The man needs no introduction. Madison Communications' chairman and managing director Sam Balsara can boast of having built up, that too from scratch, one of the only unaffiliated 'Indian' media agencies in the country today.
Today, Madison Communications is among India's largest, fastest growing and most respected media agencies.
In a free-wheeling conversation with indiantelevision.com's Hetal Adesara, Balsara spoke about Madison's plans, addressed current industry issues and more...
Excerpts:
What makes Sam Balsara one of the most influential men in India today? |
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But what do you think is your USP? |
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Madison completed 15 years as an agency in March 2003. Can you give me a brief rundown on what have been the landmarks for you and the company? The second high came when we tied up with DMB&B and Procter & Gamble (P&G) became our client. The third high was when P&G chose us to be their agency of record (AOR) over other more established larger players and with whom they had a heritage relationship. The next high came when despite our breakup with DMB&B; P&G and Coca Cola decided to continue their relationship with us in media. As for the more recent highs, we are delighted that our PR unit is doing extremely well. Last year, P&G decided to entrust our PR unit with their entire PR account and consolidating it with us. Last year was particularly good for our media division as some of the country's most prestigious and coveted accounts were won by us - Asian Paints, Cadburys, Hyundai, more recently Marico and most recently Airtel. Our outdoor unit, which was started for the second time, has been extremely successful and will complete three years in a month's time. I think there are some more interesting new units that have been planned which we will unveil over the next few years. I must mention one particular high that despite all odds Madison Creative - despite the severe disadvantage that it operates with which is the dominance of the media unit - continues to win new business and also delight existing clients. The lows are very well documented. The biggest low was when we lost the Cinthol account since I was closely associated with it personally. I think the failure of our first outdoor unit - Outsell, the failure of Adnova which was a unique web enabled system to give quality backyard work of media. |
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Considering that you've won all these accounts in the face of "international competition", just what is it that you offer that is so markedly different? |
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Extending that point, the first half of 2004 has gone extremely well for you. It's almost been like a dream. How do you propose to beat that in the second half? One of the things that I must say here is that we are indeed unique because there is no other agency that can boast of this kind of billing with just 22 clients. So we have the highest average billing per client which works well for us. But in return we offer our clients the highest number of media professionals per client. We are now some 175 media professionals dealing with just 22 clients. This is a unique formula that I have not come across anywhere else and it works well for us and our clients. |
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Madison is the only media agency which can actually challenge the supremacy of Group M - Mindshare, Maximize and Fulcrum. How easy or difficult or easy was it to be at par with them considering that you are solely an Indian agency? I feel today there is a dying need to experiment with new media. The Internet is still only very small but it is showing signs that it is going to become a powerful medium. Right under our nose SMS has become a big thing. I am told that there are 600 billion SMSs flying across the country every month. But media agencies and clients have been slow to recognise this. Instead we go on putting money behind the tried and tested television and press. I think there is a need for spending more on multimedia campaigns and in order to give our clients a greater confidence because we now live in a world that is very strongly data focused and less judgmental. For example the Madison Media Research Center has just come out with a new tool called M Spectra and that tool allows our planners to show to our clients what is the combined reach and frequency of a multimedia plan. So we constantly invest in newer tools and techniques and I think what helps tremendously is that all these are conceived locally here by the very same people who are actually dealing with media every day. So these tools are not just fancy tools which remain on laptops and are brought out at the time of presentations. But they are tools that are conceived by people to help them in their day to day working and to respond to clients and media challenges as we face them by the day. |
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You are probably the only agency that has very rarely lost a major client in all these years. The exception could be BPL, but that was more because you won Airtel rather than the client being unhappy. Just what is the Balsara USP? We believe that once an advertiser becomes our client all his problems are our problems and we do sort of go the extra mile. I believe and I hope to sort of try and partner the client genuinely without looking at Madison's stream of resources or profitability or whatever to make the client succeed. As I mentioned to you, most large agencies and their top management because of their shareholding structure are focused on the agencies growth, profitability and increase in billing. Our unique ownership structure enables us not to waste, and I use the word 'waste' consciously, top management time on all these internal issues. Instead our top management is focused on our clients' growth and profitability and I think this is a particularly unique advantage that Madison enjoys because of which our service in the market is superior. |
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Speaking of loyalty, your first client was Godrej who is still with you after all these years? How have you seen the brand grow and what is the proposition that you have been offering to them? |
