV and Initiative handled press). “The biggest advantage with this approach is that a client is distributing his eggs across baskets. It helps to have more than one media agency particularly when the business is considerable,” she says. Asked whether this is a trend we will continue to see more of in India, she reflects, “I would think so. We must understand that this trend in many ways reflects the way the agency business has grown and evolved. Offering so called ‘specialist’ units is one way that agencies attempt to protect their bottom lines under the mistaken belief that the ‘specialist’ is always paid more than the ‘generalist’. Unfortunately, the client sees through this smokescreen rather quickly. They sign on the ‘specialist’ for the so called depth of knowledge that they claim to bring to the table and then get into fee discussion using the traditional services as the benchmark to base remuneration. Ultimately it ends up being a disjointed response to market pressures, driven more by the strength of the partner relationship than what the brand actually needs.”

Alok Bharadwaj, senior vice president, Canon India, adds, “In India, I do see a split between creative and media agencies but not split of media agencies across the same brand. For those brands whose spends are not high, the same agencies are being used, but wherever spends are high, media agencies are different and are able to offer tangible and measurable value adds.”

LMG’s Sodhi offers another interesting take on the future, “Communication planning which traditionally was the domain of account planners, will see various models of operation emerging in the future. The domain shall be split between creative agencies, communication planning specialists, media agencies, consultancies, etc. Media agencies are evolving very fast in this area. It is then quite possible that communication planning may be handled by an agency different from the one that is handling the investment planning and buying.”

 

Client

 

K Raghavendra, general manager, marketing services, Jyothy Laboratories

 

“Consolidation is the name of the game; what we are debating is consolidation by function for better efficiency. Once the debate will move beyond rates, then a meaningful planning-buying consolidation is possible.”

 

Media Agency

 

Premjeet Sodhi, chief operating officer, Lintas Media Group

 

“Since the past decade, the focus in the media market has been of ‘consolidation’ for the benefits that it brings by leveraging larger volumes of media inventory.  I do not see that trend changing in the near future, since those that have tried this have seen significant tangible gains.”

 

 

Media Agency

 

NP Sathyamurthy, president and head, DDB Mudra Max Media

“As a trend, we can’t generalise, I feel it is just the requirement of a select few clients.”

 

 

Media Audit Agency

 

Meenakshi Menon (Madhvani), founder and chairperson, Spatial Access

“Clients want consolidation because it is a nightmare dealing with five partners in the place of one. The calibre of people at the agency end is also steadily going down, thus pushing the onus on the client even more than before.”

 

Client

 

Alok Bharadwaj, senior vice president, Canon India

“Actually in India, media is highly fragmented. If media buying is also fragmented, it will mean no leveraging at all. Hence, it is always a better idea to look at consolidated media buying if spends become really large.”

Source:
Campaign India

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