The Justice League of creative agency start-ups is here, each of them with avowedly niche offerings… How will they stack up in the days to come?
By SALONI DUTTA
When start-ups in every sphere have taken the world by storm, can adland be far behind? Ad world has a whole new bunch of creative entrepreneurs, who have just set sail on their own journey, breaking away from the big agencies they worked for… They claim to be different, they claim to offer niche services, they claim to think out of the box... though this has happened every time creative people have launched start-ups in the past. Some worked for themselves and some worked towards creating value and living the dream of being acquired and earning something that their ‘regular’ creative jobs would not have given them. This year saw a lot of high level advertising talent quitting and starting out or planning to start their own agencies… The whole agency landscape has been dishevelled with such a drastic transformation in its structure. While Pratap Bose, Abhijit Avasthi, Chraneeta Mann, etc., have already set up shop, others such as Malvika Mehra, Navin Talreja, etc., are yet to announce their next step.
The advertising industry is in the process of regeneration. Right from the late seventies and eighties which saw the birth of Mudra, Trikaya, Rediffusion, Enterprise and Nexus, among others, we have witnessed regeneration every decade. It has been a mixed bag of results. But the process never ceases. Many agencies have come and gone. Some of them were able to stick around and do well, like Creativeland Asia, Happy Creative Services, Bang in the Middle, Enormous Brands, Curry Nation to name a few. Going back to an IMPACT cover story of three years ago, when we had a similar situation with the launch of 10 odd agencies (Bang in the Middle, From Here On Communications, Brandmusiq, Idea Democracy, Page Advertising & Communications, Pundalik, Kettle Communications, Reel Stori, TMC Corporation and Stepathlon Lifestyle), a lot of those names have just faded away. Though a few agencies are getting stronger and better, the rest are just names, there is no significant body of work or clients that would help them sustain. The most recent crop of agencies were floated almost a year-and-half-back, with the launch of names likes Whyness, ITSA Brand Solutions, Underdog Communications, etc., which have been performing fairly well. And now, picture another set of superheroes at work, creating something ‘different’ for the new economy and working towards breakeven sooner than it used to be earlier.
AGENCIES FEATURED...
This difference eventually lies in the services the agency is equipped to provide, and the clients come on board accordingly. Since mobile and digital are the holy grail in today’s tech-led world, a lot of these agencies are specifically focusing on giving targeted campaigns and returns to brands using all kinds of uber-cool technologies.
The other aspect is specialization, and so some of the agencies are offering very specialized services, albeit with the claim of getting sure=shot results out of them. Commenting on the launch of a number of start-ups and how it will affect the agency landscape in India, Abhijit Avasthi, founder of the recently launched agency, Sideways, says that this is the time of entrepreneurship in India but what’s important in the scheme of things is the reason why people start up on their own and that is what will define the success of these agencies. “Eventually, it will all stabilize, and in a landscape like India with diverse needs, you need the big traditional agencies, small specialists, collaborators, et al,” he adds.
The language these firms speak is radically different. They want to reinvent the wheel and focus on specifics in this age of specialization. Digital and mobile are their specialties, and not just offerings in the bouquet of services. But as one has seen over the ages, how well they keep up with the work in these specialist offerings, consistently over a period of time, defines the success of the agency. Otherwise, they will go back to the comfort of doing TV and Print. And some will just cease to exist. Everyone might also not have the same reason for starting on their own. While all of them talk about this being the next big step, a lot of people think it’s an alternative to not having enough or more options to do next.
