NAVIN SHAH
Much has been written about India’s early exit from the ICC World Cup 2007 and the disappointments faced by advertisers like Pepsi and LG Electronics that splurged Rs 75 crore and Rs 50 crore respectively in the showcase event along with other brands and advertisers, who had collectively invested more than Rs 500 crore in it.
No surprises that the advertising fraternity has started questioning the efficacy of cricket as a marketing medium. In fact, there are reports every day as to how the current Indo-Bangla series has been hit by the lack of viewer, advertiser and, therefore, broadcaster interest.
Recent trends show that brand managers and media buyers have realised hitching their marketing wagon on cricket is full of unglorious uncertainties, an expensive investment to stand out in the mad rush of brands.
Given that there is a growing number of brands that have started looking beyond cricket as a marketing and communication medium and are using films as a strong platform for reaching out their target audience.
Here are some interesting facts on how films score over cricket.
• Advertising and branding in films is more effective because of the repeat value and various mediums of re-runs compared with cricket which has a limited shelf life.
• Cricket hampers a brand’s visibility because of a high level of clutter. In other words, little registration and therefore diluted brand recall among the viewers. On the other hand, films offer brands a subtle, seamless and top of the mind communication option by enhancing the brand saliency.
• Brands face a high level of uncertainty when associating with cricket. Television rating points generated by cricket depends on individual scores and performances (as seen in this year’s World Cup tournament), whereas films have a captive, recurring and a growing audience base at all times.
• As we see it, cricket is a high risk, low return mode of marketing. There is a high level of interruption because of the large number of commercial breaks, whereas films allow brands to market themselves to its audience with minimum interruption—in other words, in an environment of high viewer attention.
On the other hand, here are some recent examples of how brands have successfully associated with movies.
• Krrish and Rangeela Acron: The idea was to establish Rangeela as a household name by using entertainment as a medium. Krrish was aptly selected as it was the most awaited movie of the year. The target audience comprised children and their mothers. Special Krrish-Rangeela packs were created; the added attraction for the kids was Hrithik ‘s autograph that was incorporated in every pack of Rangeela. The Krrish-Rangeela packs became an instant hit with kids. The unit sales of the product across markets increased tremendously. The production inventory of six months was exhausted in a month
• Baskin Robbins and Spider-Man 3: Spider-Man has a huge franchise—be it through movies, comics, merchandise or TV shows. Baskin Robbins has integrated the feel and look of Spider-Man 3 by adapting flavors that represent various characters from the movie including the eccentric villains. Its Super-Hero Flavours (Web Slinger, Sand Storm and Green Gobbler) are loosely based on the most recognised characters from the movie. The packaging and presentation of the ice creams are done so that they look like being part of the movie.
The company is giving away Marvel’s Super-Hero comics with every purchase of Super-Hero Flavours. A co-branded TVC is also part of the package. Since a large number of Baskin Robbins outlets are located in multiplexes, the promotion is held in theatres only through on-screen activation.
There are numerous other examples. But then we will run out of space.
(The author is CEO P9 Integrated, a film-marketing company from the Percept Holdings Group)
Thursday, May 24, 2007
In Brand Advertising which should be emphasized - Reach or Frequency?
Many will say that it is more efficient to focus on reach (versus frequency) because there are diminishing returns with each new ad exposure. That is, the advertising response curve is usually concave. This is particularly true if your goal is to create an immediate sale of a ubiquitously purchased consumer product. In that situation, reach almost always delivers "more bang for your buck." However, if your funds are limited and your audience is highly targeted, you would do better to focus on a reach schedule of 3+, seeking out media with significant audience overlap.
For brand building purposes, I usually focus on advertising frequency targeted at those that are most likely to influence the remainder of the market: primary target opinion leaders and "hard core" users.
(Source : Brand Strategy Insider)
For brand building purposes, I usually focus on advertising frequency targeted at those that are most likely to influence the remainder of the market: primary target opinion leaders and "hard core" users.
