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Harsha Subramaniam

CHENNAI, April 18

PROFAD, a Chennai-based agency, has bagged the advertising account of Chemfab Alkalies, marketers of Team mineral water and other homecare products.

The agency has also finalised a deal with personal products company, CavinKare. However, details regarding the deal were not revealed.

If a new account is an indicator of new business being generated, is the worst over for advertising agencies?

"These are the best of times and the worst of times," replies Mr Jagannath Ramaswamy, President of the agency, referring to the slowdown in the advertising business.

That times are tough is evident as ad spends are going down, payments are delayed and clients are pressurising agencies. But he believes, the best has been the lessons learnt from the tough times. "The biggest learning of the recession has been the financial discipline that agencies have been forced to adopt," he says.

For instance, some agencies are now drawing up budgets based on 80 per cent of the income of the previous year rather than make projections by factoring a 20 per cent growth. He says that this financial prudence shows that agencies are not living in an artificial world anymore. "Artificial hype about the advertising business has gone," he adds. The two-decade-old agency had total billings of Rs 17 crore this year. It expects a modest growth of around 12 per cent for the current fiscal.

Profad too has learnt its lessons of the downturn. It is now approaching PSU clients, a terrain unexplored hitherto by the agency. It was recently empanelled by the State government's DIPR (Directorate of Information and Public Relations), which allows it to service Government departments. The agency has also bagged the advertising account of Aids Prevention And Control Project (a project jointly managed by VHS and US Aid) and Southern Railway. "It makes financial sense to work with these clients because you are assured of your payments," he says

On the current trend of media buying agencies, Mr Ramaswamy says that media buying monoliths are an eventuality that clients and media companies have to acknowledge. "If it means clients will get a better deal because of cost efficiency, it's good," he says. He also believes that agencies hiving off their media buying function will rid them of the burden of payments and focus on the planning and creative function instead.

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