ADVERTISING

THE WORLD OF ADVERTISING BUSINESS

By M.K.AREOLA
Sep 08 - 14, 1997

The advertising business in the country is as old as the nation itself, though it was very much there before partition also, but the changes it has undergone during the past ten years has made more impact than the remaining forty years put together.

Pakistan was known to be a 'sellers' market until about a decade ago, therefore the manufacturers did not have any marketing problem to worry about. The term 'sales' was more in use than 'marketing' and since a seller's market guarantees total sales of whatever is produced, the manufacturers were in relaxed atmosphere and did little as far as marketing is concerned.

Advertisement today has developed from the traditional writings on the wall or billboard carried by donkey followed by drum-beating lads that paraded round the streets to the emergence of modern tri-vision.

THE PHASES

According to analysts, advertising business in the country has undergone three phases during the past fifty years of its existence. The first phase was the period upto the sixties, when the foreign advertising agencies were functioning very well in the country famous among them in those days were Lintas, known then as Lever's International Advertising Service, D.J. Keymers and the representatives of Walter Thompson .

The second phase came when the industry which was still in its development took a downward trend with the government's ban on the repatriation of foreign exchange which forced most of those foreign agencies that were operating the country to pack up.

RETURN OF THE FOREIGNERS

The third era of the advertising starts with the return of the foreign ad agencies to the country in the form of affiliations with the locals.

This was made possible by the coming of the manufacturers of consumer products and other multinational companies who usually employ advertising agencies with a chain of representatives worldwide, such companies include ICI, Reckitt & Colman, Shell, Pepsi, Caltex, Unilevers, Coca Cola etc.

This period has witnessed changes in the local products and the arrival of innovative and imaginative new products to compete with the same locals, which left the latter no alternative but to turn to advertisement for survival.

Many of these products are introduced during the eighties when the foreign employment was booming with lots of locals going out for work in places like Middle East where there was no locally produced consumer items but were all imported from various markets around the world.

These foreign companies employ an ad agency with foreign affiliation so that they could globalize their advertising concept. A single advertisement could be used worldwide with its adaptation to the local tune and using local models. Lux toilet soap is one of the few examples of such product whereby a single concept is translated into various languages to suit the local cultures.

This period also witness the entrance of business graduates into the industry as well as those who have gone outside the country for specialization in the various fields of the industry and are now returning home to take up jobs in their respective fields.

This third era also witnessed an increased number of foreign affiliations in the industry. For some it was a necessity for them to be able to maintain their previous accounts while for others the affiliation provided new business form the foreign affiliated companies.

All the companies of JWT abroad which were being handled by R-Lintas locally left and joined Asiatic Advertising because of the latter's affiliation with JWT internationally. Likewise, Coke left Paragon of Lahore to join Orient when the latter got affiliated with McCann Erickson. Some accounts of Lever Bros. in Pakistan were taken from R-Lintas and divided between Asiatic and Interflow because of their association with foreign companies.

One of the advantages of having foreign affiliation according to one of the agencies, is the exchange of information and training facilities which was then made available and compulsory for the local personnel.

As mentioned earlier, the MNCs operating locally have been able to bring their advertising agencies to the country in affiliation with various local agencies, this step now ensures access to a databank, an important tool for developing research and development which would otherwise have been non-existence.

And as far as research and development is concerned, like any other industry in the country, the ad industry had little or no contribution at all and all the MNCs could do was to bank on the data available to them from their principals which was treated with utmost secrecy until the arrival of these foreign affiliations. They introduced research and survey work in the consumer market such that the area has became widely open to users .

CLIENT / CREATIVE

Until the advent of the third phase of the advertising industry, there were little or no professionals to man the client service area of the ad industry. The third phase, however, witnessed the entrance of trained business professionals.

People with professional training from outside the country, also returned to man the creative department of the industry, these people include children of ad agency owners who were sent out for the same. Thus we saw the development of the creative aspect of the industry, which is often regarded as its backbone.

