With the start of the new fiscal year in April, it’s time again for advertisers to review business relationships with ad agency partners. But, this fiscal, the intensity perhaps is greater than it has ever been: Ad and media buying agencies are faced with a deluge of pitch invitations, with advertisers either launching new products or categories, or wanting to change agencies in their quest for fresh creative and branding strategies and a chunkier market share.
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Typically, this exercise extends into May and, sometimes, the entire first quarter of the fiscal. If pitch fever is more intense this year, it is because of economic volatility and client angst at plateauing, or even shrinking, sales and market shares, say ad men. Also, the slowdown in the US economy is forcing multinational advertisers to review and realign agency partners on a regional and global basis.
Meenakshi Madhvani, managing partner at Spatial Access Media Solutions Pvt. Ltd, says a new fiscal year signals new partnerships. “It is also a time when there are several management changes in companies, and a lot of top marketing officials switch base. As a result, a new guy steps in and he questions a lot of what was being done on the brand. Result: The account goes up for a review.”
“Not everything is about the 30-second TV commercial,” says Abdul Khan, president of marketing at Tata Teleservices Ltd. “Agencies frequently fail to fulfil business objectives, and struggle to understand areas such as new media, grass-roots level, etc.,” he adds, explaining why so many brands change their ad partners around this time.
If the competition is stiffer, both sides are also becoming more selective: Advertisers are more choosy in their invitations; some agencies are more selective in what they pitch for. Interestingly, around 70% of all pitches since January have been for local businesses, and 30% for global businesses, says Madhvani. In value terms, global business pitches would have a bigger share, though. Of the local pitches, 20% were for new businesses.
One more change is the presence of more Indian ad executives on global pitch teams that present creative, brand or media strategy for clients such as Unilever Plc. and Mattel Inc.—India is emerging as a critical part of their growth plans.
Highly competitive sunrise categories, such as cellular phones, financial products, infrastructure, retail and electronics, have led in pitch activity.
Big-brand accounts up for grabs this season include Tata Indicom, BPL, Kingfisher Airlines, Kotak Retail Banking, etc., says Josy Paul, chairman, BBDO India. “Agencies are busy pitching for new business these days. They seem to wear the number of pitches that they are doing like it is a badge. I heard someone say, ‘Oh, we are doing six pitches this week. What is your score?’”