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The new age Ad-world
Global advertising industry has moved beyond the boundaries of print and TV as Internet is set to rule the roost. David Klein, Publishing and Editorial Director, Ad Age Group, tells Neha Saraiya how the ad-world is shaping up post recession...
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 4Ps B&M: What is the key difference between Indian advertising industry and global advertising industry?
DK: Generally speaking, in every country there is a local ad-market that serves their local businesses and marketers at all reach. And it’s applicable to India as well. However, India being so large the demographics and techniques are subjective to change. Also the trade reality is that marketers go by their own brand value. That means large multinationals like P&G, Microsoft, et al will go to the big names of the ad-world like JWT and O&M. Moreover, when countries become bigger in terms of economy local markets also expand. But then, global markets already have enough resources for these growing markets.
4Ps B&M: What has been the impact of recession on ad-world in general? Has there been an upward or a downward shift?
DK: I believe the American industry got a shock. As it is a mature market, the agencies saw a big decline of around 40-50%, but that again varied from industry to industry. On the other hand, Indian market, where you have a fast dynamic growth, was kind of immune to it. So, when recession hit and the US saw a major decline, India on the contrary just managed to escape with a declining growth rate. But most importantly, the industry in India grew, did not decline. As the industry estimates indicate it will start picking up soon.
4Ps B&M: So what are the strategies adopted by the advertising and media agencies to counter the recession?
DK: Well, media companies sailed through the rough waters by cost cutting measures. Basically they shut down their magazines and laid off people. The advertising agencies also made a stern cut on their employee strength and focused on public relations and direct marketing more than anything else. Overall, the advertisers have been getting more work and less money.
4Ps B&M: And what about media buying? Has it become cheap in anyway?
DK: Definitely, because you always get chance to bargain and bargain hard during a slowdown. Owing to the reason, this time also media buying in the US has become cheaper by a good margin. But the whole design of media buying is changing. Marketers have their own media and they are reaching pretty fast to their consumers. In fact, to some extent, media agencies in the US have actually become the lead partner with the marketers.
4Ps B&M: Which are the categories of advertising that you think has really grown well?
DK: The general feeling is that print media and TV advertising remained very healthy in India. But in the US, both print and TV advertising are hurt seriously. So in future the US industry will be spending more on Internet, digital medium, social networking, and technologies. Internet is really blowing through as my kids watch more TV on Internet than I watch on TV. But that’s a new edition. Now TV, which was a mass medium, is not bringing in as much revenue as it should.
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4Ps B&M: What are the reasons for it?
DK: Internet is the reason. Basically you must look at the fact that what Internet does is that it just blows across geographical boundaries. And affects all other mediums at the same time. Like for example- It helps people to get their music online, so radio as a medium becomes feeble. Then people go shopping on Amazon and eBay, so BTL and in house promotion are also hurt. Also Internet is a branded technology. So the buzz is shifting from TV to online. TV had been much bigger then Internet for long time, but now the trend lines suggest that TV is sort of going out and the gap is huge.
4Ps B&M: So you agree that Innovation is the main key?
DK: Without an iota of doubt, yes. Because you have to keep working like a shark and keep your teeth sharp. More importantly you have to do it before your competitors. So the agencies need to install innovation and that too on a constant basis.
4Ps B&M: What do the India advertisers need to do in order to catch up with the global advertising industry?
DK: From the media point of view, they should spend. But from the advertisers point of view they must understand that clients are looking at best prices and simultaneously at a share and innovation. However, the problem is that India spends less on advertising as a percentage of its GDP as compared to other countries. But then, a marketer should not be bothered about it.
4Ps B&M: What are the future trends that we should expect in advertising?
DK: Digital transformation, but in different ways. There are a lot of things happening at different levels. Companies are not just pushing messages out, but actually listening to consumers and acting on it. Moreover, they are inviting their consumers to participate in actual product development process. The danger is inherent in the fact that Internet connects everyone. So you can’t do a local job and offend people. Thus what you will see is whole new technologies like the social media. Today, all the top line marketers are using social engagement. But then does not matter how do they advertise, the basic line is the same, companies still need a great product to sell. So, what is important is that how do they engage their consumers to make them feel participating in their success. Because consumer participation can change a lot of things. The global audience is highly fragmented and India is also reaching out to it very soon. Reaching to the young people has become very difficult, but Internet is doing it. But then considering all the segments, Internet penetration still has a long way to go, and it will be driven by the technology and infrastructure.
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Neha Saraiya
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