That leads us to the question - is there a need for so many agencies in this already fragmented market and how many is too many? The year has been a good one for the agency business overall, with the market improving and stabilizing a bit. The landscape also saw the emergence of the new ‘big’-sized agency with Mullen Lowe aiming to grab a bigger share of the pie. With the overall market stabilizing and growth predictions looking good for the coming times, the Pitch Madison Media Advertising Outlook recently revised its growth forecast for 2015 upwards. Against the original forecast of 9.6% growth, projected in February 2015, the study has now revised its forecast upwards of 13.8% for the total advertising market. This upward revision is because of a steep increase in spends on TV in the January-June 2015 period, up by 20.6%. This growth rate is likely to extend to the second half of the year too, resulting in a sharp growth in the TV advertising market – perhaps as high as 21%. Such a high growth rate is unprecedented and has not been achieved in the last five years. With such optimism floating around, this seems the perfect time to venture out with a creative agency of one’s own, keeping in mind, however, that it is going to be a struggle anyway, no matter how big you were, how popular your work was, how well connected you were… it will still involve a lot of toil and effort to get the wheel rolling.
Sandeep Goyal, Founder and Chairman of The Mogae Media Group, shares his expertise and insights as to what goes behind launching a successful agency.
Q] With the agency landscape in India witnessing a lot of additions over the last few months, how do you see it evolve in the coming times? What is the scope for the agency of the future?
My personal belief is that there is no money to be made in an ad agency, in fact there was no money to be made in an ad agency even 10 years ago, and it is going only worse, so full service ad agencies or creative ad agencies or creative boutiques to my understanding have very limited possibilities. They can only do so much and they can only earn so much. The reason that we are in a very well defined domain for mobile is because today mobile is 900 million customers. It may take two, three or even five years, but the kind of money that you see in Television will very soon be on mobile. Mobile as a medium will overtake all the other mediums. The kind of skillset you require in this is very different from the skillset that you require in a traditional ad agency. Mobile is largely one-to-one communication. It is not one-to-many communication. Yet it is not CRM. Mobile has the advantage of geographical specificity, time specificity, plus I can send the message in any format I want to – text, video, image. So that is the reason we have decided to narrow focus ourselves on mobile. The competition is negligible; understanding of category is still very low for most people and so, on the flip side, finding talent is also very difficult. But it is an interesting category to be in.
Q] What are the things that these entrepreneurs should keep in mind before venturing out?
Most of the guys at startups are looking for valuation. If I start a business I look at value. There is a big difference between value and valuation, and value means that it has to make profit. So if they don’t fundamentally run a business which is profitable and makes money at the end of the day, they can’t run the business. With a lot of these startups because they are tech, a lot of funding is coming in but advertising people hardly get funding. For a lot of entrepreneurs, the question to ask is whether the business will create value and therefore makes sense as a start-up or whether, and I am not being unkind, it is because the traditional road in advertising had now ended and hence the need to create a startup. When I started Dentsu and worked towards making it a success, there were few things I followed. Number one is hard work. Number two is that the business has to have scale with size. Scale means it has the potential to grow. Most of these guys who are launching, the first thing that they should know is how big is the idea.
Q] What would be your key advice to people who are looking at tarting their own firms or have already initiated the process?
One big problem that we have always had in this business is that people think small. One campaign or winning an award whether at Goa or Cannes. Nothing that we have created in this country is of a global scale and size.
The one thing that has never failed anyone is a bit of hardwork and I get a little flustered at my age today when lots of new kids who have entered don’t have patience. In our day and our time and even today one valuable thing is value creation. So whatever business you are building make sure it is a profitable business, because we still haven’t seen valuation happening in advertising startups.
Q] How has the ‘Hand of God’ as mentioned by you in Konjo, worked out for you? What are some of the lessons that we can take away from here?
God doesn’t play favorites; he just rewards those who do their fair share of work. Talking about examples the case with HDFC Life and Park Avenue which is well documented in my book Konjo, where I lost one big account but somehow won another account, though not that big the same day. Similarly with Suzlon, I was introduced to Tulsi Tanti via a few banker friends during a normal chat, and they were almost on the verge of signing a contract with Contract. We presented to them in a couple of days and won the account. So I don’t know how much a role God had to play in it. The fact that I met my friends and they told me about Suzlon and took me to meet Tulsi Tanti, is where God comes in. But then taking over from there and making a presentation is something where your hard work comes in.
