Now, agency commissions under the scanner
The heat of the slowdown on the advertising agencies has not subsided in the New Year. Where on the one hand, there are clients that have completely stopped advertising for now, on the other hand, there are those who have begun giving the feelers that contract renewal wouldn’t continue to be as automatic as it has been in recent times.
The New Year continues with its share of old worries. The economic slowdown has impacted just about anything that it has touched – some look at it as correction and opportunity, while some have felt the pinch and made no pretence in hiding it. Now, many advertising agencies are dreading the contract renewal time. Whether it is December or March, depending on various companies, clients have expressed to a few agencies their desires to renegotiate on agency commissions given the backdrop of the troubled financial times.
While media agencies don’t seem to feel any pressure from clients yet, many senior officials from various creative agencies have been caught in conversations with clients on commission. The tough times for some have begun already. However, for now, neither the clients nor the agencies are comfortable discussing anything on the commission subject. Most of the agencies and clients that exchange4media spoke to have stated that so far the panic button has not been hit. At the same time, they are quick to add that they are prepared for the first half of 2009, which most agency officials believe to be tougher than anything seen recently.
Commissions cannot crash further, but work has slowed
Agencies are not remotely pleased with even the thought of agency commission coming under the scanner. R Balki, Chairman and NCD, Lowe Lintas India, stated, “If any agency agreed to work on commission rates that are any lower than what they are today, it only implies that the agency does not respect its own brains, and this applies to the clients as well.”
The fact that many clients have put their campaigns on hold is common knowledge. Arvind Sharma, Chairman, Leo Burnett India, drew attention to this part of the clientele, and its impact on an agency. He said, “There is a set of clients who have stopped advertising completely for now. These include anything related to stocks, airlines, real estate, private equity funded projects and ventures. In that case, there are no discussions any ways.”
Contract Advertising’s CEO Umesh Shrikhande, too, pointed out that wherever clients had cut down on their activities, there was an automatic impact on the overall remuneration. He said, “In cases where a particular industry or company is affected, clients will inevitably reduce their marketing scope, scale and effort. And only in such cases the agency remuneration is likely to get rationalised.” However, Shrikhande voices the Balki school of thought that “sound, mature client partners would not expect the agency to do the same for less”.
One point that Sharma raises is that for every client that has stopped a campaign, there are those who are keen to increase their share of voice. He said, “The environment has made everyone cautious. There are two key aspects to consider here. But then, there are those categories also where clients need to communicate more to increase their sales. These clients are looking for stronger marketing campaigns today, and that is drawing a balance. At least in the case of our agency, we have a larger share of the latter.”
Is the fee structure a better bet?
HDFC Standard Life is working on a fee-based structure. When asked on whether they were looking at revisiting their remuneration structure, Sanjay Tripathy, the Marketing Head and Vice President of the company, replied, “Not exactly. We are working on a fixed fee structure that is in any case dependant on aspects like the resources of the agency, the time spent on a project, and the kind of work that we need from the agency. We look at those factors and then finalise the fee. There are no changes made in the course of the year. At the end of the year, the discussion comes to the table, and it is linked on how well the agency has performed and the kind cost structure that they are working in.”
There are many agencies that have a good number of their clients working on the fee-based structure. While there are agency heads who have said that the structure has its own benefits, there are others who still think that the commission structure works better. Arvind Sharma elaborated on the latter and said, “In a country like India, for every one year of recession, there are 10 years of growth. So, for every bad year on the commission structure, there are 10 very good years. I am a great supporter of commission.”
Commission or fee, the reputed clients have made no qualms in stating that they would keep their end of the deal this year. Reliance Communications’ Brand Head, Sanjay Behl, said, “We are very busy with many activities given our DTH and GSM launch, and we would definitely honour every single commitment made.” The worry really is for the months ahead.
Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)
For more updates, be socially connected with us onInstagram, LinkedIn, Twitter, Facebook Youtube & Whatsapp
TOP STORIES
E4M Our strategy is to target younger audiences through Sports: Rajiv Dubey, Dabur
The Head of Media at Dabur India spoke exclusively to exchange4media on the World Cup, associating with Indian Idol, the company’s digital spending and much more
With quirky campaigns, memes and moment marketing, timed with the ongoing World Cup and particularly the India-Pakistan matches, Dabur India has got considerable consumer attention for its popular brands – Red Paste, Cool King Hair Oil, Chyawanprash, Dabur Vita and the recently launched Bae Fresh Gel toothpaste.
The 140-year-old company is going big on key sporting events, World Television Premiere (WTP) movies and reality shows. It is now gearing up to become the title sponsor of popular talent show ‘Indian Idol’ on Sony TV for the first time, shared Rajiv Dubey, who leads the media strategy at Dabur.
Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)
For more updates, be socially connected with us onInstagram, LinkedIn, Twitter, Facebook Youtube & Whatsapp
ShareSwapan Seth's new book 'COOL' is out
The book is a reflection of the author's 'eclectic taste across categories'
Advertising professional and art collector Swapan Seth has announced the launch of his new book COOL. The book is described as "a ready reckoner to the hip and the happening, of the known and the very unknown."
The book is a reflection of the author's "eclectic taste across categories: from boltholes to exotic hideaways."
