EMM entered the Indian market a couple of months ago through a joint venture with Indraksh Media. The company hopes to expand the market for media auditing, which till recent had only one player - Spatial Access Solutions. Stephen White, chairman, EMM spoke to afaqs! on the state of media auditing in India, and how both advertisers and agencies can benefit out of it.
White: I often wondered why the media auditing business in India was so small compared to other large economies. The fact is that only 5-10 per cent of all the advertising spends is audited in India, and that too by one player. In England, 60 per cent of the media spend is audited and is measured by four or five companies. In Europe, it is 30 per cent, while in the US, the figure is 20 per cent. Obviously, I smelled business.
However, I realised that I had to first understand the local nuances.
We sent out questionnaires to advertisers and media agencies. The results were quiet interesting. People wanted to know how our media auditing programme would evaluate the goodness of the agency and not its weak points.
We know that there is a big swing between good prices and bad prices, high fees and low fees. We want to ensure that the advertisers work with the right media agencies.
afaqs!: So is EMM a friend of the advertiser and a foe of the media agency?
White: No, not at all. If we ensure that each procurement by the advertiser is diligent and in agreement, our job is also to see that the agencies are paid the right fee and get the right incentives.
Our job is also to see that our clients get the right services and it is in the client's interest to see that the media agency gets its right fee. If the fees are too low, the client can never expect the right service or absolute commitment.
There should be incentives for excellent service, excellent quality and excellent costs for the media agencies. This is the model that is not very popular here, but I think that it is in the client's interest.
afaqs!: How can advertisers strike a fine balance between 'media saving' and 'media splurging'?
White: Clients generally have the tendency to save by cutting down spends. For instance, if they are spending Rs 30 million, they will bring down their budget to Rs 28 million.
For me, savings come in two folds. One is hard savings in fees and volume discounts, and the other is through smarter targeting and smarter channel selection. For instance, if the creative is really good, the consumer doesn't need to see it 50 times. Over-delivery of ads for the less well-known brands is fine, but I don't think we need that for the well-known brands.
For clients, it is more valuable to address soft gains rather than hard gains. Big clients know how to address hard gains and soft gains, and plan to target super gains, which revolve around content and social media. So, a company like Tata should be going for super gains now.
afaqs!: What has been the initial experience in the Indian market?
White: In Europe and USA, we have continuous business. In India, we see a huge market, with plenty of room for expansion, plenty of opportunity, relatively low cost of entry and no competition except one (Spatial Access Solutions).
From earlier experience, we have seen that when competition enters a country, the market seems to expand. We hope that something similar will happen here, too. In fact, we have worked with Spatial Access in the past when we had an ad-hoc business.
afaqs!: How do you react when media buying agencies do not pass on the bulk buying discounts to their respective clients?
White: Gosh! (laughs) Let's call all of those potential benefits AVB (Agency Volume Bonuses). After the client pays the agency, it's the agency's money.
If the agency smartly brings together all its clients' money to get that extra bonus, it's the agency's fortune.
Clients often fail to ask what their contribution is to the agency's total volume. The client has to understand that the agency is taking a risk when it takes the discounts and for that, a client needs to inculcate precise terminology in its contract.
I think it is to the benefit of both the client and the media agency to be transparent. It is not about pointing a finger at the agencies but pointing fingers at each other.
afaqs!: Do you think the media agencies in India should see you as a threat?
White: I think if I was here five years ago, then yes but now, I think no. We are here to show clients how good the media agencies are, rather than showing how bad they are. Could you have been better? Probably yes! We are here to show the clients that if you are spending 100 pounds, why cut the two pounds for the agency to one point five?