The Hindu Business Line : `Rules of the Agency game have changed '

More difficult than starting an enterprise is actually winding it down painlessly. But, Ramesh Narayan, founder of the Mumbai-based Canco Advertising, which had billings of Rs 25 crore in the last fiscal, has managed to do that. He recently surprised the industry by announcing his decision to bid au revoir to the advertising industry after a 23-year career. Narayan has been active in the industry, having been President of the Advertising Agencies Association of India and the Advertising Club Bombay. He was also a council member of the Audit Bureau of Circulation (ABC) and a managing committee member of the National Readership Survey Council (NRSC), International Advertising Association (India Chapter). He was India's representative on the Asian Federation of Advertising Associations (AFAA) and the Chairman of the Planning Committee of the AdAsia 2003.

As Narayan says, he had promised himself that at the age of 50 he would introspect on his professional life and having just turned 50, he decided to call it quits to pursue other interests, especially writing, his first love. As he explains, he ran Canco in a principled and professional way and he felt rather than selling it, he chose to wind it down. The process took over two months where he talked to several blue chip key clients with whom he was associated for years such as HDFC, ONGC, Union Bank and BPCL. While appreciative of his plans, all clients cleared all dues to Canco well in advance, a measure, he says, of the trust they reposed in him. He also took the unusual step of guiding his 50-odd staff members to new jobs in the industry as well as in corporates outside the ad agency business. In an interview to Vinay Kamath of The New Manager, Narayan, also a regular columnist for the Business Line's Brand Line section, talks of his long career in advertising and the winding down of Canco. Excerpts:

How did you choose to come into the agency business?

I was always interested in writing. I had trained as a reporter in a leading national daily and then in 1982, after successfully completing an international assignment I was offered a job by the newspaper. My father, who was in the publishing business, objected strenuously. I then thought of advertising, because I thought I could write and earn an honest buck.

You came into the industry 23 years ago. How did you build up your agency?

I think the answer is to look for opportunities where others do not. In those days the public sector was considered dowdy and not at all sexy. I saw a huge potential. We started handling accounts like MTNL and Union Bank long before these sectors exploded. Today every big agency is pitching for such accounts.

How is it that a medium-sized agency only handled large accounts?

I believe large clients liked to feel that the key people in an agency are always available for them. We shared our clients with many large agencies but always on equal terms.

What do you feel has changed in the industry over these years?

Well, everything has changed. On the positive side, our creative talent and the depth of our human resources is being appreciated globally. Indians are occupying key positions all over the world.

On the other hand, unlike in IT and auto ancillaries, Indian companies have not been able to really hold their own in the advertising business. I call the last 10 years the return of the East India Company. And Indian agency heads rolled over and gave up without a semblance of a fight.

So why didn't you follow the trend and get an international affiliation?

Those who know me know that I wear my nationalism on my sleeve. I preferred to be the head of a swadeshi agency rather than be country manager (by whatever name called) of a videshi agency. And in any case, I did not agree with a lot of things that have happened structurally in the agency business.

What structural changes are you referring to?

Unbundling was just implemented in India. I doubt most of the big agency heads had any say in the matter. I am not sure if the creative or brand agencies are very comfortable with the present situation but again, they have to accept. Also, size does matter nowadays. Media buying has changed the rules of the game completely. As margins are squeezed by advertisers, traders in space and time are in turn squeezing the media. No one is entirely happy with the situation.

So why did you decide to bid au revoir?

The rules of the game have changed completely. I had run my agency as a model agency in the eyes of the clients and the INS. And I ran it profitably. However, I felt that very soon I would either have to change, or get left behind. I am too stubborn to change, so I decided to opt out.

Are you saying that there is not much scope for a medium-sized agency?

Not at all. However, medium-sized agencies must re-work their strategy. I believe there is a lot of growth that will come from the SME sector. There are a hundred Narayana Murthy's waiting to happen in smaller cities and towns. The big agencies will typically wait for them to grow and come to them. These people could greatly benefit from the inputs of a professionally run medium-sized agency. Also, there is a lot of scope in areas like PR, MR, event management and on-ground promotion.

What is your advice for the youngsters wanting to come into the advertising industry?

This is a knowledge industry. Equip yourself with as much knowledge as you can. Also do not hesitate to tell it as you think it is. You have to be perceived as a thinking individual not someone who merely executes plans.

What is this painless exit you staged, that people have been talking about?

Well, painless in a relative sense. As soon as I decided to opt out, I talked it over with key people in the Agency.

They respected my views. I then resigned all our accounts ensuring that the transition was very smooth. We then sat as a team and guided the staff to their new jobs. Only after this did I announce that I would be closing Canco. Yet, there is always personal pain in letting go of clients after long periods in time and even more in letting go of staff who have been with you for so many years.

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