MONDAY 30 JUNE 2014 Ahmedabad, Bangalore, Bhubaneswar,Chandigarh, Chennai, Hyderabad, Kochi, Kolkata, Lucknow, Mumbai, New Delhi and

Pune
4
T
he age of mobility and digitisation gave
us soaring spires and enlightenment,
while the industrial age accompanied
smoke stacks with mass production. And now
with globalisation, we are entering a new era
of mass personalisation of products and ser-
vices. This has put tremendous power in the
hands of the consumer who is now very gen-
uinely the king. This digital age, symbolised by
developments such as the wireless internet and
mobile applications, has led to an information
revolution where consumers are choosing to
reject the hitherto universal principle of one
size fits all. This is particularly true for the so-
called millennial consumers
who desire a personal experi-
ence and embrace products or
services based on their novelty
value often sidestepping stan-
dard products.
The examples of mass per-
sonalisation are evident in the
wake of customised offerings
across domains such as travel,
computer hardware design for
cars, tele-medicine, financial
products, m-education, m-
health, on-demand content etc.
Taking a cue from numerous
studies, brandshavestartedinte-
gratingconsumer engagement in
their outreach strategy and ini-
tiatives. Examples similar toper-
sonalised cans of Coke can be
seen across categories in apparels, beauty prod-
ucts, laptops, and even smart phones.
A recent Bain survey found that customers
are willing to pay 20 per cent more than stan-
dard equivalents for customised products.
Therearepredominantlytwoschoolsof thought
around brand customisation. Institutional
brands such as International Olympic
Committee (IOC) and FIFA and luxury brands
such as Louis Vuitton, Cartier and Prada hold a
traditional perspective on brand, maintaining
control and compliance. At the same time,
brands such as RED Bull, Coca-Cola and Pepsi
arepushingtocreatethepersonal impact onthe
consumer. However, while pushing the tradi-
tional envelope, businesses will have to answer
a fundamental question: Will customisation
dilute the power of my brand or actually help
unlock value from the same?
Essential to the debate around customisa-
tion is the availability of demographic infor-
mation on consumers. Telecom companies
stand somewhere in the middle of the value
chain with the capability to create magic
because of the availability of demographic
information, behavioural patterns and prefer-
ences. Companies are developing services
aimedat liberatingcustomers fromtheworryof
unused seconds basis the insight
that consumers will never be able to
control the duration of their calls.
Such initiatives have been wel-
comed and accepted by consumers.
With the introduction of mobile
devices, there was a sudden spike in
use of data services and mobile
applications. Takingacuefromthat,
mobile operators today aim to offer
special data plans that charge the
consumer strictly on the basis of
their usage. Considering that 96 per
cent of the mobile market in India is
pre-paid, such customisation initia-
tives are seen in sync with changing
trends, dynamic consumer usage
and spend patterns.
Adopting such data analysis has
helped telecom operators from time
to time to create mass personalisation services
for its consumers. With the rise of social media,
companies are also taking the concept of per-
sonalisation to social platforms. In 2014 and
2015, it is anticipated that customer-obsessed
companies in verticals such as retail, finance,
andinsurancewill introduceanddevelopproac-
tive features in their mobile loyalty apps.
Puttingcustomersincontrol makesbusiness
sense. Masspersonalisationisanopportunityfor
brands to not only develop and deepen rela-
tionships with each customer, but also to make
them active co-producers and partners eventu-
ally turning them into loyal brand evangelists.
Personalisation can be a source of massive
strength for brands in the future and we believe
that there are two clear pillars to back this asser-
tion. First is the increase in unequivocal expec-
tations of todays millennial generation. For a
millennial, the attitude of a brand can be as
important as the qualities of the product itself.
About 56 per cent of mainstream millennial
customers believe that brand loyalty is impor-
tant; this reflects themorepersonal approachof
this generationtowards brandrelationships and
points to what the next generation of consumer
will seek from their brands. Second, since peo-
plearebusysharingtheir lives ontheweb, avast
amount of data is available to collaborate and
co-create products that offer a distinctly per-
sonalised service.
