Ad agencies have to make clients rupee work harder

Written by Lalitha Srinivasan | Updated: Jun 27 2012, 08:20am hrs
Joseph George, chief executive officer of Lowe Lintas & Partners India, part of the Interpublic Group (a global provider of advertising and marketing services), is busy balancing the agencys organic growth plans with cost-cutting measures to sustain its momentum in the Indian ad industry. With its presence in nine cities, Lowe Lintas, which counts Hindustan Unilever, Britannia Industries, Coca-Cola India, Tata Tea, Johnson & Johnson and Maruti Suzuki among its clients, is now extending its operations by setting up two offices in northern India. The agency is also looking at strategic tie-ups and joint ventures in the digital space to extend its service offerings, Joseph told FEs Lalitha Srinivasan in an interview. Edited excerpts:

How significant is Lowe Lintas Indias role in Lowe Worldwide operations What are your organic growth plans this year

Its playing a very significant role, even more so today, when agency networks and holding companies globally are looking towards this part of the world for growth. Mumbai is one of the 12 lighthouses or knowledge hubs of Lowe Worldwide. As far as the new business is concerned, it is going to be tough to top our 2011 business performance wherein we had signed 100 new clients. Having said that, we havent got off to a bad start this year either. In 2012, Lowe Lintas has bagged around 50 new advertising accounts.

Besides new business, our newer offices in Kochi, Ahmedabad, Pune and Hyderabad are beginning to show promise. And if all goes well, we plan to open another two offices before the end of the year. We started two new marketing service divisions LinEngage (BTL and Projects) and LinConsultancies (strategic consultancy). LinProductions (film production) is doing well and it makes sense to seriously up our investments here.

What about recruitment plans Has the slowing economy impacted Indian advertising business

I would most certainly think so. The April-June quarter has quite clearly driven home the fact that the next two quarters are not going to be easy. A diverse client portfolio can protect an agency only that much and no further.

To tide over the economic slowdown, what cost-cutting measures Lowe Lintas is looking at Will there be any change in your investment plans

Like everyone else, we, too, are looking very closely at our costs. Personnel costs contribute significantly to the overall costs in the advertising business; and, so yes, we are certainly being very very cautious and selective in our hiring. We, however, havent turned the tap off on investments in technology and training.

With the economic downturn, Indian advertising agencies are devising fresh strategic plans to gain maximum value for their clients ad budgets. Have you developed any tools or processes to cut costs

Well, the most effective way an agency can offer value to clients during times like this is either to help make his advertising rupee work even harder or his advertising to be as effective, even faster i.e with lesser spends. Like I said earlier, the work has to be at the centre of everything getting new business, getting good talent, saving your client money and ensuring his investments on innovations pay off.

Are you looking at acquisitions as part of your inorganic growth strategy

Yes, we are. In fact, we are looking at a few strategic tie-ups and joint ventures. All of which, we hopefully will be in a position to announce very soon.

What are the major challenges that the Indian ad industry face today

Three major challenges that have plagued the industry for long continue to be relevant even today talent acquisition and retention; fairness of agency remuneration and the ethics surrounding the pitch process. The other two challenges are digital and the ability to forecast and plan.

Unlike a few years back when agencies could complain about clients paying only lip service, to wanting to engage with consumers on digital, the pressure is now right back on agencies to equip themselves technically and in mindset to lead and deliver in this area. Thankfully, this entire space is getting rapidly de-mystified at both ends, allowing more and more brands to spend money with a lot more conviction and confidence.

With the environment so unpredictable, the ability to forecast and plan is increasingly becoming a challenge. So, while annual plans have become a thing of the past, even half yearly and quarterly projections are getting tough.