Brandstand: Will Rediffusion be the turning point of Indian advertising?

In a remarkably disruptive move, the promoters of Rediffusion purchased the stake of WPP, making it a 100% Indian agency. While much of the popular press is raving about the exceptional courage behind this action, there is a bigger opportunity that can scarcely be concealed – the possibility of an indigenous business model obsessive about value creation, liberated from the P&L shackles of the networks.

My confidence about Rediffusion emerges strongly from personal experience, having spent five delightful years on its rolls. It was built on a genuine platform of cultural collaboration and the deep desire for meaningful craft, professional pride being a major part of its DNA. Due to its ownership structure, it enjoyed greater flexibility than certain other WPP agencies. But this was an opportunity not effectively exploited by successive managements. As a result, it did end up in a No-Man’s-Land of sorts, enjoying neither the continued support of large Indian clients nor the automatic acquisition of network accounts; a beleaguered P&L leading to the shutdown of its once-glorious Delhi operations. Today, an exceptional opportunity has again emerged, a set of circumstances strangely comparable to the heady days of the 1970s.

The fundamental overhaul required by the advertising industry in India is not possible within the network agencies as they follow a cloning approach of management that is contradictory to genuine value creation. For instance, the attempts at creating truly-integrated agencies–merging digital and activation seamlessly–have been largely thwarted by the accountants following the traditional resource allocation model. In fact, the culture of investment in human resources had long expired, as everything is ruthlessly connected to the acquired revenues. Innovative manpower models, open-source enlistment for key functions, are also rendered non-functional due to decadent global HR policies and an obsession for data security driven by Western prejudices. As a natural outcome, nobody dares to ask for rightful fees for fear of undercutting and not being able to demonstrate competitive differentiation; the entire MNC industry-culture a sea of debilitating sameness.

Certain Indian agencies are much better in the game and their commitment towards premiumisation and unconventional structures are quite commendable. Not constrained by the usual ‘global practice’ trap, they are sincerely able to generate exceptional value for their craft, both as ticket size and innovative alternative revenue opportunities. What they lack perhaps is the scalability in terms of business as well as people, the impetus of the promoter still the primary driving force. Those who had sought global affiliation for this very purpose found that cause self-defeating, the equity partnership creating more constraints than opportunities.

Rediffusion is uniquely poised to combine Indian antecedents with global learnings, its 40-year tenure offering education in both. Thus, leading to a brand-new business model designed to create maximum value, a parallel of how Indian entrepreneurs in FMCG and consumer services have made the MNC organisations struggle. An ITC or Dabur or even Patanjali have been able to build on this ‘India-First’ model, exceptional value a function of exceptional understanding of the country and its mindset. For starters, the new Rediff should genuinely become a totally-integrated agency, compulsorily creating seamless structures unconnected to short-term revenue fulfilment. Which will mean traversing the path from genuine strategic consulting to state-of-the-art operational implementation (activations et al), operating on the key ‘India client’ insight of seeking a solitary trusted partner, wherever feasible. At every stage operating on an ‘open-source cum dedicated-resource structure’ to fulfil the job of marketing consultants, advertising agencies and activation companies in one combined sweep.

The focus is on creating exceptional value for Indian clients, just as the Japanese agencies built their model for Japanese corporate cultures. This may sound restrictive but is a winning proposition, providing a steady channel of business and an attractive foundation for growth, staying away from the value-depletion trap of MNC clients. I can vouch from definite experience that the emerging or established Indian entrepreneur is a better candidate for gaining due remuneration than the fancy overseas organisation globally attuned to squeezing the agency. Through this model, the agency becomes an integrated business partner, taking first-person accountability of the marketing value chain, no longer just a provider of master narratives. I will reiterate that an agency like Rediffusion, liberated from the cloning business practices of the giants, is ideally poised to achieve this, setting an achievable benchmark for others to follow.

For any of the above to happen, the quality of leadership and commitment to the agenda will be naturally vital. As will be a rebooting of its glorious pioneering feats from the early days, the ability to provide a sound financial backbone for exceptional creativity, unlike the fabled MCM. A truly integrated Rediffusion generating exceptional value for Indian clients wishing to break barriers anywhere in the world can well be the beginning of beautiful journey. To restore the worth of Indian advertising and build a mint-fresh business model from the most diverse branding scenario in the world.

(Shivaji Dasgupta is the Founder of INEXGRO Brand Advisory and can be reached at: shivajidasgupta@inexgro.com)

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