GoaFest 2007: Industry leaders engage in heated debate, encourage creation of a forum

The final session of the Advertising Conclave took a close look on the growth potentialof the advertisng industry when it debated on ‘Can Indian advertising industry go from Rs 15k crore to Rs 50k crore?’ The session witnessed perhaps one of the most heated discussions during this year’s Conclave witnessed. The panelists included Shashi Sinha, CEO, Lodestar Media; Uday Shankar, CEO, STAR News; Raj Nayak, CEO, NDTV Media; Vikram Sakhuja, COO, GroupM-South Asia; and Vikas Gupta, CMO, Marketing & Sales, ABP. The moderator was well-known marketing consultant Harish Bijoor.

The session took off with the broadcaster and agency representatives seizing the opportunity to question industry practices that had created hindrances in the growth of Indian advertising and its various entities. The second half of the session saw the firming up of plans to launch an ‘Indian Advertising Forum’ (IAF). The project will be under the supervision of Leo Burnett Chairman Arvind Sharma.

Giving an idea of what to expect from this forum, Sharma said, “The industry bodies that are present today are needed and would continue to play their roles for the Indian advertising and media sector. However, in the Conclave, it was also felt that there is a need to create a forum that does not look at inter-unit competitions. IAF will promote competition but ensure that it is fair.”

Sharma informed that the charter of this forum would be to provide transparent and independent data. It would continually demonstrate value to advertisers and work toward the growth of GDP, as well as undertake various industry issues.

Sakhuja of GroupM kicked off the session on whether creative and media agencies are working towards the growth of the Indian advertising sector. He pointed out that while everyone at the Conclave was speaking about how agencies were asking for discounts and hence creating erosion in value for the sector, no one was talking about the fact that TV rates are going up too. He said, “Customised solutions are important and should be considered seriously. Advertising is not being viewed as an investment. Advertisers are not linking advertisments with sales and that is a problem.” He reiterated that the move is towards integrated solutions, largely because companies that have used such solutions have got more results than from conventional advertising.

Sakhuja also stressed on the need for research and analytics, and that the new measurement tool would be CPT (cost per thousand), and not CPRP (cost per rating points).

ABP’s Gupta pointed out that the discussion should have included advertisers, as the dream of a Rs 50k-crore advertising industry in the next three years is possible only when advertisers’’ needs are known and then satisfied accordingly. “We have so far only heard people who are pushing and peddling the products. The Conclave should not be called Advertising Conclave, but Brand Conclave.”

Sinha of Lodestar Media took the discussion forward saying that he had seen the industry grow from Rs 400 crore to Rs 15k crore, and doesn’t see the Rs 50k crore target as unachievable. “However, we must walk the talk and we have been doing so for quite long. Today, there is a natural evolution — discounting is prevalent and if someone suggests going back to commission, that is surely not gong to happen. My point is that we should not have a separate set of white papers and do something different in our offices.”

Shankar from STAR News spoke on the need to look at what the advertising industry could do for different segments to encourage new advertisers. “We must become the engine of economic growth. India is going though an economically purple patch and every Indian is dreaming. If we are willing to give wings to this dream, then we can achieve any target even beyond Rs 50k crore.”

He added, “A lot has happened on the size of the business and that is relevant, but the health aspect is important too. So the crucial question is: are we laying the right foundation? No industry has grown without the right forward planning. Are we creating the right ambassadors who will take the industry forward?”

NDTV Media’s Nayak was the final speaker on the panel and, in his inimitable style, he provoked a discussion on today’s practices between agencies and broadcasters, where there is no clarity on whether agencies are working for clients or for channels. He also spoke about the arm-twisting that takes place in the industry.

“We have a skewed business model and that is a reality we have to accept. It is a serious issue why we are not looking at a net rate card. There are people working on zero per cent commissions. So where are they making their money from?” Nayak wondered.

Lodestar’s Sinha responded saying that there are broadcasters who have a fixed rate card and that if an agency is on zero per cent commission, there is indeed someone supporting them and that “just shows the bad practices in the entire industry, and not just of one or two segments”. Nayak also said that there are cases today of channels creating creatives for the advertiser, while agencies too are present during such meetings. He said, “If channels are making creatives, what is the purpose of a creative agency?”

Bijoor enumerated the need to build a sustainable business model, converging competitive resources in areas like research, and the need for an independent body headed by a professional. He said that the industry has to be process-centric and there are other solutions like broadcaster unity. He finally said, “Think like a client and behave like a client. This was said decades ago but it holds true today as well.”

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