Having worked at a Media Agency (albeit in the strategic marketing consultancy division) I have come across brands and managers who are spending ~Rs 20,000 crores annually. Just merely looking at the managers responsible for this kind of money spends, I get extremely disappointed with the quality of people, which is very very poor.
Most companies have their best people working on increasing their revenues and thus driving the toplines; but considering the huge amount of money being spent on marketing and advertising, it would be prudent for them to assign better managers on this side of the business as well. Even a 2-5% savings would cause a huge difference to their P&L account, and hence their Operating margins.
Just being a fence sitter, and silent listener to the kind of conversations which go around between the brands and the agencies, I can point out at least 20 areas every month where a brand can optimize their spends and save huge $$. And the only reason why I haven't been proactive in giving suggestions on how to plug these gaps is the fact that these agencies have got a dominating culture of bureaucracy because of which they tend to get very defensive whenever someone tries to toe their line. They just want to protect their turf and play on the 2.5-3% margins on these spends and continue making these monies, without trying to even think of optimization. The only new thoughts which come into consideration are wherein they suggest new media and new ways of spends to reach consumers at a different time/place/manner, but no one is spending any time/effort in understanding and plugging the leakages in the system which according to my very very rough estimates itself can account for 5-10% of savings on the campaign budgets, leading to a 0.5-1% impact on the overall bottomline, considering that brands typically account for 8-10% of revenue as marketing budgets.
So why the rant? Well, we have developed a new product internally within the media agency which helps in plugging these exact gaps, and brands are also receptive to this product, however, the major roadblock is the agencies themselves, besides certain legacy brands not having the vision of differentiation between a brand health track kind of a study from a campaign effectiveness study.
Some day, things will change. Some day, people will become smarter. Some day, the gaps will be plugged.
Till then... "Client is always the boss, and Agency is always the ass-licker"
Most companies have their best people working on increasing their revenues and thus driving the toplines; but considering the huge amount of money being spent on marketing and advertising, it would be prudent for them to assign better managers on this side of the business as well. Even a 2-5% savings would cause a huge difference to their P&L account, and hence their Operating margins.
Just being a fence sitter, and silent listener to the kind of conversations which go around between the brands and the agencies, I can point out at least 20 areas every month where a brand can optimize their spends and save huge $$. And the only reason why I haven't been proactive in giving suggestions on how to plug these gaps is the fact that these agencies have got a dominating culture of bureaucracy because of which they tend to get very defensive whenever someone tries to toe their line. They just want to protect their turf and play on the 2.5-3% margins on these spends and continue making these monies, without trying to even think of optimization. The only new thoughts which come into consideration are wherein they suggest new media and new ways of spends to reach consumers at a different time/place/manner, but no one is spending any time/effort in understanding and plugging the leakages in the system which according to my very very rough estimates itself can account for 5-10% of savings on the campaign budgets, leading to a 0.5-1% impact on the overall bottomline, considering that brands typically account for 8-10% of revenue as marketing budgets.
So why the rant? Well, we have developed a new product internally within the media agency which helps in plugging these exact gaps, and brands are also receptive to this product, however, the major roadblock is the agencies themselves, besides certain legacy brands not having the vision of differentiation between a brand health track kind of a study from a campaign effectiveness study.
Some day, things will change. Some day, people will become smarter. Some day, the gaps will be plugged.
Till then... "Client is always the boss, and Agency is always the ass-licker"
