Page 46 – Synergyzer

The PID Perspective

Sanna Malik

September 13, 2022

SANNA MALIK: What is the current PID mandate?

IRAM TANWEER: The PID mandate is to highlight the government’s policies and initiatives, while disseminating its official narrative among the masses. We carry out news placements for the government, and through media-coverage of official events. These are PID’s core responsibilities.

Another very important task that PID carries out is managing government advertising: Release government advertisements; manage billings for those advertisements and ensure payments to media-houses and advertising agencies.

SANNA MALIK: How does PID see itself working with advertising agencies?

IRAM TANWEER: PID wants to harness a very close relationship with advertising agencies, which is why the Advertising Policy was revised in 2021. According to the new policy, all government clients including government ministries, departments, organizations, autonomous bodies etc. can select and keep a minimum of three advertising agencies on their panel for two years for their display campaigns i.e. campaigns that have any artwork, pictures or colors involved. (The classified campaigns are released by PIB directly to the media.) The Ministry of Information and Broadcasting is the only one that can appoint six advertising agencies simultaneously.

Since it’s government clients allocating and spending the budget, they can select ad agencies to be called for pitches. PID assumes the role of facilitating and regulating the process, ensuring that it is carried out smoothly and fairly, where all advertising agencies that have been called for the pitch get equitable opportunity to pitch for and acquire business.

There are three important representatives in this process; one person is from PID, the second person represents the government client and the third is an External Media Expert (EME) that we call from the advertising industry. All three of them evaluate the presentations and the ad agency with the highest points is selected.

PID Karachi recently improved this process, because I was not fully satisfied with the quality of the External Media Experts (EME) that we had on our panel. So I contacted Mr. Jamal Mir, President of Pakistan Advertising Association (PAA), asking him to advise us on EME’s from the advertising industry to add to our list that we can call to our presentations and engage with for any consultation that we might require in the future. We did this to ensure transparency and merit when selecting ad agencies and so that we may be able to get diverse opinions. With this initiative, PID was able to identify several EME’s with a broad-based experience and a fresh perspective on advertising.

SANNA MALIK: In 2018, PID had stopped releasing any advertisements through advertising agencies, and their payments were put on hold too. Yet according to the PID Advertising Policy 2021, advertising agencies are being engaged again? What transpired?

IRAM TANWEER: I joined PID only last year. Yet according to my information, PID was facing issues with advertising agencies on media payments, as in the agencies were receiving payments from the government, but they were not making the 85% payment that they were supposed to make to media outlets including TV channels and newspapers. Due to this, the media houses were coming into a tight spot since they had to pay their workers, journalists, for the broadcast rights they had acquired internationally etc. There was also a lot of pressure on the government as well about its ministries, departments etc., concerning not making payments on time.

The government created the current system mainly to facilitate and regulate payments amongst respective parties, including government bodies, the media houses, and ad agencies. This required a number of changes to be made in the earlier system.

One, classified ads, including tender notices, are now being placed through PID directly. These ads are being made by PID in-house, for which we put together a department and hired resources with relevant experience to get it working. We do not involve any ad agency in the process; also PID ensures that the newspapers etc. get paid for placing the classified ads directly.

Two, advertising agencies are now only involved in display ads. They are selected for a two-year period and government client departments are allowed to appoint three agencies. Earlier the agencies were required to pitch for each campaign and they were reluctant to pitch repeatedly, which is why we let go of that requirement.

Three, PID is now involved at every stage of the payment cycle: Receiving bills from media outlets for classified ads, verifying them, sending them to government clients, giving payment deadlines to those clients and suspending them if any media outlets complain about delays in payments. Since the classified and tender ads appear on a daily basis, no government department wants to be suspended. Therefore, with this suspension system that PID is now enforcing, we are also involved in the recovery process.

To ensure that payments are disbursed smoothly, PID has created a WhatsApp group for payments of classified ads. We intimate media houses about payments that we receive from government clients and they collect their cheques from us.

As for the payment for display ads, advertising agencies and media houses, collect them directly from the client departments and PID only gets an intimation of the payment.

SANNA MALIK: How does PID facilitate and regulate media releases for display campaigns?

IRAM TANWEER: When government clients request media releases, they also indicate the budget, language, target audience, region etc. We advise them with the names of the media vehicles – TV channels, newspapers or publications and digital platforms where the campaign should be run or placed.

Yet, being a facilitator, PID does consider client requests if they have any specific media vehicles in mind, since it’s their budget. Also, as regulators, we also try and keep a balance. For instance, if we feel that too many ads are being placed by any client department in say, any one newspaper, we make sure to incorporate other names too for equitable distribution of business across the media.

I believe when the authorities changed the system and gave more autonomy to PID; the process got simplified for more transparency and control. The government keeps changing its policies, and so far I can say that this change has made the system much smoother.

Read More: THE PAS SIDE OF THE STORY

SANNA MALIK: According to the PID Advertisement Policy 2021, ‘the agency must submit an affidavit on Stamp Paper indicating that it has not been blacklisted by any ministry/division/ government department/government organization or federal/ any provincial government and also submit a non-collusion certificate’. This policy is for the ad agencies to follow. In terms of government clients, how are they cleared for releasing advertisements via PID, especially when they have been blacklisted by PBA and APNS?

