Mumbai: Pinstorm and Lintas Media Group have announced a significant non-equity partnership. Designed to push clients to performance-driven media choices, the alliance between the two leading firms in the offline and online worlds will put further pressure on traditional agencies and media houses. This move is being seen in media circles as a positive step towards a more evolved phase in digital advertising.
Lynn de Souza of the Rs1,800 crore Lintas Media Group said, “We don’t think that just buying a digital agency will contribute to our client’s success. What attracted us to Pinstorm was their pure adherence to pay-for-performance – a vastly different model to the commission and retainer structures that Indian clients are used to. We think this model can go a long way in bringing accountability and transparency to investments in advertising.”
The pay-for-performance model was pioneered by Google and Yahoo, and has been pushed further by Pinstorm, India’s only MNC digital ad firm, where the agency pays for the media and the creative – and the advertisers just pays for results.
Mahesh Murthy, founder of Pinstorm said, “around the world, media costs are going up and clients are cutting commissions and retainers because they are unable to see how advertising is performing. At Pinstorm, we simply ask the client to pay for the prospects or results we deliver. Our alliance with Lintas comes from our joint belief that the Rs16,000 crore Indian advertising industry needs a new model. By working together, pay-for-performance advertising can be brought into the mainstream of advertiser choices.”
The alliance estimates that they will be able to drive an incremental Rs100 crore of advertising to move over from traditional models to a performance-driven model in the next 12 months. “Digital advertising accounted for just 4% of spend in India last year. With this alliance and other efforts, investments in digital advertising will cross the Rs1,000 crore mark, almost 100% growth over last year” said Murthy.
“An industry only grows when there is pay-for-performance. For too long have clients worried that their agencies and publishers are simply recommending higher media spends because that’s how they earn more. That era will soon end. Our work with Pinstorm is to collaborate on clients to give performance-driven options initially across digital media - but we hope over time to grow the same basis to traditional media like broadcast, print and outdoor too” added de Souza.
The Lintas-Pinstorm alliance will first come into effect on Lintas’ roster of clients and soon expand to other businesses. Lintas Media Group is among the largest media agencies in India, managing a spend of over Rs1,300 crore on broadcast, print, outdoor and other media for clients like Idea, Bajaj Auto, Maruti Suzuki, ITC, Sony, UTI and Naukri.
Pinstorm is the largest independent digital advertising firm in South East Asia, with offices in Bombay, Delhi, Singapore, Kuala Lumpur, Beijing and Santa Clara in Silicon Valley. It uses proprietary technologies across search engine marketing (SEM) search optimization (SEO), email, SMS advertising, online display advertising, online community creation and blog management to handle the performance advertising needs of Yatra, Jet Airways, Taj Hotels, Share khan and HSBC in India.
The alliance is effective immediately and in place across all advertisers in India.