Account moves in advertising business see change in approach2 min read . Updated: 17 Aug 2010, 11:06 PM IST
Account moves in advertising business see change in approach
Mumbai: In the first week of August, Coca-Cola India ended a decade-long relationship with Madison Media, its so-called agency of record (one through which it routes all ads) and handed the account, worth around Rs200 crore according to some ad executives, to Lodestar UM.
Such changes are a recent trend in Indian advertising, where both clients and agencies value relationships. Yet, they have become increasingly common over past months with, apart from Coca-Cola, several large advertisers such as Bharti Airtel Ltd, Reliance Communications Ltd, L’Oreal India Pvt. Ltd and Parle Products Pvt. Ltd have appointed new agencies to handle either the so-called “creative" part of their advertising accounts, or the media (planning and buying) accounts, or both.
Reliance Communications, for instance, has moved media duties for its telecom business to GroupM’s Mediaedge:cia, that for Reliance NetConnect cards and Big, its DTH business to OMD, and consolidated creative duties for all businesses with the Grey Group. All the media accounts were earlier with Mudra Max. Bharti has moved creative duties for its telecom brand to JWT India from Rediffusion Y&R. Earlier, in July L’Oreal moved its media account from Lodestar to Maxus—an agency under Group M—and Parle products, from TME, also to Maxus.
One media expert said the changes were the outcome of the “new economic environment" where organizations are required to review all arrangements. “It’s not just about getting the best price. It’s a more holistic review to ensure that you have the best arrangement in place. Beyond cost, the review takes into consideration the inputs clients are getting from the agency, the talent working on their account, the quality of advice, among other things," said Meenakshi Madhvani, managing partner for Spatial Access Media Solutions Pvt. Ltd.
An advertising executive said shuffles are a global phenomenon that is now catching on in India. Shashi Sinha, chief executive of Lodestar UM, whose agency has won some and lost some in recent shuffles, said that the era of 10-11 year agency-client relationships is ending. “Now, it’s about short-term relationships. And that’s more in accordance with what the global management does. Globally, advertising businesses are periodically up for review every two to three years," he said, declining comment on both L’Oreal and Coca-Cola.
Reliance Big TV’s chief executive officer, Sanjay Behl struck a similar note and said the parent company Reliance Communications moved its media business out of Mudra Max because it had decided to periodically review media and creative duties for group businesses, in accordance with global norms. This, despite Mudra and Reliance Communications being stablemates in the portfolio of the Reliance-Anil Dhirubhai Ambani Group. Some of the realignments would also appear to be prompted by the parent companies or advertising conglomerates of which various media and creative agencies are a part. In these cases, the parent moves an account from one of its agencies to another to address issues raised by clients, ensure a better fit, or provide specialized service.
The Indian arm of WPP Plc., the marketing conglomerate of which JWT, Ogilvy and Mather, Rediffusion Y&R, Group M, and several other agencies are a part is, for instance, believed to have played a part in Colgate Palmolive India Ltd moving its creative account from Rediffusion Y&R to Bates 141, also part of WPP. It is also believed to have played a role in Bharti Airtel’s decision to move creative dutires from Rediffusion Y&R to JWT. A spokesperson for Bharti declined comment on the issue. Interestingly, neither Bharti Airtel nor Colgate sought competitive pitches.