IRAM TANWEER: In such cases, the main responsibility lies with the PBA and APNS to inform PID of the government clients they have blacklisted, along with the reasons, so that we may stop their campaigns from being run from our end.

For example, APNS highlighted certain payment issues with a major government-owned utility client and I did blacklist that institution. Yet, the client immediately began to pay its dues to the newspapers. Similarly, PID also suspended another government client department, and we are not releasing their ads to any media.

According to the new Advertising Policy 2021, matters related to suspension are under PID’s domain. We initially try to resolve such financial mismanagement issues by cooperating with the media and the government departments, but if there continues to be a violation of policy, then PID is forced to take strict action, usually in the form of blacklisting.

SANNA MALIK: PID is a government department that functions in perpetuity, and is not affected by regime changes. Yet, according to media outlets, once a new government comes in, it stops the dues of the earlier government from being paid. According to APNS, government owes PKR 2.1 billion to the media and subsequently advertising agencies. Due to this, there are negative sentiments amongst media houses that PID has been exerting its power to control the media by not paying their dues. What is PID’s perspective on this?

IRAM TANWEER: For any government, the media is the biggest stakeholder in propagating its perspective. The previous government gave more autonomy and responsibility to PID to bring more transparency to the system and to make it smoother. It also released the updated Advertising Policy in 2020 and updated it in 2021, with the objective of streamlining the system and to minimize financial mismanagement.

The current government, especially the Ministry of Information and Broadcasting is pressing hard on PID to recover outstanding dues of media as well as advertising agencies since 2008. To ensure recovery, the current government has instructed PID to blacklist all such clients who have not paid their dues to advertising agencies and the media as well as such agencies who have not paid the media dues according to the earlier system when government clients would make 100% payment to the agencies and they would further pay the media 85% of the amount. The Secretary of Information has also suspended a number of government clients in this regard.

There are times when top officials at government client organizations are unaware of their institution’s payment defaults and why their advertising has been suspended. In such cases, PID officials contact the government clients themselves and if required, visit them also after sending the suspension letters. In response a number of officials have expedited outstanding payments of their departments.

Here it’s important to note that government institutions cannot afford to be suspended for too long, because they have to publish their classified ads including tender notices on a daily basis. These tenders are worth millions of rupees, and once any institution is suspended, their operations are disrupted. I have blacklisted a number of such public sector autonomous institutions, which then pressurize us in withdrawing the suspension, yet I continued to enforce the policy and eventually they were forced to settle their overdue payments.

Yet, we also have to deal with a catch-22 situation at times; for instance, suspending these organizations may lead to unemployment, which PID wants to avoid at all costs. Also, since the government’s narrative is represented through PID, we have to maintain cordial relations with the clients, agencies and media houses, so it does become difficult to be overly strict at times.

We hold a daily morning-meeting for financial recovery action-plans at PID Karachi; and prepare weekly updates to evaluate our billing lists, overdue payments and recovered amounts. We also share these records with our headquarters in Islamabad. We have been instructed to ensure receipt of payments by June 20, 2022; by the sitting Minister for Information and Broadcasting since budgets of AGPR (Accountant General Pakistan Revenues) clients lapse after June 30 every year, so we must get the payments before that.

While it is one of the toughest tasks to recover delayed payments and bad-debts, this whole exercise is bringing results and we have recovered a number of previous payments.

THE PAS SIDE OF THE STORY

Sanna Malik

September 12, 2022

SANNA MALIK: PAS acts as a representative of the common interests of advertisers of Pakistan. It also has a mandate of bringing together marketing, advertising and media professionals to enhance industry practices. What kind of advocacy does PAS offer?

QAMAR ABBAS: We aspire that advertising is efficient and effective for the advertiser; rewarding for the media, agencies and associate suppliers, and true, honest and equitable to the consumer. This belief is at the core of our working and our existence and therefore we believe in inclusivity, as working in silos will never have that much of an impact than working together with all the stakeholders. To this end, we try developing working committees and relationships with industry associations that represent agencies, broadcasters, publishers, govt. regulators, etc. It is a time-consuming effort, but has to be two-sided and everyone has to believe that this has maximum impact in the long run. PAS is always forthcoming in this regard, however, if we do not succeed in engaging any of the stakeholders, we continue to do our bit, and in my experience, it eventually results in partners joining in for the greater good of the industry.

On advocacy, we have quite a wide area of expertise ranging from taxation, content regulation, establishing best practices with media, promoting ethical and responsible advertising within the advertisers etc.

SANNA MALIK: Advertising agencies and media buying houses are a major part of the industry, specializing in creative and media buying services. How does PAS see itself working alongside PAA?

QAMAR ABBAS: PAA is one of the most major stakeholders of the industry. If we need to raise the bar of marketing communications and focus on creativity and media innovation that leads to effectiveness, it is important that the two societies work closely together. We need to firmly believe in partnerships rather than having a client-vendor relationship. Building on this belief, we need to work on areas like standardizing the pitch process, developing skillful resources and making the business equitable for all the partners. To achieve all this, we need to organize ourselves and craft a vision that will benefit all stakeholders and will help grow the industry.

