How businesses are reprioritising their advertising spends in the new normal

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Updated: Sep 18, 2020 7:09 AM

Most brands in the market have cut budgets and retainer fees by 20- 30%

At this stage, clients are not looking for cheaper agencies or boutique agencies or large network agencies. They want a team that can solve their immediate problems, Subhash Kamath, CEO, BBH and Publicis Worldwide, India saidAt this stage, clients are not looking for cheaper agencies or boutique agencies or large network agencies. They want a team that can solve their immediate problems, Subhash Kamath, CEO, BBH and Publicis Worldwide, India said

Publicis Groupe integrated BBH India with Publicis Worldwide recently, under the leadership of Subhash Kamath, who is also the newly elected chairman of Advertising Standards Council of India (ASCI). Kamath talks to Venkata Susmita Biswas about the strategy behind the integration, the shrinking ad budgets, regulating digital ads, and more.

How does the integration with Publicis Worldwide help BBH India?

Over the years, we have created a very sharp positioning for BBH in the market — as one that provides strategic and creative brand communication. However, market dynamics have changed; digital media, content and data analytics have gained importance. Investing in each of those areas on our own was getting difficult for us, whereas Publicis as a group has moved far ahead in terms of investment into these areas. We were already wholly owned by Publicis, and it made sense to be more integrated with the group and have access to areas we could not invest in. This will help us achieve greater scale.

Aren’t brands more comfortable using smaller/ boutique agencies now to rein in spends?

Across categories, we are seeing a dip of 20-40% in business. At this stage, clients are not looking for cheaper agencies or boutique agencies or large network agencies. They want a team that can solve their immediate problems. We do not see ourselves as a boutique agency; we work with a wide range of brands such as Marico, BookMyShow and Audi. While we are extremely competitive in our pricing, we are not cheap at all. In fact, we are a premium brand, and have been able to command a premium, but within the competitive scenario.

How has the creative agency business been affected by the pandemic?

We have seen a reduction of business because of reprioritisation, and a reduction in budgets.

Because of the lockdown, executing some of the work we have done over the last few months has been restricted — we have almost 15 to 20 scripts approved and ready. If this were a normal year, half of these scripts would have been shot by now. During the last few months, we bagged some clients, including Onsitego. However, I wouldn’t say it is business as usual.

There have been a lot more project-related conversations rather than long-term partnerships. There are clients who have cut down on retainers. Businesses that need to continue to operate in the market have cut budgets and fees by 20- 30%. In certain sectors where business is almost at a standstill, like tourism and hospitality, there is a freeze on marketing spends for a while.

How have campaign briefs changed during this period?

Most of the work that we are doing, unless it is tactical communication, is not related to Covid-19. BookMyShow’s business had been hit very badly by the pandemic; ditto for Audi. For such clients, we have been working on scenario planning — to evolve different tactics and strategies to manage scenarios as they develop.

What is possibly changing is the media mix, with a skew towards digital. There is surely a greater focus on e-commerce, digital advertising spends and reprioritisation of marketing plans. Further, clients have realised that they need to prepare to go back into the market. So, they have been using this time to develop concepts for the future.

How well are ASCI’s regulations able to keep up with the evolution of digital advertising?

With the evolving digital landscape, it was only natural that our suo-motu monitoring included the digital space, in addition to the screening of television and print. We have now partnered with TAM to monitor 3,000 digital platforms, including search engines like Google and Yahoo!, and video and display ad platforms like YouTube. The monitoring covers about 80% of India’s digital spends.

Currently, the TAM arrangement does not cover OTT advertisements; also, social media, being a gated platform, is also not tracked through this service. The Cable TV Act clearly states that ads that do not conform to ASCI codes will not be allowed to air on television. Similarly, we have to see if OTT comes into that context. Currently, our mandate does not focus on content; it focusses on paid commercial advertising. What constitutes advertising is now an evolving debate, and we need to ascertain whether branded content can and should come under ASCI’s purview.

Read Also: How marketers can forge strong consumer connections during and after Covid

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