MUMBAI, Feb 4: The dream merchants have woken up. The advertising industry is staring at a new reality: staff rationalisation, highly selective recruitment, down-to-the-earth salaries and more per-person productivity. It's not hunky- dory in the industry anymore and downsizing is the new buzzword to make the agency business more profitable.Trikaya Grey is less by 45 people, Mudra is also down by a 40-odd and Enterprise-Nexus by about the same number. The net number of employees is down in almost all agencies. Are the agency heads worried? Well, yes and no.
"Let us first begin by accepting that the business was carrying a lot of baggage and there was a definite need to downsize. But at the same time, it will be hypocritical not to admit that the tough market conditions have nothing to do with it," says Contract Advertising chief executive officer (CEO) Ram Sehgal. "It is, in fact, a combination of various factors that have led to this downsizing. Firstly, there has been a large instance of naturalattrition of staff in 1996-97 and we have not been over-keen to fill up the gaps because of the high cost of recruitment.
The depression in the industrial climate has also made the money situation a lot tighter and it was felt the best way to grow is to look inwards rather than outwards.
Hence, at Contract, there's been a lot of stress on developing the lower and middle-management cadres," Sehgal said. The industry is not, however, in a state of panic. "This was bound to happen and a lot of straightening out was done last year.There is no sense in recruiting like mad and pay enormous salaries if the productivity levels are not justified and with global systems coming into play, the agency business will become a lot more corporatised and less individual-driven. The number of prima donnas will come down and the stress will clearly be on the bottomline," says an executive director of one of the top 10 agencies.
That corporatisation is on the way is apparent as the 15 per cent commission is no moreconsidered sacrosanct by even up-and-coming agencies like Equus. When Ogilvy & Mather's (O&M's) Rajan Kapur had tried a performance-linked commission system five years ago, there was a hue and cry and the agency was forced to forego the idea, although it was internationally accepted. Today, a number of agencies are talking of a fee-based system and there's hardly a murmur. "The other reason for this downsizing is the rise of the client. With the multinationals emerging clearly the big spenders and their international agency networks laying down the norms, there is a lot more stress on delivery than ever before. While companies like Hindustan Lever are not cutting back on ad budgets, they are ensuring delivery. This means maximum productivity levels. And, that implies: more work by less people," says FCB-Ulka chief executive officer Anil Kapoor. Come what may, the fifty-year old Indian advertising industry is fast growing out of its adolescence into a mature and hard-thinking industry. It is no more a glamjob. Instead, it is evolving into a hardnosed marketing exercise, where you are penalised if you do not deliver.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
