Ads follow customers to malls, airports, bus shelters

Ads follow customers to malls, airports, bus shelters
Mumbai August 08, 2008, 4:49 IST

ADVERTISING Over half a dozen agencies vie for the Rs 1,450-crore out-of-home advertising market

Pradeep Guha recently quit as the CEO of Zee Telefilms to set up Street Culture, an out-of-home (OOH) advertising firm. Guha will compete with established players like Times OOH, Percept OOH, Future Media, Anil Ambani’s Big Street and Sam Balsara’s Platinum Outdoor for the Rs 1,450-crore market. Still, he is confident that Street Culture will break-even in around a year. Guha says: “OOH advertising is a cost-effective medium that brands will now look at leveraging.”

As consumers’ interface with brands grows beyond the four walls of their homes, OOH advertising promises to be the next big thing. Traditionally, outdoor advertising stood for just hoardings. Today, OOH, as the name suggests, is more than just billboards — it encompasses signages, street furniture (like bus shelters), displays and LCD screens in and around retail outlets and malls, transit media like airports, railway stations etc.

With retail outlets, bus shelters, airports and even railway stations getting a facelift, brand managers find these are good platforms to showcase their brands to customers. Sunder Hemrajani, managing director, Times OOH, said: “Infrastructure development is driving the out-of-home business in India. With the ambience getting better, brands want to be present in such places.”

Advertisers seem to love it. Rameet Arora, marketing head, Colors, a new Hindi general entertainment channel from the Network 18 group, said: “In a fragmented media environment, it is critical to be always present before the customer, OOH is a potent medium to remind, surprise and engage him.”

A Bharti Airtel marketing executive adds: “For a brand like Airtel with pan-India presence, we need to go local and regional. OOH is a medium that allows us to do just that.”

According to consultancy firm PricewaterhouseCoopers (PwC), the OOH industry grew 25 per cent from Rs 1,000 crore in 2006 to Rs 1,250 crore in 2007. By 2012, PwC expects the industry to be worth Rs 2,400 crore.

The advertising space at the Delhi airport is said to have been sold for around Rs 150 crore for three years to Times OOH. The company will invest around Rs 100 crore in constructing 1,400 bus shelters in Mumbai alone, apart from 300 in Bangalore and 200 in Hyderabad. Each shelter can fetch between Rs 20,000 and Rs 100,000, depending on its location.

Big Street has acquired the rights for displays at stations of the Delhi Metro. Apart from that, it owns properties across platforms such as mobile vans, kiosks, light-emitting diodes and bus shelters. It plans to invest Rs 200-500 crore in the business within two years.

Future Media has tied up with Bharat Petroleum to launch Future Fuel, a television network across 20 petrol pumps in Delhi, which provides an audio-visual outdoor platform to brands. It plans to spend Rs 150-200 crore in 18 months on acquiring new rights.

Partho Dasgupta, CEO, Future Media, said: “Brands want to be present wherever consumption happens and as an OOH company we need to be innovative.”

Most OOH advertising companies acquire rights to properties such as bus shelters, railways stations and highways through government tenders, while the in-store/mall deals are done directly. The rights given by the government are usually between 5 years and 15 years. However, in case of malls, the company has to go in for revenue sharing with mall owners which ranges between 20 per cent and 40 per cent.

According to Percept OOH President Pareek amajor challenge for the OOH industry is the lack of a measurement system. Harit Nagpal, chief marketing officer, Vodafone, adds : “The investment in this medium is based on gut and not on measured effectiveness and reach. If the ad spends’ contribution in OOH is to increase then a measurement system is essential.”

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Is concept of second agencies new to India?

Is concept of second agencies new to India?
16 Jul, 2008, 0453 hrs IST,

Second agencies
By no stretch of imagination is the concept of the ‘second agency’ new in India. Some like Contract Advertising and Interface have been around for a long, long time — so long, in fact, that people even tend to forget the two shops began life as ‘second agencies’ to what were then known as HTA and Ulka Advertising. Others like Leo Burnett India’s Orchard Advertising are more recent.

But there are many more instances of second agencies that blossomed, basked in the sunlight for a while and then quietly disappeared, than one can care to remember . For instance, how many people today remember Lintas India’s second agency, Karishma Advertising , from the early 90s? Or Gaia, the second agency started by Enterprise?

What about Artig Advertising , Ogilvy & Mather’s second agency, or Speer Advertising — founded by Sajid Peerbhoy in the 80s, which O&M subsequently acquired as its second agency? And even if one were to discount those that folded up, there are quite a few second agencies around today that have been at the extreme periphery of the business for quite some time — Mudra’s Interact Vision and Lintas’ SSC&B , for example. And the memory of Ogilvy’s rmg david — which, after a brief efflorescence, was merged with Bates and Enterprise — is still very fresh. Netnet , the notion of second agencies in India is associated more with failures than successes.