Up until now, PAS has been working alone; be it organizing specialized trainings, running global competitions, developing a knowledge hub for the industry, instituting a world recognized award program etc., yet now, we need to synergize our efforts and believe in the spirit of ‘mutual-support-for-mutual-benefit’.

SANNA MALIK: What role does the organization play in terms of advising on client-agency relations? Does that include arbitration between clients and agencies also?

QAMAR ABBAS: We fully recognize that to build a great brand and to achieve marketing communication that is efficient and effective; we need to work with our ad agencies as partners and therefore, we are particularly focused on client-agency relationship that is healthy and equitable. In this area, we have partnered with a UK-based world-renowned company called Aprais. However, our efforts and the advertisers’ point-of-view needs to be understood and agencies need to go an extra mile to ensure that the relationship is healthy, as it is equally beneficial for them as well. It would be great to work with PAA in this area, so they can synergize our efforts as our objective is the same.

Answering the second part of the question, PAS in the past has played a role of arbitrator between member companies and agencies on need basis. However, yes, agencies can approach PAS with any kind of complaint, and if it relates to one of our member companies, we will intervene in resolving the conflict.

SANNA MALIK: How is PAS leveraging its position to uplift the expertise of the marketing, advertising and media industry?

QAMAR ABBAS: In this area, our major thrust has been on trainings, workshops and conferences. Another interesting area that we have developed is having ad agencies participate in global competitions. We run these in Pakistan and the winners are sent to compete internationally at Cannes and Spikes. This serves as a great motivator and provides an amazing learning experience. We see these awards as another strong and well-established initiative that will help raise the standard of marketing communications and its practitioners. We have been successful in showcasing our work internationally and also aide in getting people from Pakistan to enter international jury’s, which in itself is a great learning experience.

However, these are the areas where PAS is working alone and PAA’s collaboration will synergize our efforts as this benefits both, the clients and the agencies. Agencies need to understand that they need to step up the game and change the way they have been operating and see trainings and learning initiatives as investments. We can encourage advertisers to play their part, but they also need to see that agencies collectively are willing to make this investment. These efforts cannot be single sided, and agencies need to show their commitment as well. I strongly feel that PAA can partner with PAS and play a crucial role in this area.

SANNA MALIK: What kind of consultancy does PAS offer to brands in terms of advertising specifically?

QAMAR ABBAS: In the area of consultancy, PAS has a very well-developed arm where it provides consultancy to member companies by connecting them with the most appropriate local or international advertising experts matching their specific requirements, through our extensive network of local and international affiliations. These include customized in-house skill set training, client-agency evaluation, hiring and recommending agencies, building brand identities etc.

SANNA MALIK: What kind of arbitration does PAS provide its members?

QAMAR ABBAS: The most significant arbitration service that PAS provides is between member companies on ethical and responsible marketing communications under our Code of Advertising Practices. Over a period of time, the Society has adjudicated more than a thousand cases and there has never been an instance that a member company has not abided by the decisions made by their peers. PAS has also adjudicated disputes between member and non-member companies and has been praised for its neutrality, as we strongly believe that we need to self-regulate ourselves before someone else does. With an impeccable reputation in this area, our arbitration services is the first line of defense our member companies opt for rather than pursuing other legal alternatives. In addition, the Society has also worked with Competition Commission of Pakistan (CCP) in raising awareness on deceptive marketing and how it harms the industry and the organization; and under this initiative, we have carried out a number of public and customized in-house sessions for the industry.

Besides this, PAS also acts as an intermediary body to resolve disputes between member advertisers and other partners like advertising agencies, media and government regulators. We have a 100% success rate in this area as well.

SANNA MALIK: What is ad fraud resolution that PAS carries out?

QAMAR ABBAS: For ad fraud, our position is aligned with all the global advertisers and it is very clear, “zero tolerance to ad fraud with compensation for any breach”.

Ad fraud is a considerable threat and one of the fastest growing cybercrime and this is not acceptable by advertisers as it drains millions and millions of their ad-spend. To this end, first the publishers, platforms and all intermediaries (including ad agencies, ad tech, data partners, etc.) should give confidence to advertisers that they are buying authentic and relevant inventory against which advertisers have committed their spend; and second, any media investment found to be associated with invalid traffic should be refunded within a reasonable time frame under a streamlined process that should be as simple as possible. Working in this direction, PAS has teamed up with an international company Spider AF to help Pakistani marketers battle ad fraud by automating the identification and reporting of invalid digital traffic that not only would save them millions, but will also increase the effectiveness of their digital ad campaigns. This is one major solution from the marketers’ toolkit that PAS offers to its member companies.

SANNA MALIK: What role does PAS play in terms of advising on developing legislative policy?

QAMAR ABBAS: In this area, one of the major roles that PAS has played is helping the broadcast regulator PEMRA, put together a regulatory framework for managing the TV ratings system. Here, PAS alongside PEMRA plays a leading role in resolving disputes between companies and the rating service provider/s.

