Clients, agencies share a tough love, say Alok Bhardwaj, Anita Nayyar, Ashish Bhasin, Les Margulis, Shefali Chhachhi; Raj Nayak hopes for a solution

As expected, sparks flew when advertisers and media agencies came face to face on the platform offered by the exchange4media Conclave. With a topic like ‘Changing expectations of Clients & Media Agencies – of transparency & accountability’, nothing less was expected. The exchange4media Conclave, the annual flagship event of the exchange4media Group, is special this year as it marks the commencement of the Group’s 10th Anniversary celebrations. The theme for the Conclave this year is ‘Rebooting the Indian media and advertising industry’. The Delhi leg of the Conclave was held on June 9, 2010.

The session was chaired by Raj Nayak, CEO, Aidem, who spurred on the panellists to be as candid as possible. The client side was represented by Alok Bhardwaj, Vice President – Canon India; and Shefali Chhachhi, Marketing Director, Max Bupa India; while the media agencies side was represented by Anita Nayyar, CEO, Havas India; Ashish Bhasin, Chairman-India, CEO-South East Asia, Aegis Media; and Les Margulis, President, R K Swamy Media Group/Media Direction.

’India - then and now’

The session commenced with Les Margulis’ presentation on ‘India – then and now’, where he talked about how India had changed since his last visit, which was 15 years ago. He spoke at length about the changing face of India – be it in terms of the economy, society, lifestyle, media or retail. According to him, “Digitisation is driving the change here. Technology is changing the face of India – be it in the way entertainment is consumed or brands are marketed.”

He stressed on the need for integrating communication today, stating what was needed today was not media solutions but 360 degree communication solutions. “Media agencies will be the new custodians of brands and improve media ROI for clients,” he affirmed.

’Why do you call for a pitch review?’

Post Margulis’ presentation, Raj Nayak posed the question to panel, “Do you love your media agencies?”, to which all replied in the affirmative. Nayak then promptly asked, “When you love your agency, why do you call for a pitch review?”

To this Shefali Chhachhi replied, “There’s a lot of both love and hate. It is like tough love. The time has come when both clients and media agencies cannot take each other for granted and be accountable for what they do. There are times when the marketer would look to have a refreshed relationship and have a regular review of the work.”

Alok Bhardwaj, on the other hand, said, “Clients and agencies have to work in collaboration. Brands look for agencies that think alike or may be ahead of what they are thinking. Collaboration for a media agency is a must for the longevity of the company or any relationship.” On the reason for calling for a pitch review, he said, “Like any relationship, there are times when some misalignments happen. Understanding of the client’s business by the agency is a must. It is when an agency fails to understand the client’s business in depth that clients start looking for an agency that does.”

Giving her take, Anita Nayyar commented, “If clients scout for agencies it is more because the agency has stopped giving them ideas. They want a fresh perspective and hence, are essentially looking out for creative thoughts. There is a practice of clients calling for a pitch to have a new set of ideas and probably use it with its existing agency.”

Taking the discussion forward, Nayak asked, “Where’s the accountability? Who’s the brand custodian among the two – the agency or the client?” To this Bhardwaj replied, “Agency is accountable for the brand. As a media agency, I’m accountable to the client and as a creative agency I’m accountable for the message that’s going out in the market.”

Reflections on remuneration

Nayak then came to the contentious issue of pitch fees. He asked “Why doesn’t’ the advertising industry get together and ask for a pitch fee? After all it is like giving away an idea for free.”

To this Ashish Bhasin reacted, “At the end of the day, it is a business relationship. Nobody is in this game for charity it’s a competitive world. Every client deserves the agency he gets and vice versa. If a deal is not remunerative enough, agencies can stay away from it.”

Marguli referred to the Reckitt Benckiser pitch, where the client had put the ‘clause’ of agencies having to pay a ‘fee’ to take part in the pitch. Moreover, for the first one year, there would be zero commission for the agency handling the business as the client felt that working for Reckitt would bring advantages like significant volumes. (Incidentally, exchange4media had carried a detailed report on this on June 7, 2010). Incensed by such ‘clauses’, Marguli said that this was highly unfair and that he would prefer to boycott the products of such a company. He called for collective industry will to take such an affirmative step.

Giving the client’s point of view, Chhachhi noted, “The industry needs to be comfortable with the ethics of earning money.”

Nayyar candidly admitted, “We in the media agency side don’t have the spine to tell the client we are dropping his business because it is not financially viable. The moment I drop a client, there are ten others to step into my place.” Agreeing with Marguli, she said that the industry needed to come together and decide to charge a pitch fee.

Speaking from the audience, Sam Balsara, Chairman, Madison World, said. “In India, agency’s weakness is growth and growth at any cost. Nobody wants to miss out on the business in India. Everybody comes here to pitch, and if you want the best deal, you either compromise on quality or on price. It is often staring at you in the face, yet all agencies are spineless and gutless to say no.”

Talking about Madison, Balsara said, “Madison had started its business in 1994. As of 2010, we have only 35 clients, because we feel they are the ones with whom we can work in terms of financial suitability, culture, etc. We are very clear that for us clients are the single source of income.”

“The fault lies with the media agencies. Clients are not here to support the agencies, the agencies are responsible for their own business. No one can force you to take a business at a lower cost. Demand your price, if you don’t get it, walk away from it.” he stressed.

On that note, Nayak summed up the session, saying that the clients and media agencies did love each other, “but the question is how, and hopefully, there will be a solution when we meet next year at the exchange4media Conclave. I am keeping my fingers crossed!”.

The exchange4media Conclave 2010 is presented by Dainik Jagran. CNEB is the Associate Sponsor. The Mumbai leg of the Conclave will be held on June 11.

This year, readers can follow the latest developments and discussions regarding the Conclave on Twitter, the hashtag for which has been set as #e4mC2010. An exchange4media brand page has also been initiated on Facebook at
http://www.facebook.com/pages/exchange4media/117658164936658

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