What does PM Modi’s ‘vocal for local’ push mean for independent ad agencies?

Prime Minister Narendra Modi’s clarion call for self-dependence holds a different meaning for independent advertising agencies. The Coronavirus pandemic has thrown an already-struggling world into a recession. It’s not surprising that the PM wants to concentrate on economic recovery, with added emphasis on supporting local businesses and brands. Advertising plays a vital role in brand visibility, and what remains to be seen is if the ‘vocal for local’ push will also extend to homegrown independent ad agencies.

An adman who has been quite vocal on this government policy from the start is Bang In The Middle’s chief creative officer Prathap Suthan. His LinkedIn post garnered a lot of attention and he believes that as a policy, both the government and business leaders should work only with independent agencies for the PM’s vision to bear fruit.

“It’s essentially a skewed market right now, with the networks and their retinue of agency brands cornering most of the big MNC businesses, and even the big Indian brands. Most international brands don’t and can’t call in Indian agencies. I know enough CEOs and CMOs who are unhappy with their agencies, but can’t call in local agencies because their hands are tied,” he says.

Suthan adds that even if the agencies don’t possess physical scale, the admen behind these agencies have led global agencies, before choosing to go independent, and hence, they possess mental and intellectual scale. He says that most of the pitches his agency has won has been against multinational agencies. To understand the minds of these admen, we spoke to four independent ad agency founders, and this is what they had to say.

Ashish Khazanchi, founding partner – Enormous

I don’t know about the broader conversation on ‘vocal for local’, but there should be some movement within the source – i.e., the government itself. All the ministries and government enterprises (such as the National Highways Authority of India), nationalised banks, etc., that advertise, don’t necessarily choose independent agencies of repute, which may have worked in mass marketplaces and won effectiveness awards, etc. This is something that’s well within the control of the government, and they should start having these conversations with independent agencies, too.

The government doesn’t willingly discriminate against small agencies, but every time there is a tender that comes out – one requirement is the size of the agency. If the turnover required is, say, Rs 100 crore, you need to take into account that no independent agency in the history of this country has ever reached that number. It might be more attainable if the turnover is set at Rs 20-30 crore. The only agencies that can make inroads in situations like this are the agencies that are 100 per cent owned by a network. You also need to understand that whenever a Korean or a Japanese client comes to India, they don’t go through the entire agency ecosystem. They opt for agencies that are owned by Korean or Japanese networks, in India.

Satbir Singh, founder, Thinkstr

To be honest, ‘vocal for local’ doesn’t mean anything for independent agencies. I said this on Twitter immediately after the Prime Minister made the announcement, too. No client is going to think to himself, ‘Hey, let’s call a local agency’, and then call us for work. But if you think about it – the international agencies are as local as the people who work for them. Ogilvy is helmed by Piyush Pandey, McCann by Prasoon Joshi, etc. ‘Vocal for local’ is a great conversation starter, but I suppose that’s all there is to it.

We’re an independent agency and we’ve had clients from the government before. We’ve worked with NITI Aayog for the past four years. There are also agencies, like Crayons, that do a lot of government business every year. Lots of regional agencies are also assigned government businesses. The agencies approach it like any other client. The government, however, approaches all work differently. There are different requirements, such as a minimum number of billings, turnover, etc. These requirements just happen to be more readily tick-marked against the Ogilvys and the McCanns of India…

They’re the largest agencies, so, they fulfil the years of operation, workforce requirements, billing criteria, etc. Most local agencies are relatively new, founded a few years ago, so, they don’t necessarily have the scale that the government needs; it’s not that the government is favouring one set of agencies over the other. A large agency might have numerous businesses, but a new independent agency has more scope of interacting with clients than a regular business. Because it’s an indie agency, there is more scope for the founder to give more time to his clients. The turnaround time and decision-making process is faster, too.

Amit Akali, CEO, What’s Your Problem

Before, we cut ‘vocal for local’ from the POV of an agency, I would like to cut it first from the POV of an Indian entrepreneur. While it’s not fresh, the emphasis on Indian businesses is always welcome. I just hope there are some concrete steps and advantages announced for the same. At the very least, it puts focus on Indian businessmen, and builds a universe of camaraderie amongst us. Hopefully, encouraging local businesses to use local agencies.

On the other hand, where it could really affect agencies positively, is if the government actually walked the talk on ‘vocal for local’, and opened up a panel of Indian agencies to work on the government mandates itself. The government is, by far, the biggest client in the country, and if it focuses on Indian agencies, or even changes certain restrictions in the tenders (to do with size, or number of years of existence), it would open up business opportunities for independent agencies, one that they would more than do justice to.

The logic behind this point of view lies in the fact that there’s equal amount of talent in independent agencies. In India, most indie agencies are run by people who’ve worked in mainline agencies for, say, 15-20 years. Quite a few independent agencies are doing a lot of good work in India for big clients. If you took the example of What’s Your Problem, we also handle clients like Amazon, Lenovo, and so on. In 2015, Medulla won quite a few awards and was an independent agency that won agency of the year at Cannes – which is a big deal.

Naresh Gupta, co-founder, Bang in The Middle

Most independent agencies don’t qualify for government work because we don’t have the turnover and the numbers. This is a problem that begins with the government, and the way it looks for work from agencies. In the last eight years of BITM’s existence, we’ve never qualified for a government tender, simply because we don’t have the numbers. I don’t think ‘vocal for local’ will apply for independent agencies, unless and until we close this loop by the government. What agencies can do, at this period, is to try and jointly present a picture to the government regarding the condition of these agencies, and the truth about our turnover. After that, it’s a fair fight. We may win, or lose, but at least we won’t be ineligible…

I don’t know if a multinational company would prefer an indie agency after this.Currently, most MNC clients work with either international or regional agencies that come equipped with knowledge on what’s happening in international, or regional markets, and they are aware of the kind of wider brand conversations that are happening. This is knowledge that independent agencies don’t seem to have.

As of now, when an MNC hires an independent agency, it’s mostly to do small-ish work. They’re not entrusted with bigger duties, they’re not lead agencies on any of these brands. Interestingly, most of our clients are active and buying work on social media and digital platforms. In fact, during this lockdown period, we’ve picked up more international projects than national ones…