In addition, PAS also works closely with regulators in ad content regulation. Another area that we deal with is taxation issues and it is here that we feel that all the stakeholders can work together as it is a collective industry issue that impacts us all.

Getting Better with Age — Murree Brewery

Anusha Zahid

September 9, 2022

The history of the Murree Brewery dates back to a few years after Britain formally colonized India in 1857, and the emergence of Pakistan was nowhere near. It was established in 1860 by two British engineers, Edward Dyer (the father of the infamous Colonel Reginald Dyer) and Edward Whymper, at Ghora Galli, Murree (the hill station also established by the British in 1851) to slake the thirst of British soldiers and civilian personnel across the subcontinent for alcohol. The brewery, managed by the families of Whymper and Dyer, became one of the first modern breweries in Asia, gaining popularity in army messes across British India as well as becoming one of the largest employers in the region. The company won its first award for product excellence at the Philadelphia Exhibition in 1876.

Between 1885 and 1890, the company established breweries in Rawalpindi and Quetta and acquired interests in Ootacamand or Ooty (South India) and Norailiya (Ceylon) breweries. A distillery was also set up in Rawalpindi, next to the brewery. By 1920s, the brewery in Murree was transferred to Rawalpindi due to water shortage, however, malting continued at Ghora Gali till the 1940s, after which the property was sold out.

Murree’s heyday was World War II (1939-1945), when it produced 1.6 million gallons of beer a year but the business began facing a sharp decline once Partition riots broke out in the region, as a result of which, the historic brewery – constructed in Gothic style architecture – was burnt down. Following Partition, the company also lost a large market of Indian drinkers.

After Independence, the brewery also became an independent company and since then, has been run by the Bhandaras – a prominent Parsi business and political family. Under the Bhandaras, in a new Pakistan, business became brisk again, because even after Independence, the country remained secular (till 1956, when Islamic Republic was added). Hoardings and neon signs of Murree Beer on buildings was a common sight. It was also available on the Wine & Spirits menu of Pakistan International Airlines (which was considered to be one of the 10 best airlines in the world between 1965 and 1979), and until the 70s, the brand was competing with various imported beer and whisky brands in the country. Their target market was the middle-class for whom buying imported alcohol was a luxury.

The fate of the brewery changed forever in 1977 (the only time when it ceased production temporarily), when the (then) Prime Minister Zulfikar Ali Bhutto enacted prohibition laws and the sale of alcohol and bars were banned in the country, and the brewery was only allowed to sell alcohol to non-Muslim and foreign residents.

Although consumption of alcohol is still prohibited, Pakistan is the only Muslim country in the world to have a functioning brewery, which even today, continues to do roaring business, producing 10 million liters of beer each year, along with hundreds of tons of single malt whisky, vodka and brandy. It is also one of the country’s biggest tax-payers.

From alcohol, Murree also produces a range of non-alcoholic products such as fruity malts, juices, jams, ketchups, vinegars, sauces, as well as Sparkletts (drinking water) under its division named Tops Foods and Beverages.

We interviewed Isphandyar Bhandara, CEO, Murree Brewery, to learn about the company’s history, its evolution over a century and a half, under his grandfather and father, various democratic and military rules, amid political ups and downs; on diversifying into the non-alcoholic category and most importantly, the challenges of running a brewery in a Muslim country.

“Under the British management, my grandfather P.D. Bhandara worked at the brewery as one of the directors. Before this, he worked as a sales agent for a typewriter brand – this is what I have been told by my paternal grandmother,” recalls Isphandyar.

“He died at the age of 62 (in 1961) and at the time of his death, he was already the Chairman of Murree Brewery,” he adds, and points towards a framed news clipping (an obituary) on the wall on his right, which reads:

Mr. P.D. Bhandara breathed his last in Lahore on Tuesday morning. He suffered a coronary thrombosis attack. He was 62. He has been a spokesman for the minority community for a number of years and was a well-known philanthropist. He leaves behind a widow, two sons and a daughter.

At the time of P.D. Bhandara’s death, his eldest son Minocher Bhandara (father of Isphandyar Bhandara) was only 22-years-old and studying at Oxford. The other two children were a girl named Bapsi – a polio-stricken, homeschooled child, who later went on to become the famous Bapsi Sidhwa, “Pakistan’s finest English-Language novelist” (The New York Times), who also taught at several American universities and was conferred with Sitara-e-Imtiaz in 1991 – and a boy named Feroz.

Bapsi was a year younger than Minocher and Feroz was fifteen years younger than Bapsi.

“If at the time of my grandfather’s death, my father was 22, then my uncle would have probably been five or six. There was no chance that he could be considered as heir to the business,” explains Isphandyar.

Since all three children were studying, in the immediate period after P.D. Bhandara’s death, his widow Tehmina Bhandara took over the reins of the business, who according to Isphandyar, was a very strict and reserved woman, “characteristics that dominantly reflected in my father’s disposition,” he says, adding that whatever he knows about the family history has been passed down by his paternal grandmother and not his father because his relationship with his father was very ‘unemotional and practical’.