(Source : Brand Strategy Insider)
Friday, May 18, 2007
Admen debate next target of global conglomerates
THE ECONOMIC TIMES
Irshad Daftari
MUMBAI
The US-based
Advertisement
global ad agency conglomerate, the $6.2-billion Inter Public Group's (IPG) recent buy of Lintas' majority stake to gain full control of Lowe India, one of the country's biggest agencies, has reopened the independent-versus-conglomerate debate in the Rs 16,300-crore Indian ad industry. The question uppermost on everyone's mind, post this IPG buy, is who's next?
For the few remaining majority Indian-owned or with (still) substantial Indian equity advertising agencies - such as Mudra Communications, Redifussion DY&R, FCB-Ulka and Madison - the lure to sell out to one of the big four ad holding companies - UK-based WPP, Paris-based Publicis, and the two American groups, IPG and the world's biggest Omnicom - perhaps has never been greater.
The ad market is at its best in the past decade or so, clocking 24 % growth in 2006 on top of a healthy over 15 % in 2005. With this year also promising to deliver over 12-15% growth in revenues, little wonder valuations are getting steeper, and attractive for sellers.
IPG, which has made losses for three straight years, has finally come to life in India after it seemed for a while that Omnicom could have bought out the majority stake in Lowe India. It now completely owns two of India's best planner-led agencies, McCann Erickson and Lowe and has a majority stake in FCB Ulka.
But still, both IPG and Omnicom are leagues behind WPP in India. Sir Martin Sorrell's WPP, with global revenues of $10.9-billion, has the largest presence in India, owning five of the ten largest agencies (by people) in the country-Ogilvy & Mather, JWT, Rediffusion DY&R, Grey and Bates David Enterprise.
Group M, the consolidated media buying arm is, according to the industry, atleast twice the size of the nearest competitor, reckoned to be IPG's Initiative. WPP's The Kantar Group, which owns IMRB and Henley Centre, is well ahead of its peers in market research.
After the mop-up of Indian advertising by WPP, you can count the remaining independents on your fingertips. Mudra Communications, of which Omnicom-owned DDB has 10% stake (with a majority with Anil Ambani of ADAG), Rediffusion DY&R, in which the Indian owner-managers (Diwan Arun Nanda and Ajit Balakrishnan) own a majority share.
In FCB-Ulka, IPG's Foote, Cone & Belding control's 51 % with the rest 49 % with Redington, a Singapore-based supplier of computer peripherals. Madison Communications remains the only large integrated agency that still stands on its own.
There are smaller players, such as Triton Advertising, Network Advertising and Capital Advertising, all attractive targets for an international networks. Not everyone thinks that these independents can survive on their own for long. Says Arvind Sharma, chairman and CEO, Leo Burnett India, “Amongst the top 10 agencies in India, there isn't a single one without any multinational partner.”
So do Indian independents or near-independents have no choice but to be gobbled by the bigger, global agency, given the right price? Says Sam Balsara, CMD, Madison Communications, “My perspective doesn't change because of what's happening in the market.
We don't have any philosophical disagreement for taking over a global partner. It has to be in the interests of clients, employees, shareholders in that order.” Mr Balsara affirms that he has spoken to several leading global CEOs that have come and visited him, but he continues to operate on his own.
Madison has taken up negotiations with many global networks including the Publicis Groupe, but none of them have fructified. To be sure, it's just the right price that maybe holding back many a deal, and with IPG's Lintas' deal as a harbinger to global conglomerates' rising interest in India, don't be surprised if there is a run on the ad dealcounter soon.
The need, for these independents to bring in a strategic partner is matched equally with the need of big ad groups such as IPG and Omnicom to up their ante in a country which is dominated by WPP. Take the $11.4-billion Omnicom Group for instance.
Of Omnicom's creative agency brands, DDB (Mudra), TBWA and RK Swamy/BBDO, haven't been at the creative cutting edge as their international counterparts, and it has launched OMD, its media agency, only in February last. Says the head of a WPP-owned agency, “Omnicom never had options in India to begin with. That isn't going to change now.” He has a point here, but understanding it needs going back a decade or so.
WPP's global acquisition of JWT (1987), Ogilvy & Mather (1989), Young & Rubicam (2000) and Grey Global and Cordinant Communications in 2005, gave it an insurmountable lead in India. There is hardly any big agency, without any global agency alignment of some sort, to be picked up by competing networks such as IPG, Omnicom or Publicis.
