Monday, January 5, 2009

Will 2009 be the year of the client?

The client needs the ad agency’s empathy. In turn, she also needs to give the agency due respect..

The ad agency must make a sincere effort to let the client understand all the responsibilities that customer delight implies.

Last week, as we were celebrating India’s phenomenal run chase of 387 at Chepauk, Chennai I had a surprise visitor. It was my nephew who teaches Finance at Columbia University in the US who just dropped in. “I suggest you close down yourblog for a few months,” he said, with a look of unrestrained glee. When I asked him why, he said, “You had predicted the decline and (cricketing) demise of Sehwag and I am happy to tell you that you have been proved completely wrong.” While it is gratifying to note that people actually read what one writes, I wonder if they need to remind people who stick their neck out of their forecasting faux pas! But some people never learn, for here in this column I am trying to predict what the New Year holds for marketing, advertising and the consumer who is really going to be the key as she has always been.Doom & gloom import department

The USA has exported several products, services and ideas to the rest of the world. This time around it has done one better as it has exported a dark and murky mood of gloom and doom, most certainly to India and the rest of the world if media reports are to be believed. India, too, has had its own share of problems to add to the sense of despair, what with the mind-boggling and despicable catastrophe that followed in Mumbai just a few weeks ago. As a consequence, even if India Inc is not as deeply mired in the confusion that has engulfed the financial and business world, it seems to be thinking, acting and behaving as though there is no tomorrow.

In my view, the mood is worse than the actual situation but I guess corporate India believes that it is better to be safe than sorry which is perfectly understandable given all that has just hit us. But in the same breath, there is no denying the fact that it has had an impact on consumer sentiment. The reality is that many of us have become poorer and our ability and our confidence to spend have been reduced if not completely eroded. There is a palpable erosion of confidence as some of us fear for our jobs as well.

Industries such as the automotive sector that grew exponentially on the basis of easy and poorly administered credit are now probably much harder hit than other sectors and I am sure that other industries such as real estate that expanded as though there was no tomorrow are now licking their wounds! A far cry from the days when they were licking their lips in anticipation of killings made on unsuspecting customers like you and me. The fluctuating stock market too has added to the morbidity of the situation and the anxiety of troubled and beleaguered investors.

The troubled agency

There is no denying the fact that the agency business has been booming over the last three years and for many of us the first six months of the current financial year too have been exceedingly good. And then we walked into a Brett Lee bouncer, without a helmet! To the slightly older lot reading this column it was like what happened to a bare-headed Nari Contractor who barely survived after being bounced by Charlie Griffith in the West Indies. I am quite sure the prognosis for advertising has to be better.

The other reality is that multinational business, which is no small proportion of our Indian advertising pie, could be guided by the poor sentiments globally. The head of the local operations of a multinational company spoke to me of the firm directive he had received from his boss in North America asking him to stop all advertising in India. His protests that India needed advertising to build the brand locally and was doing comparatively better fell on deaf ears. One does hope that this is just an isolated instance and not something that is going to become the order of the day. And yet in the same breath we must mention that large categories such as FMCG have to continue their advertising spends. People will hopefully brush their teeth, bathe and on occasion wash their hair, downturn notwithstanding.

While the financial markets have been the cause of a lot of the global turmoil, in India at least there is still an opportunity for advertising agencies in the form of public sector banks which are being frequently asked to reduce their lending rates and raise their deposit rates. Let’s not forget too that these banks are being politically induced to advertise these changes at frequent intervals in tune with the actual and frequent change in rates. Advertising agencies too would do well to remember that there is an election due next year and irrespective of the quality of candidates who would be fielded and irrespective of the creativity in the advertising that some of the political parties might approve, there is no denying the fact that crores of rupees will be spent on advertising. Something to look forward to even if the result at the end of the exercise may not be all that heartening!

Insurance as a category would continue to spend as the industry tries to persuade people who are worried and are probably likely to look more seriously at their own future and the future of their families in troubled times. Maybe we will see more campaigns like the ‘Life enhancement’ campaigns that ICICI came out with recently. The cement industry had a dream run over the last three years as prices kept going up without any real marketing efforts from the cement companies, though one tended to hear whispers of a cement cartel, not that it called for a great strategy. Many of the cement majors have significantly enhanced their capacities in recent times and have also been hit by the palpable slump that the real estate industry has been exposed to and the lethargy of the Government to get into infrastructure with the seriousness that the sector and the economy deserves. The cement industry will have to spend in 2009 as the attractive home loan rates of the public sector banks will make a difference to individual construction. At least that is the hope!The client’s world

The client is the most important constituent in this entire marketing communication equation. She is the source of all business, benefits, accolades, awards and, on occasion, heartburn. Yet, one wonders if we are more often than not paying lip service to the concept of being close to the customer and talk about aspects such as customer delight without really understanding the true responsibility of what that concept means for the service provider.

To me, this is the key strategy for the advertising agency in the New Year and the months that follow it. The client is the very reason for our being and the very centre of our business. And today the client is troubled, to put it mildly. She needs the agency’s empathy, not criticism. And there is another reality too. There was a time and an age when clients did not give the agency the respect or the ears that they deserved. But today the client is willing to listen as she needs all the advice she can get on what might work in these troubled times. Of course, the flip side to this is that the agency and its personnel must be in a position to provide value.

To do or not to do

Today the agency has to do a few things and do them quickly in 2009.
Be there for the client in every which way possible and that includes senior agency management.
Seriously look at cost control. That does not mean a reduced retainer fee as much as exploring the other costs of advertising, like film production.
We have experimental movies being produced by young, enterprising film producers which are pathbreaking. How come advertising does not believe in experiments?
The terms of engagement have been more or less predictable, boring even. Different times may need a more innovative way of charging for services. How ready is the agency for this?
Digital is in. But is the agency in on this or is it still talking about the revolutionary new medium?

It is time for the agency to take a few hard decisions. For a long time we have hemmed and hawed about the poor quality of people in our business and have lamented about how difficult it is to get talent and how easy it is for us to lose talent to other industries. Now is the time to clean up our act.

It is often said that tough times bring out the best in us and perhaps the advertising industry is at the crossroads again. But then it has survived several crises before and will meet this challenge too, as long as we can keep a cool head amidst all this turmoil around us.

Welcome to the party and have a wonderful year in 2009!

The writer is CEO of brand-comm and the author of One Land One Billion Minds.

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