“Our relationship was not strained but it was different. He was a quiet, reticent man,” says Isphandyar.

Minocher Bhandara took over the family business during the late 60s, when although the company was only producing beer, the business thrived because the beer they produced was also being exported to neighboring countries.

During his tenure, Minocher brought in new machinery from Germany, as well as set up the non-alcoholic division called Tops Juices and Beverages in 1969. In the same year, he also established Murree Glass to produce their own beer bottles, which were earlier procured from Gujrat Glass and Jehlum Glass, small, but very famous pre-Partition factories.

“The reason why my father set up the non-alcoholic division was because he did not want Murree Brewery to be just seen as a sharab-making factory. He wanted to give it a softer and better image. Also, after 1977, following the prohibition, when the brewery was shut overnight, my father realized how important it is to have more streams to the business and not just depend on one.

In the non-alcoholic category, the company started with mango-flavoured juices. According to Isphandyar, at that time, only two companies in Pakistan produced bottled mango juice, Shezan and Murree; Mitchell’s existed but they had not diversified into juices yet.

“Please do remember, that at that time, there were only a few industries in the country and they knew one another. In Rawalpindi, if someone had to find work, there were only two employers, Attock Refinery and Murree Brewery; the third was Pakistan Army. This is how things were during the 70s, the rest was entirely a jungle, with only army houses and the famous Ayub Park,” says Isphandyar.

By 1979, Murree introduced non-alcoholic beers – Malt 79 and Cindy – sold even today with the same name.

(Although the first factory for Tops Juices and Beverages was built in Rawalpindi, the operations were eventually moved to Hattar in Khyber Pakhtunkhwa (KP), along with Murree Glass during the early 90s, when Nawaz Sharif, the then Prime Minister gave Hattar an industrial estate status along with tax holiday to businesses for five years.)

Isphandhyar, during his father’s time at Murree, recalls frequently visited the factory on his bicycle. He vividly remembers Pakistan Railways track inside the brewery where empty bogies were filled with beer bottles neatly stacked in jute sacs and sewn on the top to keep them in place. The loaded train would then go to India, Sri Lanka and Afghanistan.

Today, can you imagine exporting or even going to Kabul?” chuckles Isphandyar. “My parents used to go party with friends in Kabul, Tehran and Beirut. It was a different time. Goras frequented Karachi, people went to bars and cabarets, it was a normal thing. Doctors would recommend Murree brandy to patients suffering from cold. Would they do that now? NO.”

After finishing school, he left for the US for further studies, but got homesick and returned only after a year, much to his father’s resentment, and resumed his studies in Islamabad. He confesses that studying was the last thing he was interested in during those years, the priority was always cricket and hanging out with friends. “You see, this is the drawback of having your own business; one lacks ambition. I had no aspirations, because I knew I will be able to sustain myself. Once my father is not around, I will live off this (business),” he says.

Despite the lack of ambition, during his university days, Isphandyar started taking active interest in the business and once done with education, he began worked in Murree’s different departments to learn how they operated, from running machines to store-keeping to looking after the accounts and sales. The process drill continued till 2003/2004, after which he was promoted to the position of director procurement.

“I knew I had to eventually take care of my father’s responsibilities because there was no one else. My sister was married off and my younger brother is mentally-challenged. Moreover, my father’s younger brother and my uncle, Feroz, was never interested in the brewery business. He left for his studies to the US and started his own real estate business there. By the 70s, he became a US citizen. He had 9% shares in the brewery till 2014, after which he sold them to someone outside the family. Today, he is the Malik Riaz of Houston, who made a lot of money buying old rundown properties and renovating them,” explains Isphandyar.

During his training years at the brewery, Murree introduced its famous non-alcoholic beverage ‘Big Apple’ as well as peach and lemon malt drinks, as the company kept looking for opportunities outside the alcohol business.

2008, Minocher Bhandara passed away due to complications resulting from a serious car accident in China. Isphandyar was 35 and married with two sons. He was elected by the board as CEO of the company, and his mother, (Minocher’s widow) Goshi Bhandara became the director.

For Isphandyar, it was not easy getting into his father’s shoes, “especially when you have had an overshadowing father, who though trained me for nine years, maintained his distance and did not make his son his peer.”

But despite Minocher’s stiff exterior, Isphandyar believes when it came to work, his father was a lenient man who overlooked a lot of wrongs; “he let people come in late, forgave them for stealing items etc.” and this happened because most of the time, he was away from the office, travelling.

Apart from Murree, Minoher Bhandara also played an active role in politics and was on Musharraf’s team with a Track II diplomacy with India, due to which he visited India almost every month. “It is because of this that people in the brewery became complacent. When I joined, I put an end to this complacency, and as for the people who could not put up with the pace of production, I showed them the door.”

To bring further efficiency to the brewery’s operations, Isphandyar installed new machinery, both for the alcoholic and non-alcoholic divisions and emphasized on better quality. “Once I became a full-time CEO, with a stick in my hand, things began to change for the better,” he says.

