The Hindu Business Line : Not just second-best

CLOSE on the heels of re-launching RMG David as David last year, O&M decided to launch yet another full-service start-up Indian agency, Meridian, in the country. While O&M had been toying with the idea of launching an agency to cater to smaller clients and Meridian may be expected to fulfil that need, a broader trend is emerging wherein most agencies are either reviving their second agencies or launching new ones to keep pace with the growing market.

According to Piyush Pandey, Chairman and National Creative Director, O&M, "The market is in good shape and with new entrants there are opportunities for business. Besides, clients now have different needs."

Piyush Pandey, Chairman & National Creative Director, O&M

The advertising industry has kept pace with the healthy growth of the Indian economy. Market dynamics are changing, and agencies created in the new age will adapt more readily and naturally to the newer needs of marketers. This is why the company believes the time was right to launch a new agency, feel industry experts.

Apart from just tackling client conflicts, this time the business model for each agency is varying. Tapping into new and existing markets with new brands, agencies are also trying to segregate the business by type. Take the case of the Mudra Group, which decided to float a third agency, Canvas Communications, to support its multinational brands. (Interact Vision is the group's second agency.) The fact that its joint venture partner DDB decided to align its Johnson & Johnson business to its Indian partner made Mudra float a separate agency just to cater to its new MNC client.

Madhukar Kamath, MD & CEO, Mudra

Explaining the need to float a new agency, Madhukar Kamath, Managing Director and Chief Executive Officer, Mudra, says, "We wanted the J&J business to be managed by a dedicated team which was housed separately and operated as an independent unit within the Mudra group. Canvas is a good opportunity to do that."

The J&J skincare brands that Canvas will look after are Neutrogena and Clean & Clear. Internationally, they are with the DDB network. The newly appointed creative advisor and head for the J&J account, Mudra Group, Geeta Rao, adds, "There may be more high-end brands which Mudra might bring into this agency. There is resurgence in the advertising business; it is viable to set up more agencies with different business models."

Agencies are also taking the trouble to bring out new tools and identities to create a new image to distinguish themselves from their parent agencies. For instance, instead of re-launching its agency, Contract, the JWT-promoted agency, recently decided to unveil a new vision with the help of a new proprietary tool - Unboxing. "Contract believes the only way for brands to last forever is for them to constantly grow young," says Ravi Deshpande, Chief Creative Officer, Contract Advertising. Last year, Everest, the DY&R agency, came out of big brother Rediffusion's shadow with a new corporate identity and brand philosophy and re-christened itself Everest Brand Solutions. The new corporate identity is about `idea leaders, idea initiators and idea managers.' Says Aniruddha Banerjee, Chief Operating Officer, Everest Brand Solutions, "We are revamping our entire organisation to align with the way we arrive at solutions. What works far better are cross-functional teams working at what they do best. Even our new office and the personalised logo for every employee reflects the freedom and openness that is integral to it."

Ravi Deshpande, Chief Creative Officer, Contract Advertising

While O&M is busy unleashing new brands, JWT has decided to follow a similar route. It is repositioning its brand for financial services, Fortune, as a full-service agency. Set up as a specialist agency in the early '90s, Fortune had limited its business to handling public issues of its clients for the past 15 years. Today, Fortune is poised for a re-launch as a full-fledged mainline agency.

Colvyn J. Harris, CEO, JWT India

Colvyn J. Harris, CEO, JWT India, says, "We have decided to broadbase the functioning of our financial services agency, Fortune. There is no need to bring in another agency brand when Fortune already exists."

Fortune has offices in Mumbai and Chennai with almost 20 employees in its fold. The JWT-owned agency will now extend its services as a full-service agency brand to handle both financial and non-financial clients.

Adds Suranjan Das, Vice-President & Client Services Director, JWT, "Fortune was floated as an agency in the heyday of IPO advertising. But now we want it to become a full-services ideas business. In fact, most financial clients now want to position themselves as brands and create an identity for themselves."

Catering to regional markets is yet another aspect to agencies beefing up their operations with more brands. For instance, O&M has floated Dakshin just to cater to clients based in Mumbai who want to explore or tap into the Southern markets. Says Piyush Pandey, "Dakshin is expected to be a variant and an extension of O&M and only deals with the South Indian markets unlike Meridian which is a full-service agency."

Giving a new personality and hue to the new agency brands, it's all about catering to different client needs. RMG David was set up nearly six years ago as O&M's additional agency but today its equations with its sibling are on a different plane. "RMG David was set to provide a different communication solution to clients. At that time the management at O&M felt the need for an agency which would service the needs of clients differently. Clients needed a different kind of agency, possibly a leaner one than O&M. There were such clients that O&M could not take on and to avoid such conflicts RMG David was set up in India," explains Kumar Subramaniam, President, David. But today, the David brand is being treated differently from its big brother O&M. "David is a different agency with a new philosophy. Its approach to its clients will be different from that of Ogilvy. Being a smaller agency, it is nimble and agile, which will allow the creative process to flow easily between the people and functions within the agency. The agency is one which gives non-conventional media ideas,'' claims Subramaniam.

There is also a different level of service being provided by the smaller, leaner agencies. Observes Nirvik Singh, Managing Director, Grey Worldwide, "Some clients are better off with smaller agencies as they realise that the bigger agencies cannot give them the same level of involvement." Says Suranjan Das of JWT, who is tipped to takeover as GM at Fortune Communications, "Fortune is a smaller agency and is meant for clients who are not comfortable working with the big agency brands."

Nitish Banerjee, MD, Orchard Advertising

The second agencies are mostly challenger brands. Says Nitish Banerjee, Managing Director, Orchard Advertising, "While Leo Burnett is already a well-established agency in the market, we are a challenger brand. The challenge is to give compellingly different solutions to create discontinuous growth in the client's business."

Rarely have second agency brands succeeded in creating a niche for themselves, though. Observes the JWT veteran and now CMD of the newly set up M&C Saatchi, Kamal Oberoi, "Except Contract, there has been no Indian second agency able to carve a niche for itself. It is difficult and is all about having the right mindset and control. Unless the parent agency wholly divests itself from the operations, its sibling will end up being a clone."

In spite of setting up two agency brands from Japan in the country (Dentsu Communications and Dentsu Marcom), Sandeep Goyal, Chairman, Dentsu India, says, "It's my belief that there is no second agency but just a second-class agency. All second agencies are plagued by the fact that they are all hand-me-down agencies. Even in the case of Contract, it took 25 years for it to become a mainstream agency brand."

Sandeep Goyal, Chairman, Dentsu India

All the same, second-rung agencies are in the reckoning and the fact remains that there is demand for a leaner agency to cater to smaller clients. "There is a gap in the market for a few good, small agencies which can be free-spirited and more adventurous," says John Goodman, CEO, O&M.

John Goodman, CEO, O&M

In fact, the creation of such agencies gives a safety net to those agencies which want to retain their creative talent and cater to those employees looking at different opportunities to present their talent, which a bigger agency may not be able to allow.

"The new agency can help in keeping the creative talent within the family. We can give an opportunity for creative talent, especially those who want to experiment, without them having to leave the agency to have their own start-ups," adds Goodman.

On the upside, second agencies have suddenly got a new lease of life. Catering to a market with different needs, which is possibly not the forte of the bigger agencies, should ensure the second agency brands remain in business, at least till the ad industry continues with its double-digit growth.