Financial Daily from THE HINDU group of publications
Friday, May 03, 2002
Marketing - Advertising
Ad guys home in on unpaid dues
MUMBAI, May 2
BIG spenders usually end up with empty pockets and unsure reputations and the rule at least seems to apply to Home Trade Ltd.
A year ago on Budget Day (Feb 28), Home Trade Ltd, a new e-broking outfit, paraded Sachin Tendulkar, Hrithik Roshan and Shah Rukh Khan in a Rs 12-crore celebrity-based campaign. That move made advertising history in a recession.
Today, Home Trade has hit the headlines for other reasons, having been debarred by SEBI over transactions on Government securities that the RBI thought were "fraudulent" in nature.
Trailing behind the now-shut e-broking company is a queue of embittered agencies and consultants waiting for dues. And the queue is quite long.
Indian agencies waiting to claim their dues include the likes of Horizons Advertising (for creatives), outdoor agency Primesite and PR agencies such as Ad Factors and Citigate Dewe Rogerson.
Home Trade also used international agencies such as the UK-based St Luke's (for building its global brand) and the US-based Brierley & Partners (for its loyalty management programmes).
The Rs 2-crore Mumbai-based Horizons Advertising was responsible for the `Life Means More' campaign built around the three big superstars (Hrithik Roshan, Sachin Tendulkar and Shah Rukh Khan).
Claims Mr Avinash Shankar, CEO, Horizons Advertising, "Home Trade has been our biggest account till date.
The company stopped paying us since September last year and we are consulting our legal advisors. There is a fair bit pending with them but we expect them to first pay the Government and its own employees before it clears our dues."
For the nine-year-old ad agency, the onus of developing the Home Trade brand was possibly one of the biggest challenges since inception.
Laments Mr Shankar, "We just managed to release three out of the 14 ads on television. Besides, the print ads never got released."
In fact, out of its Rs 12-crore budget, a major portion was spent on media buying deals with channels. According to Mr Shankar, "A majority of its spends were directed at media buying in which direct deals were struck between the company and the channels." Somehow, television channels appear to have been cautious with Home Trade, realising the uncertain future of dotcom companies. Going in for advance payments while selling media has protected them from unpaid dues.
Says Mr Raj Nayak, Executive Vice-President, Star India, "We have always taken advance payments from Home Trade. In fact, this has been the policy for most channels dealing with their dotcom clients. In any case, we have not been doing any business with Home Trade for the past 6-8 months."
Affirms Mr Abraham Thomas, Head of Network Sales, Sony Entertainment Television, "Since we have had advance payments, Home Trade has no outstanding dues."
Home Trade's total spend on outdoor advertising till date is pegged at Rs 4.5 crore with the account resting with Primesite, a division of Mudra Advertising. Claims Mr Indrajit Sen, CEO, Primesite, "Last year, Home Trade had been one of our biggest clients. It still owes us a substantial amount. Our legal department is looking into it and we will use all available resources to recover our dues."
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