With active, aggressive marketing and frequent advertising, by 2009/2010, the sales began to surge. In 2010/2012, when the US war in Afghanistan was at its peak, the company sold juices without effort. “We sold juices worth USD 2 million to Afghanistan, while in Pakistan, the sales were much more.”

Despite prohibition, the surge in sales for both divisions came on the back of both external and internal factors, including improvement in quality, which was earlier a problem and increase in prices of smuggled beer (which was three to four times the price of Murree). Hence people started opting for local beer.

“All booze comes to Karachi via Dubai, and of late there has been a restriction, which is good for us,” says Isphandyar. He says he is glad that the government realizes that legitimizing Murree and giving more permits, will not just beneficial us, but them as well, as they earn 70% to 80% per bottle that we sell for a dollar. If they ban Murree, the smuggled imported booze will flourish, which will not bring them any revenue.

In terms of sales of alcoholic products, he says the excise department takes decisions. “We are dependent on them. If they give 100 permits, I will issue a hundred trucks, if they issue ten permits, I will issue ten trucks.”

In the alcoholic category, Murree sell seven to eight types of vodkas including the flavoured ones, three types of gin, two types of brandy and two types of rum, along with eight types of beer.

As for selling non-alcoholic products, he says the sky is the limit.

In 2012, Isphandyar also added sparkling water to its non-alcoholic division. Sparkletts – earlier owned by the Hashwanis – is premium quality water from Hattar and Murree and is the first company in Pakistan to introduce water in glass bottles. “It is not as visible in retail as Nestle, but we have more sales in Punjab and KP,” he says and adds that the company will soon be exporting Sparkletts to Saudi Arabian market.

Murree’s non-alcoholic products are exported to US, UK, Canada, Australia, New Zealand, Spain, Saudi Arabia and Malaysia.

Today, their non-alcoholic category Tops Fruits and Juices turnover is about PKR 2.5/3 billion a year; the non-alcoholic beer generates the same amount and Sparkletts bring in PKR 700 million annually. Liquor and juices sell equally throughout the year. Beer demand picks up from April through September.

Although all categories are bringing in good money, Isphandyar believes with time, doing business in Pakistan has become harder. According to him, the corruption level has gone up tremendously as well as the costs; the economy is screwed up, thanks to the PTI government. “There is so much talk on ending corruption that all bureaucrats, linemen, civil servants, inspectors are scared of getting caught, hence, they have increased their rishwat rates. This is because the more you talk against something, the more people will do it! Imran Khan beat the drum so much now that my work is stuck. All businessmen are affected by this, it’s not just me,” he says.

Talking about his plans for Murree, Isphandyar believes it is important to stay abreast with trends as without innovation and change, any industry will die. As for growth in sales, he says as long as religious reactionaries do not get control of the country, the brewery’s future is bright.

As for his successor, Isphandyar says although he wishes to see one of his sons take over Murree Brewery as CEO since it is a legacy business, he will not enforce it. “Even if they do not want to join the company, it is important for them to find their true calling, because if they want a comfortable life, they will have to work. I am not leaving them unlimited amounts of gold.”

He says since Murree Brewery is a public limited company, with an independent board, the company will find a CEO. It will not die out or suspend operations.

“If my sons join, it is good, if not, not a problem. The company will make arrangements.”

PUTTING ADVERTISING BACK ON THE MAP

Sanna Malik

September 8, 2022

SANNA MALIK: According to its mandate, the All Pakistan Newspapers Society (APNS) has “successfully evolved a mechanism of streamlining advertisements and [a] clearance system protecting the collective interests of its member publications, advertising agencies as well as advertisers.” How is that done?

SARMAD ALI: The biggest concern of the APNS when it was formed in 1953 was to protect the interests of the then still-evolving newspaper industry and to secure the newspapers by developing a payment system when working with the nascent advertising agencies ecosystem.

The payment mechanism, which though has been tweaked over the years, but is still in place, allows advertising agencies accredited with APNS to place advertising in the newspapers on credit basis. There are two safety valves built into the system: We protect member publications from defaulting agencies and protect accredited agencies from defaulting clients. To that end, we encourage agencies to register their clients with us. That way, if a complaint is filed against a defaulting client, the APNS can blacklist the client until all dues are cleared.

Of course, agencies can also default. Either the client is not paying them, or it’s a willful act where the client has paid, but the agency chooses to keep the entire payment, including the 85% that is intended for media, in our case newspapers. In the latter scenario, the APNS suspends the agency until dues are cleared.

SANNA MALIK: What is the accreditation process?

SARMAD: There are three types of advertising agencies that are registered or listed with APNS: Associate, provisionally accredited, and fully accredited.

Associate agencies have a credit time limit of 60 days on postdated cheques which must accompany each release order. After a year as an associate with a good track record, and with no complaints from the member newspapers, and no bounced cheques, the agency becomes eligible for provisional accreditation. This requires a bank guarantee of PKR 2.5 million. After another year and payment of another PKR 2.5 million, the agency acquires full accreditation.

The credit period increases with each tier; for associates, it is 60 days, for provisionals, it is 75 days, and for full members, it is on an average 105 days. Associates get a pre-set trade discount of up to 14.5%, while provisional and fully accredited agencies are entitled to 15%.

