Sam Balsara, Chairman, Madison World has designed a blueprint for agencies to traverse through this uncertainty and come out of this pit of quicksand called pandemic at AgencyCon 2020.
Sam Balsara covers the current state of the Indian economy and the A&M industry, what can brands and agencies do during this time, the '13 Immutable Laws Of Madison', and more of such significant topics that will help agencies navigate through.
The State Of Indian Economy & Advertising Industry
If the world only buys what they need and not what they desire, the global economy will collapse - Unknown
Sam Balsara got down to business by quoting this thought. All of us are currently buying only what we need and not what we desire. The lockdown in India has been more severe than most of the world. He says, probably that's why our economy has been affected more than the rest.
The Food Industry has dropped by 50-60%, Toiletries are at 30-40%, the impact on the Advertising & Marketing Industry, "Too put it mildly, has been severe". He estimates the AdEx collapse to be as much as 75-85%.
In his professional life of 48 years, never has Sam Balsara seen a situation like this and the estimates are not very encouraging. Digital has been growing by an average of 30% for the last ten years, now projected to grow only marginally.
Economic Recovery will take about six to twenty-four months depending on the lens you see it from. Sam Balsara says the stimulus package introduced by the Finance Minister Of India might not exactly help stimulate.
He says, "I can't agree with Finance Minister who says 'We have done a lot to stimulate demand'. One of the recommendations made to her is 'amortization of ad spends'. If she were to accept, it would go a long way to stimulate demand".
However, he believes the Government has taken the advantage to bring in a few good reforms, but it is unlikely to help us recover fast.
He sees changes brought in to the APMC, might give more remunerative prices to the farmers, and may help rural areas prosper, and consequently help digital audiences grow in rural areas.
What should brands do at a time like this?
- Remain authentic
- Don't take advantage of the vulnerabilities stemming from the pandemic
- Finding ways and means of staying alive in consumers' minds is critically important. Stronger brands recover in the market much faster than the weak brands. But all brands, strong or weak, should not abandon their presence
- Social Media and Influencer Marketing should be leveraged
- Big ideas can work better than big budgets
- Companies will be hard-pressed when it comes to cash but brands should find their own ways to advertise, and agencies should help
For instance, one brand that stands out for Sam Balsara during this period is Asian Paints, with their re-initiated campaign - Har Ghar Kuch Kehta Hai. That is not taking advantage of the pandemic, but taking advantage of consumers sitting at home.
He quotes Amit Singhal saying, it is easier to cut marketing spends and saying we will come back when the market bounces back but brand building is not so simple. Committing to building a brand is a 360-degree approach, and holding it through this difficult time.
As agencies this is what our advice should be for brands, and how can we innovatively help brands. "Yes we are capable of innovative ideas, endear consumers and our brands".
What should agencies do at a time like this?
- Go to your clients with big innovative ideas, clients will appreciate you, make them understand they will benefit from this, and in turn you will also benefit from this in the long term
- Agencies should not go with ideas that cost the wallet substantially
- Agencies and brands should be transparent all the way. If at all budgets can be allocated. Agencies can plan a restricted budget, incorporate media partners and make an interesting package
- We need to be transparent with our employees. We need to not camouflage what the financial situation is, as strongest of the agencies could soon go through financial stress.
- Conserve cash. Freeze on hiring, discretionary expenses, and capital expenditure. At a time like this 'Cash is king'
- We can't be an ostrich and hide our face in the sand like nothing is wrong.
- Hope for the best, plan for the worst. Take active steps to plan for the worst and conserve cash & resources
- Nobody knows how soon advertising will recover, but Sam Balsara says we should recover by Diwali, around the festive season
We are caught in a downward spiral, advertisers are not advertising, we should aim for an upward spiral. Because of which demand is spurred, sales shoot, companies have cash, and they advertise with the cash they have, and the cycle goes on.
Sam Balsara also shares a few laws from the '13 Immutable Laws Of Madison' which was curated by his daughter Lara Balsara. He says you don't have to necessarily follow them, but "We have followed it and survived for 32 years".
13 Immutable Laws Of Madison
Law Of Focus
Madison attained a lot of proposals from real estate, durables, education, and a lot of other sectors but they stayed focussed and not allowed themselves to detract to other businesses, and stay true to communication.
"We have steadfastly stayed away from unnecessary interventions, and said we want to make this our focus".
Law Of Specialization
After the early success he had, Sam Balsara learned specialization is good for communication, specialization makes you an expert in the narrow field, and repeatedly doing something and develops the technology to do it efficiently. He also adds an important bit, clients recognize experts, and for this reason, you are able to quote a competitive price.
Law Of Disadvantage
Know and recognize if you are at a disadvantage, or have limited resources, and therefore you have to work harder and work smarter.
With a big budget, you can make a dumb idea work but with small budgets, you need big ideas to make it impactful.
Law Of Patience
Patience is not the virtue of the current generation. Everybody is in a hurry to become the next Ambani. It's good to aim for the stars but it's important to have a reality check to set objectives for yourself
Law Of Longtail
He shares, "I was a little vain, in the media business(initially), and said we will only accept bluest of blue-chip clients, who have the scale of operation to appreciate".
But he says he later realized, to make a business successful and sustainable you need all sorts of clients, large, medium, and small. It will widen your skillset. Also, the larger the client the more demanding they are and it is more difficult to make money out of them.
Law Of Change
Routinely every few years you need to bring about change. Evolve naturally, but if it doesn't happen naturally, then bring about that change yourself and develop with time.
How to get payments from clients?
Sam Balsara says we need to recognize our clients are going through a tough time too, so we have to appeal and highlight that the payments are required for our survival and it will also help them, and we need to be reasonable.
But if some clients are trying to take advantage of this situation, and delaying payments, they should be called out.
The Key Takeaway from Sam Balsara's session is that the A&M Industry is neck-deep in this pit of quicksand called 'pandemic'. But we can lose the excess weight called unnecessary expenses, keep our head high & hope for the best, while also staying prepared for the worst, as we steadily float with innovation, and just with a helping hand from our brands, we can come out of this pit stronger.
You can view the full session here.