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Another thing that Madison has been known for is innovation. What you did around Shanti in the good old DD days is well documented. Any recent work that has particularly enthused you on that front? I think it was not just an innovation just for the sake of innovation but given the fact that Cadburys has some sort of question marks raised on the quality of their products, we thought the fact of Cadburys chocolate being gifted by celebrities would go a long way in reinforcing public confidence in the product. Another innovation of us was for Perfetti around cricket with all those characters saying Lage Raho. Another very dramatic new thinking that we provided and which won the Gold in media strategies at the Emvies this year is our excellent paper on how you can control media cost and yet make a brand big. Today with rising media cost and inflation, the challenge for any brand is how to maintain profitability. And generally a lot of people would put a lot of money behind a successful campaign. This unique approach lays down how little to advertise and also when to pull a copy off air. So we're very proud that it was our unique approach and thinking that won the ultimate award which is the Gold in media strategy and strategy is what media is all about. |
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Recently, Madison has been on a recruiting spree and has taken on experienced media professionals including Raji Nair, Savitri (ICICI), Rajiv Gopinath among others. How have they contributed to the growth of the agency? |
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What is your medium and long term strategy for Madison's growth? |
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How do all the profit centers that fall under Madison Communications stack up as far as contribution to the overall revenue kitty is concerned? |
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So can you give me an estimate of the percentage these units contribute? |
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How has the growth been for Moms? You also won the in-stadia rights for the Indo Pak series in Pakistan. How did you'll fare there? Now we are into our second venture that is the Asia Cup where whilst the perimeter boards were sold bundled with the television rights, all the other signage at the pavilion level have again been won by us and they have virtually been sold out. Madison Outdoor is also now in the process of opening an office in Dubai. We hope to make some growth in that market. |
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Why Dubai? |
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And when is this likely to happen? |
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What is your vision for the agency? Where do you see Madison five years from now? |
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Moving away from Madison to an industry overview, let us tackle the most immediate issue, that of service tax. What are the short and long term repercussions flowing out of this for the industry? |
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There are those who say that going by current trends, over the next few years service tax will be at about the same levels as excise duties so we could well be looking at 16 per cent service tax. Your comment. |
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So are you saying that you would be happy if service tax was hiked up to as much as 16 per cent? |
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Talking of service tax, it is well known in the industry that there are five major clients who have consistently resisted paying service tax, Levers, P&G, Colgate, Godrej and Tatas. You being the head of Triple As if I (Advertising Agencies Association of India), what is your stated position on this? |
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Looking at payment, for a media agency what do you think is the best compensation model, fixed or commission linked or a mix of both? I do believe that there is a lack of appreciation of this phenomenon which is unnecessarily causing a lot of angst and discussions amongst both agencies and clients. |
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As far as compensation is concerned, the industry norm is about 3-4 per cent. Now considering the amount of work that agencies offer their clients, both qualitative and quantitative, isn't it rather incongruous that a creative agency can demand 10-12 per cent for work rendered. One would have thought that if not at par, the media agency should actually be charging higher. After all what the agencies offer (or claim to offer) today are 360 degree solutions. |
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In today's cutthroat environment, with so much undercutting, it is not inconceivable that compensation may go even lower. Where will it all end? What is your take on it? |
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Looking at the industry trend, earlier we had full service agencies, then came the specialists, now we have the one stop shops like Mindshare. Has the wheel turned full circle? |
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Let us look at advertising on television, which is our area of particular interest. For products pitched on mass entertainment programmes like a 'Kyunki...' or 'Kahaani...', which come out on top of any TG that you can think up, how do you differentiate the media plan for different clients? After all nothing can better the CPRP benchmark than a 'Kyunki...' or a 'Kahaani...'? |
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Coming back to you now, why are you in the media business? And if you were not here, then where would you be? As for you second question. I don't know where I would be. As I have told earlier, after I finished my graduation my elder brother was a chartered accountant and I was all set to become a CA too. And then somewhere along the line this management thing came up and there was a huge rush where everyone wanted to get admission. I did not get admission in IIM (A) but I got through Jamnalal Bajaj Institute and therein lies the tale. |
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To sign off, are there any pearls of wisdom that Sam Balsara would like to offer the industry? In fact our philosophy, though many large clients find it difficult to accept, of - 'If it's safe, it's risky,' is indeed true in today's advertising world. If you want to follow a safe path, it is actually the riskiest path because chances are that it is not going to work. So it is better to take a risk and do something a little different. Then at least you may have a decent probability of success. |