It’s a model that has worked well for the last 70 years and we have over 80 agencies working with us.

SANNA MALIK: Do you intend to modify the current system in any way?

SARMAD: We are considering categorization based on agency performance. For example, Category A would have agencies that have never defaulted and are considered very good paymasters, Category B may be advertising agencies that may have defaulted yet paid their dues after some time, and so on.

SANNA MALIK: Which kind of advertising agencies have been the most problematic?

SARMAD: Those handling government advertising.

Over the last 10-15 years, federal government dues to ad agencies — and consequently media outlets — have ballooned to PKR 2.1 billion. Large government debts, dating from 2008, still have to be settled. The reason is that every time a new government comes to power, it holds off paying for advertisements that were run by the previous government, which was most likely led by a different political party.

But we look at governments being in perpetuity. It doesn’t matter who the Prime Minister or Information Minister is at any given time; if an ad is placed by the Government of Pakistan, publications as well as other media outlets consider it a sort of sovereign guarantee. There was a time when release orders issued by the government’s Press Information Department (PID) were as good as cash, but over the past several years, our confidence in the government’s payment mechanism has evaporated. While the Punjab government has been relatively effective and pays its dues within a reasonable time frame, the federal and other provincial governments still need to put their house in order.

Unpaid dues are a serious concern because if the government is deliberately not paying, that means it is trying to suffocate the media. Freedom of the Press is impossible without the financial independence of the press. If the media has to deal with the government’s financial hold over it in order to survive, then it becomes compromised.

SANNA MALIK: How is the APNS dealing with this?

SARMAD: Since 2020, the Press Information Department (PID) has devised a system by which the government and its various departments and corporations began paying dues at the ratio of 85% to publications/media and 15% to advertising agencies. This effectively absolved ad agencies of their liabilities. Earlier, release orders would be issued by the agency and whether or not the client paid up, the agency was supposed to pay within a stipulated time frame/ In the new system of split payments, the agency is responsible only for the placement of an ad in the newspaper and the financial liability has shifted to the client, in this case, the government.

We send our invoices to PID for verification and it forwards the bills to the various liable government ministries, departments, and organizations as well as to AGPR. We believe this needs to be improved. If the RO is being issued by PID, then it must assume its liability as well. This means that PID must be given the authority and autonomy to make payments. We have suggested that funds of the various ministries, departments, and corporations should be placed at the disposal of PID to enable them to settle media invoices on time.

SANNA MALIK: The mandate also states that “no listed clients are allowed to release their ads in any member publication without the clearance by the concerned agency.” Yet clients have released advertisements to APNS member publications via the PID. How does that happen?

SARMAD: After April 2020, the government made two significant policy changes. One, it split the payment ratio into 85:15 – 85% to the media and 15% to the ad agency involved – instead of giving 100% of the amount directly to advertising agencies.

Two, all classified advertising is being released directly by PID. The government only releases display advertisements through advertising agencies. Back in the sixties, it was mandated that classified ads of ministries and other government departments were to be released by the PID, whereas corporations and autonomous/semi-autonomous bodies would continue releasing all of their ads through advertising agencies. The new policy change has taken away the rights of corporations such as Pakistan International Airlines (PIA), Pakistan Railways, National Bank, State life, or WAPDA.

The APNS is not in favor of this policy change. I believe that this should not have been allowed until the outgoing ad agencies gave their clearances to PID to release the classified ads of their listed clients. With the new system in place, those government bodies that may not have cleared the dues of their agencies are able to release advertisements directly. We are lobbying with the government to get this changed back to the old system where both the classified and display ads were b released through advertising agencies while continuing the current payment mechanism of 85:15.

SANNA MALIK: How can advertising or media buying agencies secure themselves in such a situation? Does the APNS provide protection to agencies in this regard?

SARMAD: For the past year and a half, the government has operated in a way where one agency makes an ad while another agency releases it. This is inefficient and intended to weaken the controls and protection that APNS and even PBA) have had to offer to agencies.

A government client can do whatever it wants since they can have 4-5 agencies on their panel. For example, a government department that is a client of ABC agency can choose not to pay ABC and release the ad through XYZ instead. XYZ will accept because it is anxious to get the campaign and the business. Similarly, the newspaper is also keen to print the ads. Hence the cycle keeps on repeating itself, which messes up the system. The situation can be improved if the advertising agencies registered their clients with APNS before releasing campaigns. Also, advertising agencies need to be mindful of the fact that they should not release campaigns of clients that were being released by other agencies without acquiring NOCs from the outgoing agencies. The only way to safeguard this is if the agencies are fully on board.

SANNA MALIK: Advertising agencies and media buying houses are a major part of the industry, specializing in creative and media buying services. How does APNS see itself working alongside the Pakistan Advertising Association (PAA)?

SARMAD: APNS strongly believes that the PAA is a representative body for advertising agencies in Pakistan. The APNS has had a long relationship with PAA and over the years they have worked together. There is APNS – PAA joint committee since the late 80s although the committee does not meet as often as it ought to. We have been working very closely with PAA in the last few months and while it is important that the committee collaborates to ensure proper systems are in place and the interests of the advertising community are safeguarded, I strongly feel that PAA has to establish itself effectively and it needs to evolve into a stronger organization so that it can represent the advertising industry effectively.