Masood Hashmi of Orient Advertisers, said to be the largest ad agency in the country in terms of turnover, and the local affiliate of McCann-Erickson, introduced the adaptation of foreign ideas to suit the local sentiment, which in itself was a very difficult job. This is because not all the ideas brought or borrowed from outside click in the local market while at the same time not all the ideas flop either. Local ideas are being exported recently at the same time.

Some of the local advertisements are shown on foreign channels like Zee TV and EL TV.

These foreign affiliations have also created a certain amount of competitiveness among them in the creative area that was not there before. That in itself has created some consciousness among the agencies without foreign affiliations to seek a way of competing with the foreign made ads.

PUBLIC RELATIONS

Another field which is said to have branched out of the main advertising stream during the past ten years is public relations.

Though the field itself is said to have been in the country for long time, professional public relations started mushrooming in the country at a much later time. And today, beside the in-house PR department of various organisations, there are companies, consultants or firms in the cities now that are specialized in the field of image building and image enhancement.

Separated form the main advertising stream in the seventies, public relationing has made itself into an industry worldwide and not only does it sell the image of a consumer producing company, most of the political leaders worldwide now bank on their services also.

Famous among the international PR companies Burson-Marsteller and Hill and Knowlton while names such as CMC, Mediators, Media Plus and Asiatic Public Relations are the main players in the local market beside numerous-one-man shows run by retired high government officials in the capital who are always there as consultants or lobbyists to help in case a file is stuck up in one of the ministries

Initially, both the advertising agency and the in-house public relations, generally who is hired to project more of the chief executive's image than that of the company, worked together, but now most of these works are divided between the in-house public relations, the advertising agency and the public relation firm

COMPETITION

The industry has witnessed very stiff competition among its various aspects over the last ten years, more so than in the past. While those employed to take care of the creative aspect of the industry usually stayed for years with their employer, creative people of today spend less time with one agency before moving on. The turnover rate is increasing as time goes by.

In the past, an advertising agency usually took care of all its client's needs, that has changed now that more and more companies, especially the multinationals tend to have diversified portfolios and therefore distribute the same among different agencies rather than giving them to one agency.

The smaller agencies that came into limelight too, during the past ten years have added to the intensity of the competition in the industry, now while the company's main advertising account may be given to its main ad agency, other related jobs such as printing calendars or diaries are giving to another agency which at times leads to three or more companies offering their designing services free of charge in anticipation of getting the printing job.

These smaller agencies, mostly operating as one-man-show came into limelight during the past five years when the Pakistan Advertising Association "threw its door open for every 'jack-n-jill' to enter the mainstream of the industry" as one company put it. According to sources, upto 80% of the number of advertising companies operating today come under the bracket of this 'smaller agency' out of which Pakistan Television is said to recognized as many as 2,000 of them.

The extent of competition in the industry has led the industry to a cut-throat competition among them. A creative personnel who came up with a slogan for a product last month ,moving to another advertising agency to work for the competitor of the same product is now a common practice.

Another aspect of the cut-throat competition going on among them is the extent to which different agencies are ready to compromise on their commission.

The usual practice is that ad agency is paid 15% of the value of the advertisement as their service charges, sources indicated that some of these companies now come down as low as six percent in order to retain the client.

According to estimates, the annual turn over of the industry has grown from 200 million rupees in the late 70s to over two billion rupees today.

However, sources indicated that the figures available in the industry are more hypothetical than reality, as one observer puts it, the bigger agencies usually inflate their announced figures in order to attract more accounts while the smaller ones won't let out their figures for fear of the income tax department.

More than one hundred million rupees are said to have gone into advertisement alone during the Golden Jubilee celebrations that were held across the nation last month.

GOVT.'s POLICY

The government's policy from time to time, according to some advertising agencies, has a discouraging impact on the industry rather than encouraging growth.

Major aspect of these policies include the use of advertising as "a game of carrot and stick between the government of the day and the advertising agencies as well as the media" observed a publisher

It is said the government attitudes to the advertising process are dominated by the desire to use the government-controlled advertising as a lever in their relationship with the editorial policy, this is a result of the total lack of legislative framework that could regulate and monitor the operations of the industry.

The other aspect has more to do with the game of brains than strictly enforcing a policy, it was said