The rise and fall of ad markets

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There was a time when several leading national advertisers were based in Chennai: Ponds, Citibank, MRF, Ford to name a few. Of late, many of those businesses have either moved out of Chennai (like Ponds and Ford India,)  or have become less visible on national media. I was told by a local ad man that more than Rs.400 crores of billing has moved out of Chennai in the last year alone. I can’t verify the numbers but its safe to conclude that the ad agencies have lost some plum businesses of late. There are only a handful of big advertisers left in that market.

Regional markets have always had it tough – their fortunes are linked to businesses based out of those markets. And the fortunes have been fluctuating. There was a time when several big agencies had an office in Hyderabad. Flight of business obviously results in cost cutting, maybe even shutting shop. Needless to say, it results in flight of talent from these cities – most of them seek better opportunities in bigger markets like Mumbai or Delhi. Its difficult for agencies to retain talent in such a scenario. And several of the agency employees – especially the fire-in-the-belly kind equate a better career, learning and remuneration with agencies based in larger metros like Mumbai or Delhi. Over time, this results in the entire talent from that city being labelled and perceived in a particular manner. There are people who consider any experience in the Gulf as ‘light’ and even ‘un-cerebral’.

The rise of regional business which seek professional advertising services has only been a recent phenomenon. They have until now patronized regional, isolatable media (like Sun TV) and local agencies. Over time, they could be the answer for sustaining, viable steady professional ad agencies in markets like Chennai. But such businesses are mostly family run and professionalism in marketing & advertising hasn’t really happened. No wonder that for such a small pie, there is a cat fight among agencies. Pitches are called for every year and agencies readily participate only in the hope of justifying their existence in those markets. Under-cutting and under-valuing one’s services is a natural fallout.

In the US, business is not linked to a geography. There are several Miami or West Coast agencies who handle national brands. While NYC is still considered hot, you no longer have to be an NYC-based agency to attract good talent or good business. Will we see such a move among agencies in India?

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  1. Its a pity that chennai ad market is in this state. While we can blam the client exodus out of the city. The agencies have to take a wrap on theie knuckles for not adapting themselves to IT advertising . The usual son and dance number dosent work with IT..its about business outcomes for them…there is enough and more business in the market and not a single agency equipped to service them. The other person to blam is the ADclub of chennai…it has taken no effort to build a strong case to reverse the trend… check this effort from uncle sam land
    there are still some talented senior hands who are with freelancers or disenchanred with the industry in chennai…hope someone wakes up again…. madras has sun, sand, beach, culture, kollywood…no reason this place cant be creative…

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