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Accounts start hopping, as ad industry heats up

Source : BUSINESS_STANDARD
Last Updated: Fri, Dec 03, 2010 19:21 hrs

In a year that saw the Rs 20,000-crore advertising industry rebound after being in the dumps last year, account hopping has also increased like never before.

Data furnished by industry audit firm Spatial Access shows that advertising business of over Rs 2,000 crore ?????? or 10 per cent of the industry as a whole ?????? changed hands in the last six months. Last year??????s churn in accounts was much lower, at around Rs 800 crore.

What??????s more, the second half of 2010 also witnessed more high-profile account movements compared to a year ago, when the only real big movement was Vodafone??????s media account shifting to OMD from WPP agency Maxus in September.

This year, personal care major Loréal, moved its Rs 150-crore media duties to Maxus from Lodestar Universal in July, while Bharti??????s Rs 400-crore Airtel mobile services creative account moved from long-time partner Rediffusion to JWT in August.

The month also saw two other high-profile movements: Coca-Cola from Madison to Lodestar, and Reliance Communications shifting its creative from Cartwheel to Grey, and its media from Mudra Max to OMD and MEC.

A lull in September was followed by a burst of activity. October saw Kolkata-based ITC move its media business from Lintas Media to Madison, while November saw the creative mandate of MTS from Sistema Shyam go from Saatchi & Saatchi to Rediffusion.

"There are a number of reasons why an account moves from one agency to another," said advertising industry veteran Munawar Syed, who co-founded ad agency Triton.

"You could either want a fresh perspective or there could be a servicing or media issue. But, yes, I do find that long-term relationships are under strain these days. At least some of the movements in the last few months seem to suggest that."

This point is endorsed by Nandini Dias, chief operating officer at Lodestar Universal. "The slowdown last year was the starting point. Advertisers began questioning the efficacy of an agency, how effective cost structures were. That led to the slew of movements that you see now," she said.

As a trend, she points out, it is not uncommon for advertisers to review or re-examine their agencies from time to time. "But this year, there were a few surprises. This only highlights how fragile an advertiser-agency relationship can be," she added.

Companies had different reasons to shift, including getting more bang for the buck as well as new thinking on a brand. Coke executives say that they shifted to Lodestar because the agency offered a more cost effective way of buying media. "It offered us value for money when buying media. That is why we shifted," said a senior company executive.

Says a top executive with a telecom company: "We were looking for a fresh look at our brand and wanted a new agency to handle it, rather than the one we have worked with for years."

Leonid Musatov, chief marketing officer, Sistema Shyam Teleservices, said: "MTS is among the top 100 most valuable brands in the world. In India, over the last one year, MTS has established itself as a leading telecom brand in the country. To take the brand forward, our plan involves integrating attributes like innovation and technology with creativity. We felt that the team at Rediffusion has demonstrated these capabilities rather well. This prompted us to partner with them."



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