GoaFest 2008: Agencies need to be active partners in building a brand

By , agencyfaqs!, Goa | In Advertising | April 04, 2008
Nokia CEO D Shivakumar prescribed nostrums for the client and the agency alike to help them anticipate the future consumer and build strong sustainable brands

GoaFest & #BANNER1 & # 2008 kicked off on Thursday with the Conclave. Of the various topics that came under the scanner, first off, D Shivakumar, chief executive officer, Nokia, discussed the value that advertisers expect from creative and media agencies.

Shivakumar started on a high note saying that India will soon reach its second trillion in GDP. But he also pointed out that India took about 60 years to arrive at its first trillion in GDP. So, the question is how will India achieve that second trillion in just another eight years? Shivakumar himself answered that question.

The first trillion was about basic needs and driven by distribution. The second trillion will be driven by wants and desires and will be led by value. The era of the first trillion saw clients of the LopZee order. "LopZee," as Shivakumar explained, "stands for the low price zero experience era." This era will be replaced by an era that will be unique and have a distinctive growth pattern. "There will be no benchmarks with other countries," he said. Thus, he said, the growth in the next eight years will not be linear or exponential, but discontinuous.

Shivakumar then moved on to elaborate upon the consumers in the country, whom he classified broadly into three segments: the pay more, get more segment; the worth the price ('paisa vasool') segment; and the pay less get less segment. The third segment, he said, is a segment that is seen only in India. "These people are aware that if they pay less, they will get less. But still they tap into the section," said Shivakumar. He added, "Rich people buy brands for vanity, while poor people buy brands for security."

D Shivakumar
The average Indian consumer is growing. The urban world is driven by aspiration, quality and value in that order, while the rural world is driven by the same factors in a different order - value, aspiration and quality. "It's funny they want the same things in different ways," said Shivakumar.

Consumer spending trends over the last seven years show that the Indian consumer spends on three commodities: entertainment and education, personal transportation, and communication, or as Shivakumar aptly codified it, ETC. This data provides a peek into where the spending habits of the future consumer will lead, he said. "The Tata Nano is going to create a different meaning in the world of personal transportation," he said by way of an example.

Shivakumar predicted confidently that in 2010, there will be 500 million mobile users, of which about 60 million will have video enabled phones, 200 million will have music facilitated phones, and 250 million will have phones that have camera and Internet features. He said that very soon, every service that is delivered through a physical building will be available through the mobile.

Next, Shivakumar listed the agency and advertiser perspective. He started by saying, "In the last decade, every business has become fragmented and has less control." He was quick to add that with the tech speak that has gotten into the field, a new era of user generated content (UGC) will erupt in India. "When 2G enters India, UGC will be big. YouTube will pale when the Indian masses start putting up their content."

He said that with time, a lot had changed and a lot hadn't changed on the client and agency side. He listed the changes both client and agency have experienced. "Respect," he said, "has taken a southbound journey." The markets are much more ruthless as they follow a fast cycle where brands die out as soon as they erupt. Strategic partners have now taken on the role of the agency as a consulting firm. And the final change, a good one, is that the creative agency is the true CEO.

Among all that hasn't changed, the investment that is put into training was topmost on Shivakumar's list. Salaries are still low; research is still the enemy of the creative idea and talk about rural India is still heard. The solution, Shivakumar said, is to bring together all the operations that are involved in the fields of marketing and agencies. The macro differentiations created within the region of marketing or agencies has resulted in low focus and thus loss of monies.

Shivakumar prescribed a three pointer format for the client and agency alike. For the agency, being true to the brand and not the client will mark a big leap in building brand value. Being an active partner in addressing brand issues is equally important, he said. Finally and most importantly, he said, "Be accountable even if you are not responsible."

To the client, Shivakumar said emphatically, "Be clear and truly listen." Most times, the client is hostage to glib speakers, who just sound intelligent and right when they're not. It's more imperative to listen to the agency and to the consumer. Appreciation was the final pill in the prescription.

"If the needle is moved on these three factors, we will definitely see a change that will benefit the brand in a large manner," he concluded.