Squeezing Out the Sweet Spot
Published in Nov-Dec 2021
In our cover story, The Great Covid-19 Reboot, published at the end of 2020, we concluded that “hard times are ahead and businesses and agencies will have to make difficult decisions across multiple fronts. For agencies, the springboard to success will include the ability to quickly evolve and most importantly, diversify their services to meet their clients’ changing expectations.”
A year on, the media spend has recovered across several platforms (and is expected to improve further in 2022). However, looking at the picture more closely, it appears that in overall terms, matters remain pretty much the same. Client expectations from their agencies continue unabated, but with more controlled budgets and a larger role played by their procurement departments. As marketing budgets continue to be squeezed, procurement is more likely than not to be calling the shots, leading inevitably to a potentially more fractious client-agency relationship.
Keeping this in mind, Aurora polled Pakistan’s agency and corporate heads on the three developments most likely to colour their mutual relationship next year; the influence of client procurement on their ability to deliver/buy quality, adapting to changing revenue models, and the emergence of alternative creative resources outside the purview of the creative agency. Here are some of the highlights.
Point: Sara Koraishy, CEO, JWT Grey – “Procurement is the death of creativity. When procurement tries to get X creative solution at the same (or ideally less) cost of Y, they effectively take away all the experience or the USP of the individuals or the company.”
Counterpoint: Uzma Khan, Head of Media, Unilever Pakistan – “The goal for agency and client media specialist teams is to optimise performance within a stipulated budget. Nevertheless, when business-critical spends are outside this budget, we are open to a discussion with our agency partners.
Point: Umair Kazi, Partner, Ishtehari – “This is the age of disruption, so no excuses apply. To paraphrase Morpheus, I think the rules can be bent if you are the one. If Wasim Akram can charge an arbitrary amount, so can we.”
Counterpoint: Faisal Rana, Head of Communications and Marketing Services, Nestlé Pakistan – “Budgets are never a substitute for creativity. Budget constraints contribute to boosting creativity... This invariably helps boost creativity and deliver better results.”
Point: Adeeba Khan, Chief Creative and Strategy Officer, Manhattan Communications – “Holding pitches with 20 agencies and indiscriminately using their ideas, with slight changes here and there and without compensation, is financially ruining the creative agencies.
Counterpoint: Taimur Tajik, Creative Head, Interwood – “Times are tough for everyone. Businesses that wish to survive must adapt. Agencies are no different. True ‘creative’ agencies will make cost-effectiveness a part of their thinking. There is no other option.”
Point: Aamir Ali Khwaja, Group COO, MullenLowe Rauf Group – “The procurement department’s mandate is to ensure fair play, transparency and deliver cost efficiencies. Our mandate is to create outstanding creativity. More often than not, the mandates collide and the intangibles we, as creative professionals, deem important: ‘quality’, the best team to meet a particular brief and the overall ‘creative vision’ are often compromised.
Counterpoint: Rizwan Fazal, Head of Marketing, Jazz – “Irrespective of budgets, the client’s basic need remains the same; connect with the consumer through brand or tactical effective messaging. The role of the procurement department is to get the most competitive rates without compromising the quality.”
BUDGET SQUEEZE AND AGENCY REMUNERATION
Point: Sidra Salman, Creative Director, Synergy Group – “We have stopped indulging clients in the habit of calling pitches for every project. We have done enough work in the last few years and it speaks for our creative and strategic acumen. We don’t have to do theatrics every week in every boardroom of the city to prove that ‘Oh, we are so creative.’”
Counterpoint: Mohsin Sadiq, Head of Marketing, Amreli Steels – “Local agencies need to revisit their business model. There are trends towards in-house design teams, freelance content writers, independent producers and in-house specialist concept teams, while the big-ticket creative work is outsourced to international agencies.”
Point: Nida Haider, Head of Brand Strategy, IAL Saatchi & Saatchi – “Smart agencies are using this pandemic to learn new ways of communicating to their consumer and basing their messages on the simple insight that people need to be reassured and supported at this time, not sold to.”