COOL has been published by Simon & Schuster India and is available on Amazon.
Seth is an ad veteran with a long and illustrious career in the industry. He became the youngest-ever Creative Director at Clarion at age 24. He was VP at 26 at Trikaya Grey. Two years later, he started his agency Equus.
He writes for publications such as The Economic Times, Hindustan Times and India Today. This is his second book and he has previously published THIS IS ALL I HAVE TO SAY.
Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)
For more updates, be socially connected with us onInstagram, LinkedIn, Twitter, Facebook Youtube & Whatsapp
Disney Star signs 9 sponsors for Asia Cup PAK
Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up come on board
e4m Staff Disney Star has signed nine broadcast and digital streaming sponsors for the upcoming Asia Cup.
Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up have come on board for the upcoming tournament.
As reported earlier by exchange4media, Disney Star has sought Rs 26 crore for the co-presenting sponsorship on TV and Rs 30 crore for Disney+ Hotstar.
According to industry sources, the associate sponsorship on Star Sports has been priced at Rs 19.66 crore, whereas for the ‘powered by’ sponsorship on Disney+ Hotstar, the broadcaster is seeking Rs 18 crore.
As per the information available with exchange4media, Disney+ Hotstar has three sponsorship tiers-- co-presenting (Rs 30 crore), powered by (Rs 18 crore) and associate sponsorship (Rs 12 crore). The broadcaster is offering an estimated reach of 120-140 million for co-presenting sponsors, 90-100 million for powered by and 60-70 million for associate sponsorship.
A spot buy for 10 seconds has been priced at Rs 25 lakh for the India vs Pakistan matches, while for the non-India matches, the ad rate for 10 second is Rs 2.3 lakh. The India matches plus the final for ODIs has been priced at Rs 17 lakh per 10 seconds.
Asia Cup is scheduled to be held from 30 August, 2023, to September 17, 2023.
Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)
For more updates, be socially connected with us onInstagram, LinkedIn, Twitter, Facebook Youtube & Whatsapp
Sorted 360 wins creative & social media mandate of Reliance Mall
The agency will manage offline and online campaigns for Reliance Mall
Sorted 360, an integrated creative and social media agency, has won the mandate to providing brand solutions for Reliance Malls across India.
“Sorted 360 is set to enhance Reliance Malls' market presence with their unparalleled creative prowess and strategic thinking,” read a press release.
“Sorted 360's commitment to pushing the boundaries of creative communication aligns perfectly with Reliance Malls' ethos. With a pan-India presence spanning across 19 cities and growing, Reliance Malls has consistently captivated customers by offering an array of Reliance brands and third-party fashion & lifestyle brands. The mall has established an unparalleled connection with its patrons through superior quality, a remarkable value proposition, and an unmatched shopping experience,” it read further.
"We are thrilled to welcome Sorted 360 as our trusted partner in advancing our brand presence across the nation," said the Head of Marketing at Relaice Malls. "Their proven expertise in retail, shopping center management, and innovative creative strategies make them the perfect fit for our vision."
"Partnering with Reliance Malls is a testament to our commitment to shaping extraordinary brand experiences," remarked Prerana Anatharam, Co-founder of Sorted 360. "We are excited to leverage our strategic and creative acumen to further elevate Reliance Malls as the epitome of convenience, choice, and excellence."
Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)
For more updates, be socially connected with us onInstagram, LinkedIn, Twitter, Facebook Youtube & Whatsapp
test
test
test
Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)
For more updates, be socially connected with us onInstagram, LinkedIn, Twitter, Facebook Youtube & Whatsapp
test
test
test
Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)
For more updates, be socially connected with us onInstagram, LinkedIn, Twitter, Facebook Youtube & Whatsapp
KlugKlug onboards Hemang Mehta as Country Manager for Indias
Mehta was most recently Head of Agency Relationships at Network 18 Media & Investments
KlugKlug has appointed Hemang Mehta as its Country Manager for India.
Mehta will play a pivotal role in driving KlugKlug's growth and expansion within the Indian market and be responsible for Sales & GTM Strategy
Prior to that, he has also represented organisations like Exponential (now VDX.tv), India Today Digital and Rediff.com. His expertise spans various domains including digital media sales, mobile marketing, media planning, and buying, social media marketing, and more.
Hemang Mehta expressed his enthusiasm about joining KlugKlug, saying, "I am thrilled to be a part of KlugKlug, a forward-thinking platform that is reshaping the influencer marketing landscape. As much as I look forward to collaborating with the exuberant team at KlugKlug, I am super excited to interact with the brands to deliver powerful data-backed Influencer solutions that will guarantee business outcomes."
Commenting on the appointment, Kalyan Kumar, Co-Founder and CEO of KlugKlug, stated, "We are excited to welcome Hemang Mehta to our team as the Country Manager for India. His extensive experience in digital media sales and marketing will be instrumental in driving our efforts to provide influencer marketing solutions to our clients. We believe Hemang's leadership will be key in scaling our operations and expanding our reach within the Indian market."
Read more news about (internet advertising India, internet advertising, advertising India, digital advertising India, media advertising India)
For more updates, be socially connected with us onInstagram, LinkedIn, Twitter, Facebook Youtube & Whatsapp