Mumbai: Client confidentiality in advertising is increasingly coming under the microscope as markets and consumer confidence melt.

This is not surprising since sensitive data related to a brand’s performance and strategy are on tap at advertising agencies and any leaks to rivals during these difficult times could be devastating.

Putting in safeguards: Chandradeep Mitra of Mudra Communications (left), and Ajit Varghese of GroupM. Some clients have been known to make surprise visits to agencies to make sure the systems are foolproof.

“Even for advertisers that may have teams or units dedicated to them, the top bosses of agencies are usually in the know of all that happens on their businesses. Chances of leaks are mostly from the top."

While some advertisers do not permit their agencies to handle rival brands in the same category, others allow agencies to handle competing business as long as separate client or brand servicing teams, units, or even secondary agencies are established to handle these business conflicts.

Some advertisers are, however, asking if these Chinese walls work. More than the obvious leaks, they fear the subliminal sharing of information and creative strategy since the intellectual backbone and top management and creative talents would often be the same across agency teams, units and secondary agencies.

The knowledge and experience gained from handling various brands, strategies and creative works would inadvertently migrate from one brand to another through the mental funnel, they say.

Also, the creative and strategy teams on a brand are usually moved from one brand to another to prevent boredom and ensure fresh thinking. These travelling teams can often inadvertently migrate insights and ideas across rival brands.

Agency leaders such as K.V. Sridhar, national creative director, Leo Burnett India Pvt. Ltd, however, say it’s wrong for clients to expect agencies to handle them exclusively. And compensation systems make it impossible for agencies to stay in business that way, he says.

“In the olden days, if you had one financial brand, you couldn’t work with another," says Sridhar. “Today, we are paid one-tenth or even lower of what clients make in the market. Two clients may be from the same category but addressing different markets and different segments. Why shouldn’t an agency work with both?"

A retail advertiser, who did not want to be named, says that despite ad agencies boasting of separate agencies or teams to handle rival brands, most units are located in the same office. They share common back-end resources such as accounting processes, research systems and specialist functions, and research and knowledge-sharing processes.

What’s more, top bosses such as the managing director, chief executive officer and national creative director, are kept in the loop for all crucial strategic and creative decisions on leading brands, the advertiser points out.

Some other advertisers, who also did not wish to be identified, say that separate companies for handling accounts of rival marketers do not necessarily guarantee confidentiality. Not only do sister companies share resources, they also have a common creative council at the international level where competing brands and solutions for them are discussed, these clients say.

Media specialists such as Chandradeep Mitra, president, Mudra Max, Mudra Communications Pvt. Ltd, say sharing of category knowledge is fine as long as no client-specific information slips out.

He, however, points out that agencies, in their enthusiasm to handle diverse clients where there could be a conflict of interest, do not have the right controls in place.

Agencies handling rival accounts can find themselves in a tight spot when dubious clients demand competitor information. Mitra recalls an incident when a client demanded something similar from him and he had resisted. “Top bosses must not break the rules, however much the pressure," he maintains, advising that it’s prudent to limit access to confidential brand information.

Some advertisers believe separate agencies can make for less porous structures than separate teams. Sanjay Behl, group head, brand and marketing, Reliance-Anil Dhirubhai Ambani Group, or R-Adag, says ownership and accountability rise dramatically under separate structures devised for clients.

R-Adag’s media planning and buying is handled by a separate agency called Radar, which is within the Mudra Communications fold. “This kind of set-up enhances business delivery. There are quality people deployed and it’s easier to align your processes under a dedicated unit. We look upon them as virtually outsourced employees," says Behl. “But one should trust the integrity of the agency for better delivery."

He, however, says the dividends of dedicated resources, and hence faster turnaround on projects, were what spurred R-Adag to insist on a discrete agency. Enhanced confidentiality was a bonus.

Globalization is another factor. Most Indian agencies are now owned by international ad groups and all member agencies can tap global knowledge backbones and tools from specialized communications divisions, and sometimes even access sensitive brand information related to a rival in another market handled by another member agency.

Ajit Varghese, managing director, Maxus, GroupM India Pvt. Ltd, says that in terms of knowledge-sharing, GroupM keeps a library of case studies on various clients but no sensitive information such as budgets is listed in these presentations. Besides, much of this information is already in the public domain and the presentations are made after consulting business heads of various companies, he adds.

Even as agencies continue hiving off new cells and agencies to handle competing business and grow profits in these challenging times, Aniruddha Banerjee, president and chief operating officer, Publicis Ambience, says agencies ought to have safeguards to ensure they are not using one client’s strategy against the other.

To address this situation, some agencies are considering putting exclusive brand teams in place, instead of rotating teams across brands, or looking at setting up completely different agencies for certain big clients, so that there is less back-end sharing. In line with their global peers, some are also making access to critical brand information available to only key people on the account.

GroupM, the media specialist of WPP Group, for one, has physical safeguards such as access cards to critical information. Some top managment executives, such as Mudra’s Mitra, also see merit in excusing themselves from agency meetings where sensitive information outside their purview could be shared.

Meanwhile, clients such as Procter and Gamble Co. have been known to make surprise visits to agencies to make sure that foolproof systems exist, says an ad executive who does not wish to be identified.

However, some agencies say it is only the advertising industry that has to face questions on integrity, while sectors such as information technology go scot-free.

“Why doesn’t one ask Infosys Technologies Ltd how it maintains confidentiality while working with conflicting clients?" asks Varghese. “Why are these questions put to (advertising) agencies?"