How Nervous CMOs nail their Ad Agencies to Save their Skin

My weekly column Ad Buzz which appears in mxmindia.com

The General Motors diet became famous some years ago as an effective means of slimming down and losing weight, although why it was attributed to a car maker completely alluded me. I later discovered it was an eating plan indeed developed by the car company. In January 2018, Ford Motors announced it would go on a ‘fitness’ initiative that would include slashing spending of up to $14 billion in the next 5 years. Marketing they said would naturally come under the lens along with the current WPP relationship although nothing was confirmed.   Now comes the Ford Motors announcement of a call for an advertising review of a part of their business.  WPP has been a near lifelong partner for Ford Motors first with JWT, and later with GTB a dedicated unit for Ford which was set up to pledge loyalty and allegiance for the account.

 

Unfortunately, putting the Ford account under review on the heels of the resignation of Sir Martin Sorrell could not have been more mistimed from WPP’s point of view.   But one wonders if this is a typical kneejerk reaction to the rising pressure on profitability at Ford.  Ford has been reporting underwhelming profits in the last year and the outlook for 2018 looks no better.

 

The history of advertising is strewn with examples of clients putting the agency under review whenever there is a sneeze on the business front.  Although the problem might have nothing to do with communication, agencies have been the first to be hit, often unfairly by nervous CMOs trying to save their own skin.

 

Ford is the third largest car maker in the world with a global market share of 6.5% after Toyota which is at No 1 with a 9.2% market share and Volkswagen at No 2 with a 7.2 % market share.  But except their Top 5 markets, which includes US, China, UK, Canada and Germany the brand might be under pressure more because of an inappropriate product mix country wise rather than any problem with their communication.

 

 

Xiaomi, the Price Warrior

Xiaomi overtaking leader Samsung in the last quarter of 2017 as India’s largest mobile might have taken even Samsung by surprise.  The brand now seems to be readying to be a world No 2 globally not a mean feat.

 

But this begs the eternal question for marketers.  Are price warriors long term players or are they just destined to be the flavor of the year?  While Xiaomi has definitely disrupted the market the key question that comes to mind is whether Xiaomi is an affordable brand or is it a cheap brand?  And does it have anyother endearing quality in its arsenal beyond price.

 

When one looks at their latest commercial with Katrina Kaif it seems to be a pure execution without a long-term brand building idea.

 

 

 

We have seen many price warriors fail in the past.  A great example is Videocon which managed double digit leadership market shares in its initial phase, but now is a forgotten brand with a staggering debt.

 

Unfortunately, after looking at their latest China commercial. I did not find it inspiring either.  So hopefully the brand takes notice that positioning and building brand values is as important as disrupting the market as a price warrior.

 

IPL is full of Surrogate Advertising 

One ex-industry professional with a long-term grudge against the advertising industry has pointed out an accusing finger at the industry’s self-regulatory body for the number of surrogate ads during the IPL.

 

Unfortunately, the ball on this seem to lie squarely with the government.  Advertising for extensions of liquor brands is allowed under the Cable and TV Act 1995, and this comes directly under the jurisdiction of the I & B Ministry and the CBFC.

 

Anyway the accusations of the person in question may have been misplaced. Obviously, he has not done his homework before setting his pen to paper.

 

Whither Abbys?

Now that the Abby fever is over, it does seem that participation at the Abby’s declined severely this year.  Also, there were the usual complaints of not being able to get a drink or dinner without standing in a long queue even though the crowds were smaller this year.  One big disappointment seemed to be that the Master Jury members could not get their own agencies to participate. The award’s organisers seem to think that the reason for the lack of participation is the high cost of entry that is dissuading agencies. Some say that the organising members of the Abbys are the same year after year and new members are not welcomed, which may also be a constraint on the award show.  The flipside of this argument is that not many leaders are willing to come forward to offer their services to help the industry bodies.

 

Bill Gates once said, “Your most unhappy customers are your greatest source of learning.” Obviously, the trick here is to find out why the non-participating agencies are staying away from the Abbys.

 

Unless of course, the real reason is the over-inflated egos of the key industry leaders which might be the root of the problem. And there might be no real solution to that one.

Prabhakar Mundkur has spent 40 years in advertising and worked in India, Africa and Asia. He is currently Chief Mentor with HGS Interactive a part of HGS in the Hinduja Group. He is on the advisory board of Sol 's Arc (solsarc.org ) an NGO dedicated to special education for intellectually challenged children. He is also a member of Whiteboard ( whiteboardindia.org ) which supports senior management of NGOs in financial management, PR, Communication and HR through pro bono expertise.

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