Big spenders advertisers prefer start-ups for digital

03 Oct,2013

 

By Kala Vijayraghavan & Lijee Philip

 

In September 2012, when Mahindra & Mahindra was preparing to launch its compact SUV Quanto, it overlooked its mainstream advertising agencies Interface and Lodestar, and went to Hungama, a boutique agency, for a digital ad campaign screened in malls. Hungama developed a technology where a consumer’s electronic car key started a Quanto ad on a computer screen, which went on to simulate a feel of the vehicle in typical weekend settings. The idea was to create a digital experience of the SUV and help the brand break out of the clutter in a competitive segment.

 

“The response time for social media activities should be next to nothing,” says PN Shah, CEO, automotive, Mahindra & Mahindra, explaining why he preferred a specialised digital agency over tried-and-tested partners.

 

“We need tailormade, online, onsite and on-time solutions that help us react and respond quickly.” Like M&M, top consumer companies, including HUL, Godrej Consumer, Ford and Honda, are now cold-shouldering their traditional ad agencies such as JWT, Dentsu, Mindshare, Interface, Lowe Lintas and Mudra to tap social media marketing agencies such as WATConsult, BCWebWise, Bloggers’ Mind, Blogworks, Digit9.0 and other such startups for their digital requirements.

 

“Traditional agencies are not thinking digital adequately,” says Hemant Bakshi, executive director, home and personal care business, HUL. “They are creating digital as separate divisions. Digital has to be at the heart of the communication and not peripheral to it.”

 

Counters Suman Srivastava, ex-CEO, Euro RSCG and founder of Marketing Unplugged, a marketing consulting company: “It is fashionable to blame agencies or say they tend to think in silos. But the fact is the traditional marketers themselves do not understand the medium.”

 

HUL has worked with BCWebWise quite a bit ever since Chaaya Baradhwaaj, its founder and CEO, launched HUL’s Sunsilk Gang of Girls, an online social networking website built around its leading beauty shampoo brand in 2006.

 

Youngsters, who embody the credo of the internet age of being ‘digital natives’, are now guiding companies in digital, which is emerging as a disruptive force in consumer marketing. “Our roots are in digital. We come with no baggage of other media,” says BCWebWise’s Ms Baradhwaaj. “The dynamics of the technology-driven medium, the interactivity it offers, and the fact that consumer pull by far supersedes brand push can be inherently understood if you have been eating, breathing, and living digital in your advertising/communication life.” Adds Sunil Kataria, chief marketing officer of Godrej Consumer Products: “Twenty-something youngsters are able to understand digital better as a disruptive force in consumer marketing. We are tapping such specialised agencies and startups.”

 

Mainstream advertising agencies counter this, saying there’s no great work happening. “These are college kids charging a low fee from these companies to earn extra money,” says Partha Sinha, director Asia, Publicis, a large advertising agency.

 

“None of our digital ads have even been shortlisted at Cannes.” According to Mr Sinha, companies have created a perception barrier, and themselves do not have the systems and skills to understand digital.

 

“They are only doing basic maintenance work on social media,” he says. “The fact is, companies are not desperate on digital. They are still hung up on outdoor and television. The day companies get serious about social media internally is when they will find similar change in their advertising agencies.”

 

HUL is integrating social media and mobile into the marketing of its brands at the planning stage itself. These were premium brands that have a high online audience such as Tresemme, Sunsilk, Lakme, Closeup and Surf. In the next two years, it expects to treble ad spends in online and digital, taking it to 10% of its overall ad spends.

 

Similarly, Godrej Consumer opted to tap an integrated design company, Creativeland Asia, for its digital campaigns to relaunch its Cinthol brand (MakesMeAlive) and launch its air purifier brand, Aer (colouryourfriendsapp). “Social media cannot be just an appendage to your traditional medium,” says Mr Kataria. “We are a new breed of organisation that thinks from the society aspect and then fashions our campaigns, and not vice versa,” says Sajan Raj Kurup, founder and CEO, Creativeland Asia.

 

Sourav Jain, a social media marketing specialist, feels traditional advertisers have a lot of catching up to do. “They do not understand the technicality of the process in social media,” he says. “Social media is not only effective, but is also relatively inexpensive. Here, one gets a chance to interact, and build relationship and reputation for their brands.” Admitting that big agencies took to digital with a lag, Arun Iyer, creative director at Lowe Lintas, says they are up to the task today. Like Mr Sinha of Publicis, even he sees it as a perception problem at the end of the companies.

 

“Even when we make our presentation in the digital space, clients do take a look at it, but then chose a smaller specialist,” says Iyer. In the current context, smaller players are packing more punch. “They are far more specialised and are able to build expertise faster,” says Rajesh Lalwani, founder and principal of Blogworks, a Delhi-based social media agency. Its team of 28-30 people has worked for Harley Davidson and Ford Fiesta AT model.

 

Mr Lalwani says that, for most auto companies, social media accounts for 10-20% of their marketing spends. “Bigger agencies seem indifferent to social media at this point of time since it is too small to interest them,” adds Jnaneswar Sen, senior vice-president (marketing and sales), Honda Cars India.

 

Despite working with Soho Square (part of Ogilvy), Dentsu and Grey Worldwide, when it came to leveraging social media to launch Amaze, Honda selected Blazar, a small boutique advertiser. “They are managed largely by a younger team,” says Sen. “They clearly know what the young generation wants.” Adds Rajiv Dingra, CEO of Mumbaibased social media agency Wat Consult, which ran the social media campaign for the Mahindra two-wheeler Centuro and Ford: “Car buying is a high involvement purchase and social media helps to keep the buzz alive.” Dhingra feels this does not come naturally to large agencies. “They are unable to specialise and build depth. We were able to quickly foresee what the consumer wanted. ” Understanding feedback/data, and modifying plans quickly, is a challenge best handled by smaller players, according to Carlton D’silva, chief creative officer of Hungama Digital. “Most likely, larger ad agencies will acquire boutique agencies rather than developing capabilities from scratch.”

 

Source:The Economic Times

Copyright © 2013, Bennett, Coleman & Co. Ltd. All Rights Reserved

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