The Hindu Business Line : Is Indian advertising missing the BPO bus?

BUSINESS Process Outsourcing (BPO) is booming in India. In 2002, it was a half-a-billion dollar industry employing 35,000 people. The size has probably doubled by now. The ad industry's perception of BPO seems limited to call centres that work through the night to support inbound and outbound customer service in the Western markets. This limited perception is mainly responsible for Indian advertising industry's lack of awareness of and interest in the BPO opportunity.

India's vast pool of low-cost, educated, English-speaking talent is its competitive advantage. IT and Internet software have ensured that Indian staff can interact with global customers in real time.

Outsourcing became popular in the developed world for two reasons. Companies prefer to focus their attention on their core business and outsource everything else - so that they can build upon their core competencies. The second is cost saving, especially when it is possible to outsource to low-cost economies. When 1,000 routine banking jobs shift from US to India, the savings could be as high as $18 million a year. Pharmaceutical companies can save an estimated $200 million of their development cost for new drugs by outsourcing the service to India. That is about a fourth of the average development cost.

Other service sector companies, such as banks, insurance companies and durables manufacturers (for their CRM needs) have started using India as a BPO centre. Why not advertising?

Competitive advantages

The advertising industry in India has several competitive advantages:

India has a rich pool of strategic planning, creative and media services personnel. Indeed, Indian advertising industry has been exporting senior-level talent to many countries, particularly to the Gulf, South-East Asia, China, the UK and the US. Indian talent is recognised and respected in global agency networks.

No other country has access to so many trained management graduates who can provide strategic inputs for brand and media planning.

Indians are multicultural - we learn at least two languages and that gives us a head start in understanding cultural diversity.

Most of the top 20 agencies in India have a global partner or owner which should provide an immediate link to global markets.

Our production standards in TV and print have improved. With a vibrant animation software industry, we have access to this area of TV production.

India's advanced IT capabilities can be used to develop Web-based communication packages for global clients.

Enabling industry trends

Some key structural changes in the communications industry should facilitate creation of a BPO market in India:

Global migration to fee-based compensation intrinsically supports BPO. Fee-based compensation is based on cost of manpower and the related overheads; India can have an advantage in both these areas.

Large multinational clients prefer regional advertising development to local ad development. India could become a global centre for Asia and West Asia, or even the rest of the world.

Advances in IT make Web-based sharing and transfer of large audio visual files easier. It is possible to produce a film and share it in real time with clients in another country via the Internet.

Many Indian TV ads are already being shot in other countries such as South Africa, Australia, Malaysia and Europe. This has enabled good contacts among the film producer community.

Media planning and buying businesses are IT-dependent. Global data input and processing could shift to India and save millions for customers.

Through-the-line businesses such as direct marketing and CRM are also getting IT- and Web-focused. This is another BPO opportunity.

There are two broad avenues one can explore in the BPO space: Outsourcing of routine processes and outsourcing intellectual property (IP) development.

In routine processes, these could be some immediate opportunities: Media billing processes, online media buying, coding open-ended questions in market research (MR), transcript of MR group discussions and indepth interviews, printing brochures and posters, electronic processing of material for publication, tele-cine and editing of TV commercials, direct marketing (DM) database management, data entry for DM lists

IP development could look at areas of development of marketing, communication and media strategies, campaign development, TV commercials' production, still photography, development of consumer behaviour models, design (packaging and corporate identities), development and management of brand health track models, Web-based communication packages, mobile telephone-based communication packages.

Though we have to develop expertise and width of talent in some areas, the important thing is that a pool of talent is available in India, ready to be tapped.

The question really is how do we start?

MNC agencies in India could start with mooting the proposal with their global counterparts. This process has already been initiated for a few multinational clients, though the preferred route seems to be transfer of personnel to other locations. The industry will benefit only when staff in India create ideas or services that are exported. To credibly sell the concept an independent infrastructure may need to be built - with separate staff from those who service local businesses.

Today, BPO in IT-enabled services is soaring because the industry has an established track record. Brand India has been built through early body exports and lately by organised efforts of industry bodies like Assocham. It is probably necessary to form a body that will sell the image of India as a "centre of excellence in advertising and communication" to the world. Participating agencies and related service providers could fund it.

The Indian ad industry could double its size in three years if we embrace this opportunity. However, it needs industry-coordinated effort - no single agency, by itself, can grab the opportunity. Are we ready for it?

(The author is President & Chief Operating Officer, Lowe India.)

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Marketing is NOT strategy

The year the penny dropped

Leadership is branding

An eminently forgettable year

India Shining to Sensex Climbing

Is Indian advertising missing the BPO bus?

The two-in-one nation!

It happened this Brand Year