Counterpoint: Shehnaz Basit, Chief Operating Officer, Gul Ahmed – “Agencies should evolve from being creative partners to becoming business partners. Their compensation model could be retainer + incentive, whereby agencies will receive a fixed amount plus incentives based on results.
Point: Shahnoor Ahmed, Chairman & CEO, Spectrum VMLY&R – “We will continue to follow SOPS and they are: Evaluate SOW. Negotiate with procurement to bag assignments at the best cost possible. Engage the right kind of resources from within. Crack the brief. Get it right the first time.”
Humayun Farooq, Marketing Director, Reckitt – “The agency compensation model should not be overhauled. The retainer model may work for some brands and others may be better suited to a commission-based model. The responsibility for the optimum mix should be a collective decision; this would help ensure a better output and expand the ownership of the idea to all parties involved.
Point: Ahmed Jamal Mir, MD, Prestige Communications – “We take a long-term view and concentrate more on quality and strategic inputs. We do not rely on cosmetic changes or ad-hoc inputs. We continue to value brand building and engage and encourage our partners and clients to take a holistic view.
Counterpoint: Khurram Koraishy, Chief Commercial Officer, Alkaram Studio – “The advertising industry needs a guild model (for example, the Screen Actors Guild) which sets minimum remuneration guidelines and can enforce them within its membership. Reform must come from within. A model that covers costs and is then rewarded based on results is my two cents worth in this respect.
ENCROACHING THE CREATIVE SPACE
Point: Faraz Maqsood Hamidi, CE & CD, The D’Hamidi Partnership – “Encroachment? The creative spirit has many avatars and multiple streams of specialisation. We should welcome diversity and friction and opposition and all things non-traditional. It leads to a stronger community of creatives and a more robust creative industry.
Counterpoint: Rizwan Fazal, Head of Marketing, Jazz – “This is a positive development for the entire industry. I would not call it encroachment; rather, a healthy competition that encourages everyone to think differently and better.”
Point: Seema Jaffer, CEO Bond Advertising & Digital – “Change is inevitable. We need to accept and embrace it. Agencies need to be leaner and more agile. We need to combine the offering of a full-service agency with the adaptive quality of a nimble creative agency. We need to be tech-driven and ride the trend. Hello, brave new world.
Counterpoint: Narmeen Khan, Managing Director, Mondelez Pakistan – “Traditional creative agencies lost the plot when they stopped keeping up with technology, especially digital media. As a result, advertisers had to look elsewhere to bridge this vacuum and this is where hybrid/media agency partners, with a focus on digital expertise, started to lead the creative approach for digital. For traditional creative houses, this may not be a positive development, but for the industry, it is a step in the right direction until our creative partners can deliver.”
Point: Numan Nabi Ahmed, CEO, The Brand Partnership – “This encroachment is a knee-jerk reaction. All stakeholders simply started the cut and paste job of adapting (emulating) international practices without any planning on how to adapt to these or efficiently manage them for higher ROI. Hence, it has created many problems.”
Counterpoint: Aziz Jindani, Chief Commercial Officer, Colgate-Palmolive – “This is a healthy trend. Creativity has been democratised everywhere, so why not in advertising? This broadening of the competitive landscape has motivated the ‘traditional’ agencies to reinvent themselves. As clients, we have more options too. A win-win situation.”
Point: Muzaffar Manghi, CEO, Manghi Communication Solutions – “It’s fantastic for us. Non-traditional set-ups have helped change the narrative around what an agency is and how many people, boardroom chairs, huddle rooms and sprawling square footage is needed to get good work and a good price.
Counterpoint: Dr Zeelaf Munir, Managing Director & CEO, EBM – “I think it is positive in the sense that it allows an inflow of more ideas and creative thought. I don’t see this as an encroachment. The creative industry is open to everyone who can bring in their magic and ideas to life.”
All in all, 73 agency and corporate heads were polled – 40 agency and 33 corporates – and although their answers differ according to their function and perspective, what emerges is the acknowledgement of the interdependence that lies at the foundation of the agency-client relationship, and that accommodation at both ends of the spectrum is the way forward.
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