The Indian advertising business and ad agencies have been facing severe headwinds over the last decade. While GDP growth and aggressive postures by VC funded start-ups has kept the ad dollars flowing, the underlying current is changing at unprecedented levels.
For example, there has been a major fragmentation of audiences; it is no longer enough to throw money at television. There has been a rise of specialist agencies to the extent that at one time there were even agencies that only handled the Twitter handle of a brand. While small nimble start-ups are nibbling at the edges, big consultants are muscling their way in. These consulting companies come with serious CXO-level connect and are able to add on consumer insight mining and even ad strategy development to their portfolio of services. Add to these headwinds, there is a growing pressure on reduction of margins; the commission system is dead and even the fee system is getting tweaked downwards at regular intervals. War on talent is intense since new age companies find it easy to raid ad agencies for marketing communication talent.
Low involvement product advertising
Prof John Philip Jones and Mary Baumgartner’s new book Advertising at the Crossroads builds its argument not on the above points I have raised but on something very interesting. How Indian advertising and ad agencies have been used to making their money from low involvement product advertising till now; this is going to change as high involvement products rise in importance.
The low involvement / high involvement debate was set off by a seminal article by Robert Vaughn in the Journal of Advertising Research [How Advertising Works – A Planning Model; 1980]. In the article he presented what became known as the FCB Grid; it categorised products into a two-by-two matrix: High/Low Involvement; Think/Feel. Products like automobiles that needed thinking and were high involvement went into the first quadrant. Products like candy bars that were feeling oriented and were low involvement went into the fourth quadrant. Many researches have since then shown that consumers receive ad messages for high involvement and low involvement products differently.
It is here that Prof Jones’ book builds its argument that the era of ‘Ads searching for consumer’ [low involvement paradigm] is going to give way to ‘Consumers searching for information [high involvement paradigm]. Prof Jones presents an argument that Indian advertising has been dominated by FMCG products like soaps and shampoos which needed one type of advertising thinking. The rise of high involvement products like automobiles, financial services products is going to drive a new agenda.
The book, through its various chapters, traces the growth of advertising as a global force. Prof Jones also touches upon some of the topics on which he has written books on: advertising elasticity, pricing elasticity, double jeopardy that favours big brands. For those readers who are yet to read his many books, this book gives a nice quick tour of some of his seminal research findings. Prof Jones understands India and has been to India numerous times; he was also a keynote speaker at the AAAI’s Goafest a few years ago.
So, in this book he has focused on some key recommendations for the Indian ad agency business. He has pointed towards five long term problems that all agencies and clients have to face: the large number of ineffective campaigns; the pressure on advertising budgets; the uncertain future of international advertising campaigns; broadcast and narrowcast – the dilemma of media planning; and brand advertising, direct advertising and agency culture.
The last chapter of the book is dedicated to views by Indian advertising veterans and what they see as the post-pandemic era of Indian advertising. Full disclosure: I was also sought out for my views on the future of the ad business.
The book is an engaging read for anyone interested in getting a quick tour of the advertising/ad agency business, how it evolved, how global agencies ended up dominating the ad business [there is a chapter on the rise of JWT, the agency where Prof Jones spent the first part of his long career]. The book then segues into the new challenges that advertising is set to face and what agencies need to do to be ready to face the ‘high involvement’ future facing them.
(Ambi Parameswaran is an ad industry veteran and author of Nawabs Nudes Noodles – India Through Fifty Years of Advertising).
Book Review: Advertising at the Crossroads by John Philip Jones and Mary Baumgartner Jones
Published: Westland Business
Price: Rs 410