It can be called Indian advertising’s second coming.
Wieden+Kennedy, the creative hotshop behind the Nike ads, has announced that it will set up shop in Delhi to service Nokia mobile phones, on the heels of its global win of the company’s ad business. This will be the first American independent agency to enter the country, Wieden + Kennedy’s chief operating officer David Luhr told AdWeek on 5 July.
According to news reports, two Australian agencies, The Campaign Palace (TCP), allied with the Young & Rubicam advertising network, Naked Communications, and UK-based Beattie McGuinness Bungay (BMB) are also looking to set up shop in India. Trevor Beattie, co-founder of BMB, said during an advertising festival held in Goa earlier this year that an India launch was on the cards for the agency.
A report that appeared in May in Australian advertising magazine B&T said Young & Rubicam is considering taking TCP global. And in November 2006, Simon Sherwood, the COO of Bartle Bogle Hegarty (BBH) said the agency would soon set up an office in India.
The agencies aren’t known for their size—although W+K reported global billings of$1.4 billion (Rs5,656 crore) in 2006—but they have a reputation for being at the cutting edge of creativity. And their India entry is as much a result of globalization as it is of the growing attractiveness of the country’s advertising market.
Drawn to business
Executives in the ad industry in India estimate the size of Nokia’s advertising account at Rs100-110 crore a year. The country is the fastest growing mobile telephony market in the world and at the end of May had close to 175 million mobile subscribers. That number will rise to 500 million by 2010, according to the department of telecommunications.
In terms of phones, Nokia leads the market with a 70% share, according to Harit Shah, research analyst, IT and telecom, at Angel Broking, a Mumbai-based brokerage. But while this number has remained constant, Shah said Motorola has grown its share from 5% to 14%. “Nokia been under pressure for a while now to create a campaign which delivers. It hasn’t managed to create a buzz around its N-series mobile phones either, while Motorola has managed to create quite a lot of noise with its campaigns for MotoFlip, the ‘Rock On’ campaign for MotoROKR with Abhishek Bachchan, and the one for MotoSLVR,” said an executive in the telecom industry who did not wish to be identified.
Wieden+Kennedy, or W+K, as the company is widely known, could help change that, say advertising experts. Nokia’s advertising in India is currently handled by Bates David Enterprise India.
Devinder Kishore, the head of marketing for Nokia India Pvt. Ltd said “W+K has been appointed the creative agency for Nokia globally and India is very much part of that world.” He added that the company is still working out a division of responsibilities between its agencies in India.
Most creative hotshops are entering or eyeing an entry into India because their clients are already here. W+K does some work for The Coca-Cola Company, Procter & Gamble, Starbucks Corp. and Nike Inc. Naked Communications’ roster of clients includes The Coca-Cola Company, Unilever Plc., Microsoft Corp (for MSN and XBox), Sony Corp. (for Playstation), and Johnson & Johnson. And BBH has clients such as Unilever, Levi Strauss & Co., Perfetti Van Melle, Diageo Plc., Sony Ericsson Mobile Communications AB and British Airways Plc.
Each of these agencies believes in advertising that involves a radical approach to creativity that is summed up by what John Hegarty, the founder of BBH, once said: “When the world zigs, you zag.” The Publicis group, present in India through Publicis India, Ambience Publicis Pvt. Ltd and Leo Burnett India, has a 49% stake in BBH. Trevor Beattie of BMB has won renown for his striking campaigns for French Connection and the Labour Party.
Even as these agencies threaten to take away business from network agencies (those that are part of large conglomerates such as WPP’s JWT India or IPG’s Lowe) they are setting the stage for small indie vs indie skirmishes: for instance, Naked Communications and W+K both work on the Coca-Cola account.
The network effect
Large Indian agencies aren’t particularly perturbed by the entry of the creative hotshops. Arvind Sharma, the chairman of Leo Burnett India, said his agency has a good relationship with Coca-Cola because of “ some awesome work we have done for their brands”. He added that Coca-Cola could be expanding and “may be looking at multiple agencies. W+K is a good agency that is focused on putting out some quality work. And their entry in this market will be good for the industry as a whole. Not only will it raise the standard of work, but also go a long way in attracting talent,” he said.
In an interview with Ad Age, W+K’s Luhr said his agency would initially sign up 20 people for its Mumbai office.
Executives in the advertising industry said the firm could consider an alliance with a local agency.
The real challenge for the creative hotshops could be people. The Indian advertising industry grew by 23.6% in 2006, to Rs16,300 crore in size by capitalized billings (the size of the industry isn’t calculated on the basis of how much income it earns, but the total value of advertisements it places). Riding on an economy that grew 9.4% in 2006-07 and is expected to grow at over 8% this year, the advertising business will grow at a faster rate this year. The big network agencies are scrambling for talent and new entrants such as W+K will have to compete with them.
The creative hotshops know this, but they cannot afford to ignore India. An India-presence is crucial to W+K, for instance, because the country is the third largest market in the world for Nokia’s phones. A beach-head in India helps these agencies win global pitches. BBH discovered that when it pitched for Unilever’s Omo brand of detergents.
The multinational’s Indian arm, Hindustan Unilever Ltd, ended 2006 with Rs13,020 crore in revenue and is among the two largest consumer products companies in India. Nokia’s Indian arm is the other.