Arvind Sharma, chairman and CEO, India subcontinent, Leo Burnett has been elected president of the Advertising Agencies Association of India (AAAI) for year 2012-13. His term comes at a time when the affairs of the advertising and broadcast business are in a state of disarray. Post NDTV’s allegations against television ratings agency TAM Media Research, it has become imperative to have Broadcast Audience Research Council (BARC) as an alternative to TAM, but the inability of the three stakeholders ?AAAI, the Indian Broadcasting Foundation (IBF) and the Indian Society of Advertisers (ISA) ? to come to an agreement has delayed it from taking off. In a freewheeling chat with FE’s Anushree Chandran, Sharma talks about the BARC imbroglio, AAAI’s relations with other industry bodies, the goals and targets of the AAAI, and the challenges that come its way. Edited excerpts:
What has delayed the constitution of BARC? What are the points you now agree on?
Associations have their strengths and weaknesses. I don’t believe that any of us ? whether it is the AAAI, the IBF or the ISA ? is deliberately doing anything which goes against the interests of the industry at large. But our perception of what may be in the interest of the industry differs. People need to be convinced and that takes time. Nobody disagrees at this point that we need a separate ratings system. What we need is a new research design with an expanded sample size, coverage and one which offers transparency and candour around ratings.
There was a time when people were not even told about the number of people meters that had been installed. What we need is data transparency, better audit and security processes. The first question ? about the new research design, methodology, sampling, stratification — will be decided by the best minds in the industry which is the technical committee of BARC. Once we address this, comes the question of identifying the new research company that will be geared to take on the task.
In countries like the UK, the design is done by one set of people, the panel is managed by a panel agency and then there is a quality agency to supervise the data. There are enough checks and balances. If you have competing measurement systems, then checks and balances come in automatically. But in our country, our print survey or television panel, all tend to be expensive. It becomes difficult for the industry to support two competing studies. If you don’t have competing agencies giving you data, then you need to have enough checks and balances to make sure that the monopoly is not really a monopoly. The BARC technical committee that will design the study will decide how to configure these checks and balances.
What transpired in the last meeting of BARC?
We agreed on all major points in the last meeting of BARC. But this was a meeting of representatives of the AAAI, the ISA and the IBF and not a meeting of the boards. The people have to communicate to board members on all the points and get their approval. Our approach on this was that this is urgent and this needs to get done. And that we are not leaving this room till we agree. We expect the approvals from the respective boards to come in soon.
Most television measurements around the world are funded substantially by channels. This also reflects in the constitution of BARC which will be 60% owned and funded by broadcasters, the next largest contributor will be ad agencies, and the smallest contribution will come in from advertisers. The rationale is that television data comes within the purview and expertise of a media agency. Advertisers tend not to buy television audience measurement data, unless they are also media houses. Media houses are also major advertisers, apart from being major producers and distributors of content. That’s how the constitution and funding of BARC was worked out.
Post your meeting with TAM Media Research (TAM), what has been the update? Will TAM be considered if you were to float bids for the new research agency?
What we have told TAM is that we are hoping that BARC will be created very soon and there will be a team from BARC which will monitor its progress and ask the relevant questions. I see no reason why it should not be invited, if we float bids.
Besides the standoff over BARC, as president of the AAAI, what are some of your big goals?
Some goals remain constant year to year. At a basic level, the environment throws up all kinds of challenges and our goal is to make sure that we represent the industry’s viewpoint when these challenges come up.
Coming to specific targets, the AAAI executive council (EC) met in mid-August and we agreed on three or four key items. With nearly Rs15,000 crore being spent yearly on television, it is one of the largest mediums. While discussions have been on for the last 12-14 months, the truth is we don’t have a formal working document — a written arrangement listing the commercial terms with the IBF. Our contract with them expired a while back and having a formal understanding with them, documented and drafted in the form of an agreement is something that we want to get done at the earliest.
Again, there is the whole issue of television audience measurement. We need to move on to a new research design that is wider in its coverage and is robust as far as research processes go. We need a research that inspires confidence in the way it is administered.
Also, there are issues on membership that the AAAI needs to decide on. So far our position has been that full service agencies, creative agencies and media agencies are members of AAAI. We invited media agencies to be full members around three years ago. The AAAI executive council has agreed to review what we want to do with digital agencies, outdoor agencies, activation agencies and event agencies. We want to decide whether, and if, the time is appropriate for us to include these categories and what will be the rules of engagement. We are still reviewing this, which means that we haven’t made any decisions. We will lay down the path forward on how and when we will consider many of these categories. As our business evolves, we need to embrace specialities in our business that are becoming key.
What has stood in the way of AAAI renewing the contract with the IBF after it expired? Has there been another attempt by them to reduce the credit period?
Well, there was an attempt by the IBF to reduce the credit period a year ago, from the current 60 days to 45 days and it was a unilateral attempt by them which did not work out. There are a number of issues in the written contract with the IBF that need to be sorted out, but I think it is appropriate that we discuss it with them. Once you put these out in the media, they spark off hot passions and become a point for debate. The IBF also has its own issues with the written arrangement (previous document), but I am sure, that when we discuss these, we will arrive at a point of conclusion.
Any specific goals with regard to the talent crunch?
Talent is a perennial challenge. Over the last decade, our response to the talent question has been training. But it’s also true that talent — for our business and many other businesses — comes from the small towns. Agencies don’t have any organised mechanism to market themselves in these towns. We need to look beyond the six or seven main cities in India. We need to market ourselves in the next 40-50 cities that are contributing to India’s growth in a huge way. Our challenge is to come up with a platform which attracts potential talent from smaller cities and towns, and yet is a model that is self-sustaining and that doesn’t become a flash in the pan. What this new platform will be, we don’t know yet. We could, of course, think simple and come up with a job fair. But finding senior professionals to leave work aside and go to these cities is tough.
Compensation has been a sore point in this industry. How do you plan to tackle it?
We are trying to get clients to understand that it takes a lot to produce outstanding advice, strategies, media plans, market analytics. We’ve have been saying to our member agencies – let’s stay together on this. Clients who are not willing to compensate adequately, let’s not pitch for them. We will study and take advice from other industries on how they have managed compensation. We have agreed in principle that beyond talking among ourselves and with our clients, we will look at how other industries have successfully maintained compensation at profitable and remunerative levels. If required, we will bring consultants on board.
The original intent behind Goafest was to make it as successful as Cannes Lions. Are we anywhere close to that goal?
Goafest is a well-known and respected awards show. In that sense, we have made an impact. Last year, we saw great participation in terms of both delegates and entries from Sr Lanka, Pakistan, Bangladesh. Much was said about our jury processes not being perfect, but I’m sure, you read this year about Cannes. Then again, one needs to be original and constantly tighten the processes for the awards show, in order to continually deliver results. But I am not even saying that we intend to take Goafest global. I don’t think any purpose would be served by Goafest becoming another Cannes or Clio. The reason we went to neighbouring countries is because there is far greater integration with these countries, in terms of the work that is happening on our brands.