Perhaps for this reason Japanese ad group, Dentsu, kicked off its India foray in 2005, in partnership with veteran ad man Sandeep Goyal, minus any acquisition, and choose a model to build its business ground-up in India by aligning the ad business of its core global clients, essentially Japanese companies with big presence in India, such as Honda and Toyota.
In India, mergers and acquisitions picked up in the early to mid-90s. Virtually every Indian agency was courted by an international agency or holding company. Once the buyout happened, the Indian name was dropped from the agency. So Chaitra became Publicis' Leo Burnett; Trikaya became Grey; Clarion became Bates, to name just a few. The entrepreneur eventually sold out to the international agency that it had tied up with.
“If an international holding company wants to buy out a local advertising firm it presents a great opportunity for local entrepreneurs to cash in on what they have built, provided the valuation is right,” says Madhukar Kamath, MD & CEO, Mudra Group.
Often, best practices are shared around the network, and if an Indian independent does get aligned to a global advertising agency they'll benefit from both the knowledge as well as the global clients that a network will bring.
But that's not as important a factor anymore today. Says Diwan Arun Nanda, CMD, Rediffusion DY&R, “Indian companies themselves are growing at a fast pace and newer sectors like insurance and retail are advertising more. Indian companies going abroad might also want to partner with Indian agencies.”
Perhaps of greater importance is that international holding companies have been focused more on marketing services globally, with more than 50% of their revenues coming in from mass media.
In India last year, the revenues from advertising stood at Rs 16,300-crore while the spends on everything that constitutes marketing services - direct marketing, PR, internet, events, promotions et al - was as much as Rs 13,000-crore according to an estimate by Ravi Kiran, CEO, Starcom, just a shade under the mass marketing spends.
Madison today has set up agencies catering to a variety of marketing services, including shopper marketing, retail design and rural marketing, which puts it in a position of strength when it wants to bargain. A senior executive from an IPG-owned agency says, “The independents can't continue to paint themselves in a corner. Tomorrow if Group M decides to flex its muscles, Madison might be forced to cut rates to retain its clients.”
Irshad Daftari
MUMBAI
The US-based
Advertisement
global ad agency conglomerate, the $6.2-billion Inter Public Group's (IPG) recent buy of Lintas' majority stake to gain full control of Lowe India, one of the country's biggest agencies, has reopened the independent-versus-conglomerate debate in the Rs 16,300-crore Indian ad industry. The question uppermost on everyone's mind, post this IPG buy, is who's next?
For the few remaining majority Indian-owned or with (still) substantial Indian equity advertising agencies - such as Mudra Communications, Redifussion DY&R, FCB-Ulka and Madison - the lure to sell out to one of the big four ad holding companies - UK-based WPP, Paris-based Publicis, and the two American groups, IPG and the world's biggest Omnicom - perhaps has never been greater.
The ad market is at its best in the past decade or so, clocking 24 % growth in 2006 on top of a healthy over 15 % in 2005. With this year also promising to deliver over 12-15% growth in revenues, little wonder valuations are getting steeper, and attractive for sellers.
IPG, which has made losses for three straight years, has finally come to life in India after it seemed for a while that Omnicom could have bought out the majority stake in Lowe India. It now completely owns two of India's best planner-led agencies, McCann Erickson and Lowe and has a majority stake in FCB Ulka.
But still, both IPG and Omnicom are leagues behind WPP in India. Sir Martin Sorrell's WPP, with global revenues of $10.9-billion, has the largest presence in India, owning five of the ten largest agencies (by people) in the country-Ogilvy & Mather, JWT, Rediffusion DY&R, Grey and Bates David Enterprise.
Group M, the consolidated media buying arm is, according to the industry, atleast twice the size of the nearest competitor, reckoned to be IPG's Initiative. WPP's The Kantar Group, which owns IMRB and Henley Centre, is well ahead of its peers in market research.
After the mop-up of Indian advertising by WPP, you can count the remaining independents on your fingertips. Mudra Communications, of which Omnicom-owned DDB has 10% stake (with a majority with Anil Ambani of ADAG), Rediffusion DY&R, in which the Indian owner-managers (Diwan Arun Nanda and Ajit Balakrishnan) own a majority share.
