Strategic Marketing

       In the days gone by, the client was always king (still is, because it is his money!), usually with strong preferences and views, and the role of the advertising agency was to feed his ego, agree with his views, have long lunches with him and introduce him to the ‘happening’ models of the day. The media owner was either a supplier or a monopolist, with little or no role to play in actual business. Life was cruising along smoothly for a long time and there was enough scope to continue to mount fat as the economy was in the grip of the protectionist license raj. This arrangement suited everyone and therefore continued for decades, perhaps until the early eighties.
And then two changes took place that turbo-charged this Darwinian process and rapidly changed the face of the advertising industry.
       Firstly, some agencies — and I think Lintas was the initiator and leader of this process in India — actually started hiring professional managers, particularly MBAs from premier business schools. This single step completely transformed the entire industry as the client and the agency personnel were from the same institutes, and any one of them could have been on either side of the table. This brought with it professional management, did away with a lot of fat in the system and made the client-agency relationship that of a business and its consultant. No longer was the agency’s performance judged by its fancy lunches or its power to generate Filmfare award nite passes. Professional relationships, based on mutual respect, started forming and the agencies truly moved towards being equal partners. At least some of the leading professional ones did, and the others aspired to do so. Suddenly the focus started shifting from whether the client liked the agency’s face or not to whether what the agency recommended was in the best interest of the brand or not. Rightly, this was an era where the brand started to come into focus. The agency was expected to understand more than just the communication. It had to become the consumer’s voice in the brand management team.
       Secondly, Rajiv Gandhi came to power and initiated the liberalisation of the economy and hence the advent of the competition. With the first wave of competition, the industry (read client) quickly realised that there would no longer be scope for the fat and hence started becoming more and more demanding of the agencies. This in itself forced the advertising industry to professionalise itself, and influenced relationships. Meanwhile, most media owners continued to fit into either the supplier or the monopolist mode. However, once you initiate change, it is like fission. It goes out of control after critical mass is achieved. This stage was reached in the mid-nineties.
       The client started questioning his consultant, the agency. The unquestioned trust evaporated quickly, and agency-shopping became the norm. The competitive pressures forced the client to look for every extra rupee saving. And why not? The environment got even murkier as some unprofessional agencies refused to move towards transparency in relationship. The client always had the nagging feeling that his consultant, the agency, could be coloured by the ulterior motive of maximising its 15 per cent commission and might be making the client spend money indiscreetly. There was enough happening in the industry by some unscrupulous players to even justify this feeling. Clients were literally driven to bankruptcy by ill-advised advertising spending. The famous fire extinguisher client spent crores on launching some air-tight containers, but was unable to contain his financial losses. The agency laughed all the way to the bank, the client went broke! A leading agency made a small South-based airline spend more money on advertising than on its airplanes. Naturally incidents like these eroded client confidence and a few black sheep put pressure on the entire client-agency relationship. Once again the advertising industry, in a different manner, became less professional. And this time there was no wave of MBAs to save it, as by this time the quality of talent in advertising started deteriorating. The fancy MBAs joined finance companies, consultancies, technology companies... everywhere but advertising.
The dawn of the millennium has ushered in yet another era. Yet another set of changes. And, I think, the healthiest phase thus far.
       Like in all industries, advertising was forced to cut flab. Right sizing happened and clients started realising the differences between the real players and the me-toos. Globalisation brought in an era of mergers and acquisitions. This brought with it the respect the agency deserved and once again put the onus of delivery on the agency. The agencies have started to once again realize that it is not the client who pays the bill but the brand. There would be no client without the brand. And once more the focus has shifted to building brands, which some agencies like Lintas had continued mastering over the years. The relationship between the client and the agency has once again become much healthier and more equal because both are now working towards a common goal — the brand. I must qualify that this is the status with only some professional clients and a few professional agencies as yet. There still are agencies that operate in the gray areas, and some who drove clients bankrupt are still in business. But the scenario is changing. By and large there is much more honesty, trust and accountability between the client and the agency today than there ever was.
       Meanwhile, some of the media owners have also changed. The days of doling out ad space are over in the electronic media, and only a few vestiges are left in the print media. Some of the largest publications have become so much more accountable and responsive. The advent of media specialists has aided this process, though here again there are some ‘independents’ still around, unattached to any advertising agency, those who don’t understand advertising but treat media as a commodity. And surprisingly they were initially able to get some clients to use their ‘services’ though now wiser counsel seems to have prevailed and their days seem numbered. This breed also includes some creative agencies that have virtually lost all their creative business and are hence functioning a bit like ‘independents’, though not out of choice.
       Against the backdrop of all these developments, media owners are also realising that there is a need for accountability. As they professionalise themselves and become more responsive, the agency-media owner relationship will also shift focus to adding value to the brand rather than squeezing out one rupee more on the rate.
       If I were to summarize all that I have said, I would liken the client-agency-media owner relationship today to Yashwant Sinha’s budget. The direction is clear. There is greater need for mutual respect, transparency and trust. But not everything can happen in one year. However the future looks bright, less flabby and more professional, in a relative sense. The fact is that this is a completely symbiotic equation, and none can prosper without the other. Better sense has to prevail!.