Yet, second agencies just keep sprouting — the latest in the line is Pickle from the Lowe group. By no means is Pickle an anomaly. Following the merger of rmg david into Bates and Enterprise, Ogilvy promptly launched Meridian Communications. Mudra Group already has another second agency brand under its belt — DDB Mudra. Add to this Altitude, the new Indian entity established by Interpublic Group to handle the Jet Airways and JetLite business in India (Altitude will operate as a specialist function within McCann).

And lest we forget, BBDO India is BBDO Worldwide’s second agency brand in the country after RK Swamy/BBDO — although in this case, the script and its motivations run a bit differently. All of this point to one simple fact: second agencies are back in business.

It’s no secret that agencies start second agencies with one primary purpose in mind: handling conflicting business. Yet, more often than not, second agencies don’t manage building a distinct brand personality and philosophy of their own. Many second agencies fail to escape the shadow — physical as well as metaphorical — of the larger ‘mother agency’ , and as a consequence, invariably get subsumed by the mother agency. So the question is, how does the fresh crop of second agencies plan to beat the system? Prasoon Joshi, executive chairman of McCann India , takes pains to explain that Altitude is not Mc-Cann’s second agency in India — that it’s just an arm created to service the Jet account.

Yet, he says it is important to define “what the second agency stands for. Nobody starts a business with the intention of not making it work, and whoever took the second agency seriously, made it work.” Pickle, which was launched a couple of months back, has its own board of directors and management team, and runs independently from Lowe. In fact, Pickle has taken up from where SSC&B left off, and its clientele includes Royal Challenge, Ruchi Soya, Canara Bank and Union Bank of India. According to Madhukar Kamath, MD & CEO, Mudra Group, DDB Mudra was incubated in Mumbai for a year before being formally launched.

“The idea was to slowly build a strong second agency brand, for which we have been assembling people over the last one year; it is now ready to take flight,” he says. Apart from handling conflicting businesses , DDB Mudra will mainly handle global DDB accounts coming into the country. In Delhi, the agency handles two of DDB’s global clients — Wrigley and Philips.

Purely for the record, Interact Vision and Canvas are the other ‘second agencies’ in Mudra Group. For his part, Rensil D’Silva , executive CD, Meridian, insists that the agency was started as “a second full-service agency of O&M , with a proper team to head the creative and strategy arms of the business. It was not started to handle businesses that O&M could not handle.” The agency’s clients include ITC and Himalaya, and is present across Mumbai, Delhi and Bangalore.

Contract is one of the best examples of a thriving second agency: veterans in the business vouch that its success came from the fact that it was conceived to embody everything that HTA wasn’t at that point in time — small, nimble and creative-driven . Rahul Jauhari, national creative head, Pickle, has a similar vision for his agency: “If you want to introduce a special philosophy or a different ideology in an old agency, it’s an impossible task. But with a new agency it’s much simpler ,” he says.

Sumeet Chatterjee, MD, Pickle, agrees, adding, “To move beyond the shadow… the mother agency has to support and create policies that may not be prevalent in the larger agency, offer complete operational independence, and not expect the affiliate agency to be a smaller me-too .” Pickle’s point of differentiation , they say, will be looking at acquiring marketers who have not looked at advertising seriously.

“There are many brands which have never advertised, they are not market leaders, but definitely have advertising needs. We want to tap them,” says Jauhari. The ambition to grow into something larger is apparent , but the challenges are daunting. Attracting talent is one very important stumbling block, especially when the agency’s credentials are yet to be proven.

Meridian has a 40-member team in Mumbai , and D’Silva says the agency has not had any problem getting the right people. For Mudra, getting the right people for DDB Mudra — which presently employs 60 people in Mumbai — is very important. “To achieve our goal and to grow the business it is important to have the right kind of people. We lay a lot of emphasis on talent and have a LLC (Learning, Leadership, Change) policy which we have heavily invested in,” explains Kamath.

Second agencies also need time to establish themselves and succeed. Yet, often they are expected to deliver stellar results in a short timeframe. “The mother agency has to be patient, must continue to invest and have faith. The ‘second’ agency should not become second priority,” says Chatterjee.

That said, McCann’s Joshi puts a spin on everything when he argues that the most successful startups in India are, in fact, the second agencies, “Look at Contract, Orchard and Everest, these are second agencies of big agencies, and today are the only ones still around. I cannot think of an independent startup that has been as successful as any of them.”

Still, it would do well to remember that these three are the exceptions that make the rule that second agencies in India haven’t worked remarkably well. The new lot, though, have the opportunity of proving history wrong.