With this, mobile operators look at person-
alised insurance plans, shopping deals and
machine-to-machine communications among
manyother possibilities. Withthewireless mar-
ketplace already cluttered with similar look-
ing options, personalisation will play the role
of a catalyst for operators to attract and retain
high value (ARPU) customers and maximise
wallet share.
Well executed personalisation not only
demonstrates brand confidence, but has the
power to help drive brand equity and loyalty
enhancing all aspects of the business value
chain. It drives unprecedented brand loyalty
among customers and creates powerful
market differentiation for products and ser-
vices. In short, brand personalisation stands
as the single most important brand promise
of them all.
GURINDER SINGH
SANDHU
HEAD, MARKETING,
TATA DOCOMO
GUEST COLUMN
The growing cult of personalisation
Whythe death of mass production could actuallybe good news for brands
T
he remuneration structure for
creative agencies has evolved
quite a bit in the past couple of
years. We have gone from compensat-
ing based on a percentage of media
spends to retainers or even project-
based remuneration. This has been a
result of many factors playing at both
agency and client ends lower spends
in certain industries, the movement of
media monies to different, newer
avenues and agencies themselves
becoming more specialised.
Retainers work best when the quan-
tum of work is fixed.
However, the quantum of
work alone can't be
enough to judge the out-
put from an agency and
creative agencies cannot
restrict themselves to
developing
communication but con-
tributetothelarger objec-
tives of the brand.
Considering that the
sought after talent at the
agencies is mostly at the
top rung, getting strategic
thinking and quality work
on various projects is
always a challenge. The
other side of the story is
that sometimes agencies
get overloaded with work and multiple
iterations in this fixed model.
It is always easier to compensate
what you can easily measure, objec-
tively. Media starts with the marketing
objective, provides data to back every
recommendation and of course the
plans are tracked and measured at reg-
ular intervals to course-correct and
learn for future campaigns. They seem
tohave abetter handleonthereturnon
the investment by the client.
Retainers do not put the onus of
improvising and delivering beyond
expectations. Like any other corporate
situation, you can only get the best out
of an individual when you incentivise
her. Hence, I see the variable compo-
nent playing a large role in the agency
remuneration, with periodic reviews to
ensureexpectations match
deliveries and course
corrections happen along
the way.
While creative is highly
qualitative in nature, it is
important to put some
structure to evaluate the
output. Some of greatest
companies around the
world look at creative from
one major filter: Is it in line
with the brief? Second, is
the benefit being commu-
nicated in the best possible
way? Aninnovativecreative
can communicate effec-
tivelyhenceleadingfor bet-
ter RoI for the campaign.
The other measures are on
overall agency performance. The
review I mentioned earlier should con-
sist of parameters covering both strate-
gy and execution, and help document
expectations and the minimum stan-
dard of delivery.
T
he classic 15 per cent commission
model was abortedas fewadvertising
agencies startedchargingalower per-
centage to undercut competition. The oth-
er reason for the ousting of the commis-
sion-based model was the influx of new
media avenues like radio, out-of-home, dig-
ital etc that dont follow the norms set by
typical above-the-line media. As a result of
this media fragmentation over the years,
lots of silos got created and multiple, spe-
cialised agencies cropped up. The earlier
simple math of calculating media spends
got rather complex.
Against this backdrop, we saw agencies
moving to the time-cost or retainer remu-
neration model. The flaw with this model is
that while a few international agencies and
multinational clients may follow the rules
and calculation methods of remuneration
as fixed by the retainer model sincerely, the
minute Indian clients come to the table, the
negotiation process begins and the one who
chargestheleast invariablywins. Theadver-
tisingindustryhasfailedtocheckthisbehav-
iour and is split on the issue of the remu-
neration conversation at large.
Everyone is a loser in the process.
Without the required funds, agencies cant
invest adequately in personnel. If I have an
IT company account, I would ideally like to
bring on board a resource conversant with
the sector. But if I lack the funds I will have
to use the existing manpower, possibly not
best suited to service the account. In this
equation, smaller agencies with limited
resources end up charging more whereas
larger agencies apply economies of scale
and pool together a team, charging lower
fees. It is a question of using the existing,
unattached to any project manpower.
