Advertising agencies rework strategies, cut costs to woo budget-friendly clients

While RK Swamy BBDO is gearing up to manage its clients? limited ad budgets, Draftfcb Ulka is fine tuning its three-pronged recession strategy which includes, cautious real estate investments, meticulous finance management with focus on margins and cautious high-cost hires.

?In a slowing economy, advertising and media agencies are putting in place many cost-cutting measures for their clients as well as for their operations,? observed a Mumbai-based industry analyst. Clearly, it is now survival of the smartest in the Indian advertising industry.

On the agency?s recession strategy, Joseph George, CEO of Lowe Lintas & Partners, said ad agencies need to conceive persuasive ideas to impact both mind and market shares in competitive markets. ?We are investing in new talent who can individually add value to its services. Strong ideas require less media spend and lesser production budgets,? he added.

With the uncertainty in economic environment, many ad agencies are tightening their budgets for discretionary spends to cut costs. While some agencies are hiring only for critical positions, there are others who are recruiting to add muscle to its existing manpower.

According to Srinivasan Swamy, chairman and managing director of RK Swamy BBDO, the agency is doing away with wasteful expenditure that can be postponed. ?If our clients are cutting costs, we manage that reduced budget expeditiously,? he added.

Meanwhile, GroupM India, part of the WPP Group, has developed a media tool to get a big bang for its advertisers? media spend. On the agency?s strategy, CVL Srinivas, CEO, Group M, South Asia, said, ?We are mapping out smaller towns to help our clients get robust data for micro targeting. We have just launched a tool that will guide clients on how to optimally spread their investments across media.? GroupM India continues to hire to fill in critical positions and has tightened its discretionary spending to counter slowdown.

Like GroupM, Aegis Media India, part of Dentzu Group, is in the process of rolling out its global property ?consumer connection study? to stretch their clients? ad budget. ?This study tells us how each consumer interacts and consumes various media at various touch points. The study has covered 18 cities,? said Ashish Bhasin, chairman of Aegis Media, South Asia.

The Indian advertising market is expected to grow at 7.8 % in 2013 outpacing its GDP growth, according to Intepublic Group?s strategic global media unit Magna Global. ?Television and print are expected to contribute two thirds to this growth with television advertising growing at 6.6%, digital media at 31 %,? predicts Magna Global.

Deaftfcb Ulka is advising its clients to ensure that key markets, key brands are fully supported during the economic downturn. ?Launching products need to be reviewed since in some sectors market sentiment is low; so it is better to launch when sentiment improves,? said MG Parameshwaran, ED & CEO of Draftfcb Ulka.

According to Parameswaran, the agency is continuing with its routine recruitment plans such as its Star One programme and entry-level programme that has been running for 20 years. ?All other hires are being done very carefully,? he added.

Sam Balsara, chairman of Madison World, said the agency is still recruiting to handle the influx of its new account wins. ?We have always been cost conscious and extremely frugal on non-essential costs like rent, travel and overheads, so there is not much scope to further cut,? said Balsara.

Like Madison, Grey India is also recruiting to handle the influx of its new accounts. ?We have won quite a few new clients so there?s a need to gear up for future challenges,? said Grey India president & CEO Jishnu Sen.

In essence, as clients seek a lot more accountability for their media investments during the downturn, advertising and media agencies are helping them eliminate wastage and make every rupee count.