In FCB-Ulka, IPG's Foote, Cone & Belding control's 51 % with the rest 49 % with Redington, a Singapore-based supplier of computer peripherals. Madison Communications remains the only large integrated agency that still stands on its own.
There are smaller players, such as Triton Advertising, Network Advertising and Capital Advertising, all attractive targets for an international networks. Not everyone thinks that these independents can survive on their own for long. Says Arvind Sharma, chairman and CEO, Leo Burnett India, “Amongst the top 10 agencies in India, there isn't a single one without any multinational partner.”
So do Indian independents or near-independents have no choice but to be gobbled by the bigger, global agency, given the right price? Says Sam Balsara, CMD, Madison Communications, “My perspective doesn't change because of what's happening in the market.
We don't have any philosophical disagreement for taking over a global partner. It has to be in the interests of clients, employees, shareholders in that order.” Mr Balsara affirms that he has spoken to several leading global CEOs that have come and visited him, but he continues to operate on his own.
Madison has taken up negotiations with many global networks including the Publicis Groupe, but none of them have fructified. To be sure, it's just the right price that maybe holding back many a deal, and with IPG's Lintas' deal as a harbinger to global conglomerates' rising interest in India, don't be surprised if there is a run on the ad dealcounter soon.
The need, for these independents to bring in a strategic partner is matched equally with the need of big ad groups such as IPG and Omnicom to up their ante in a country which is dominated by WPP. Take the $11.4-billion Omnicom Group for instance.
Of Omnicom's creative agency brands, DDB (Mudra), TBWA and RK Swamy/BBDO, haven't been at the creative cutting edge as their international counterparts, and it has launched OMD, its media agency, only in February last. Says the head of a WPP-owned agency, “Omnicom never had options in India to begin with. That isn't going to change now.” He has a point here, but understanding it needs going back a decade or so.
WPP's global acquisition of JWT (1987), Ogilvy & Mather (1989), Young & Rubicam (2000) and Grey Global and Cordinant Communications in 2005, gave it an insurmountable lead in India. There is hardly any big agency, without any global agency alignment of some sort, to be picked up by competing networks such as IPG, Omnicom or Publicis.
Perhaps for this reason Japanese ad group, Dentsu, kicked off its India foray in 2005, in partnership with veteran ad man Sandeep Goyal, minus any acquisition, and choose a model to build its business ground-up in India by aligning the ad business of its core global clients, essentially Japanese companies with big presence in India, such as Honda and Toyota.
In India, mergers and acquisitions picked up in the early to mid-90s. Virtually every Indian agency was courted by an international agency or holding company. Once the buyout happened, the Indian name was dropped from the agency. So Chaitra became Publicis' Leo Burnett; Trikaya became Grey; Clarion became Bates, to name just a few. The entrepreneur eventually sold out to the international agency that it had tied up with.
“If an international holding company wants to buy out a local advertising firm it presents a great opportunity for local entrepreneurs to cash in on what they have built, provided the valuation is right,” says Madhukar Kamath, MD & CEO, Mudra Group.
Often, best practices are shared around the network, and if an Indian independent does get aligned to a global advertising agency they'll benefit from both the knowledge as well as the global clients that a network will bring.
But that's not as important a factor anymore today. Says Diwan Arun Nanda, CMD, Rediffusion DY&R, “Indian companies themselves are growing at a fast pace and newer sectors like insurance and retail are advertising more. Indian companies going abroad might also want to partner with Indian agencies.”
Perhaps of greater importance is that international holding companies have been focused more on marketing services globally, with more than 50% of their revenues coming in from mass media.
In India last year, the revenues from advertising stood at Rs 16,300-crore while the spends on everything that constitutes marketing services - direct marketing, PR, internet, events, promotions et al - was as much as Rs 13,000-crore according to an estimate by Ravi Kiran, CEO, Starcom, just a shade under the mass marketing spends.
Madison today has set up agencies catering to a variety of marketing services, including shopper marketing, retail design and rural marketing, which puts it in a position of strength when it wants to bargain. A senior executive from an IPG-owned agency says, “The independents can't continue to paint themselves in a corner. Tomorrow if Group M decides to flex its muscles, Madison might be forced to cut rates to retain its clients.”
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