It is timethat theroleof creativepartners
in generating profits gets acknowledged.
Agencies and clients can work together to
quantify the gains made by the brand
numerically, andshareaportionof theprof-
its made. We also need some intellectual
property rights to protect the advertisers
claim over their work. If a production house
createsapieceof worktobeusedinacertain
market or designed for a specific medium,
any diversions from this agreement attract
additional charges. So, say a production
house shot a commercial to be aired on tele-
vision in India, if it is used in Sri Lanka,
over digital, they will charge additionally.
Advertising agencies should have similar
rights. A shelf life could be defined for
the campaign.
Compiledby MasoomGupte
Creative output is best judged by the market
A
s an industry we have moved away
fromthecommission-basedremuner-
ation model (where the client paid the
agencya percentageof thetotal mediaspends
onthecampaignexecutedbythecreativepart-
ners) toaretainer model (wheretheclient pays
theagencyapre-decidedamount onanannu-
al basis). With the new media landscape and
the increasing importance of media agnostic
integrated communication ideas, the dice is
loadedinfavour of theretainer model that dri-
ves brand ownership, value creation and col-
laboration.
With retainers, the conversation around
theeconomicsof theexchangearetakenoff the
table at the very beginning. Clients and part-
ners can then proceed to building a successful
marriage. There is a sense of ownership on
behalf of the agency, a sense of loyalty that
comes only with a longstanding relationship.
The retainers workverywell inmost cases.
Except when there is a mismatch of expecta-
tions, questions ontheagencyoutput andval-
ue creation. Value creation and output must
be and in most cases, is quantified at the very
start of the agreement. Broad parameters are
tabulated for the purpose of evaluation at the
end of the year, either to discuss bonuses or
possiblytoserveasabasefor thecontract tobe
renewedthe followingyear.
However, as creative output goes, howdo
you really quantify it? The market is the best
judge of the work and if the needle shifts, one
canseetheimpact. Most clients, especiallythe
ones we have on retainers, invest heavily in
trackingmetrics like adtrackers, brandhealth
trackersetc. Theycankeeptabsontheefficacy
of aparticularcampaignusingthesemetrics. In
myview, acontrolledenvironmentisatriedand
testedmethodforresearch, but at theendof the
dayit iswhat it iscontrolled! Thetruetest lies
intheshelvesandinconsumers livesthedif-
ference we have createdas market leaders.
Retainersarealsobecomingimportant ina
fragmented media environment. Every client
hason-boardseveral specialisedagenciestoday.
Foraholisticmarketingplan, it isessential that
eachof these partners collaborate. It is imper-
ativethat agenciesworktogether todeliver the
best plan to the client. We, at JWT, have held
several joint briefings withour clients, withall
partner agencies ( media, digital, activation,
PR) present in the same room. The advantage
is that ideation may be a collective effort but
execution is left to the specialised agencies.
Such open collaboration is more encouraging
on a retainer basis where the partners are not
solely concerned about staking claimto ideas
andprovingitself better. Onebrand, oneagen-
da thats howit works the best.
BABITA BARUAH
EXECUTIVE BUSINESS
DIRECTOR, JWT (DELHI)
SANJAY TRIPATHY
SENIOR EVP AND HEAD,
MARKETING, PRODUCT,
DIGITAL AND E-COM-
MERCE, HDFC LIFE
Shelf life of the campaign should be defined. Usage beyond that must be charged
DISCUSSION BOARD | AD AGENCY REMUNERATION
PAY AND PRODUCTIVITY
At the Goafest 2014, when corporate clients took stage to voice
their unfulfilled expectations from their agencies, little did
they expect to be at the receiving end with creatives voicing
their concerns over remuneration. An audience member even
sent out a note, anonymously of course, questioning the
judiciousness of comparing creatives to daily wage labourers,
when paying them on an hourly basis. We continue this
discussion, asking stakeholders about their views
The variable component will
play a large role in remuneration
THINKSTOCK
MANISH BHATT
FOUNDER DIRECTOR,
SCARECROW COMMUNICATIONS