I have also proposed a joint committee of the APNS, PBA, PAA, and the Pakistan Advertisers Society (PAS), where they jointly address issues that are being faced by the advertising and media ecosystem.

SANNA MALIK: AdAsia aimed to showcase Pakistan’s creative side to the Asian market as well as the world. Did it benefit us?

SARMAD: We wish it would have had; but unfortunately the AdAsia Lahore was in December 2019 and by March 2020 the whole country and the world, was in lockdown due to the COVID-19 pandemic. Any impetus or hopes of any positive outcomes that we were expecting fizzled out. In 2021, we were supposed to showcase Pakistan in AdAsia Macao but could not as it became a virtual affair.

Perhaps now is the time to get into forward gear. We ran two International Advertising Association (IAA) campaigns last year; the first was the ‘Pledge of Positivity’, which was a TV campaign in which we asked people to pledge to positively beat the pandemic. The second was ‘Let’s Advertise Again’; in which we tried to encourage advertisers to start advertising again. We believe that through the campaign we made advertisers realize that they are the engine of growth and consequently advertising helps them fuel their growth. Advertising should be looked at as an investment, not an expense. These efforts did make a difference and sparked some movement in the advertising community.

SANNA MALIK: What needs to be done to develop the advertising craft in Pakistan?

SARMAD: At AdAsia Lahore 2019, Sir Martin Sorrell in conversation with Richard Quest commented that advertising had come full circle and it was time to go back to the full-service agency model. At that Quest remarked that Sorrell is considered the father of disrupting the full-service agency model, and Sorrell replied that disrupting the model was the right thing to do back then, and going back to it is the right thing to do now.

I agree with Sorrell.

I have worked on a number of great creative campaigns. For instance, Polo Mints were launched with ads that featured a hole literally! Similarly, the Lux Chambaili variant was introduced with Pakistan’s first fragrant newspaper. For a Nestle Milkpak campaign that ran during two cricket tournaments, we got the famous Jang cartoonist Javed Iqbal to draw a series of front-page cartoons linking Milkpak to something that happened in that day’s match.

These great campaigns happened only because we sat down with the advertising agency creative, account, and media teams. When creatives know the process of how a newspaper is printed and learn to bring their ideas live on print, great campaigns follow. Interacting outside boundaries takes us beyond newsprint columns and airtime seconds to think out of the box and create campaigns that actually come alive.

Right now, advertising is too cluttered and identical. You can take the brand logo off of one automobile ad, put in another logo, and change the photograph; no one will know the difference. Similar is the case with advertising being done for banks. We have got to go beyond lookalike advertising and that can happen only if firstly, those working on the campaign understand who the customer is, and secondly if they understand what the choice of media can do for the brand.

They say that the advertising that we have grown up consuming is dying. To make our ads as memorable and vibrant as they used to be, we need to bring the creative and media agencies together with the media …. Remember what Marshall McLuhan said Medium is the message. Advertising has to become collaborative to survive. That’s how we can create a brighter future for advertising.

THE PAA THAT WAS: THROUGH THE LENS OF SENATOR (R) JAVED JABBAR

Sanna Malik

September 7, 2022

SANNA MALIK: In your opinion, what made PAA an effective body for the advertising industry? What made it work that seems to be lacking now?

JAVED JABBAR: Majeed Ahmad, Nafees Ghaznavi, and myself launched MNJ in 1969. About nine years later, in early 1978, I began to give voluntary time to re-organize the Pakistan Advertising Association (PAA) as the sole representative body of advertising agencies on the invitation of senior advertising practitioners including Mr. A. Ghafoor, Chairman, Adarts Advertising, and others.

In the previous years, the industry had gotten divided into two groups, yet by 1978, the differences were largely resolved and there was a consensus to work together. I was honoured to be elected as the Secretary General, PAA, and asked to lead the Pakistan delegation to the 11th Asian Advertising Congress held in Manila, Philippines in November 1978.

Pakistan’s participation in that Congress also acquired another dimension in strengthening PAA because, under the dynamic leadership of Antonio de Joya who was chairing the Manila Congress, several country delegations decided to create the Asian Federation of Advertising Associations (AFAA). President Marcos of the Philippines administered the oath of office to us and I had the privilege of being one of the first Vice Chairmen of AFAA.

The active contribution made by Pakistan, both to the Congress and to AFAA – had a positive impact on attitudes back home, which strengthened PAA. We increased membership and also initiated dialogue with other groups. A crucial decision taken to convene the first Pakistan Advertising Congress (PAC) from 3rd to 5th September 1979 in Karachi under PAA also acquired historic importance. For the first time in the country, all six sectors related to the advertising process including advertisers, advertising agencies, media, production services, government regulatory entities, and citizens or consumers of products and services; came together to identify challenges and formulate initiatives for progress. To stress that advertising was more than merely selling and making money, we adopted the theme, “Advertising and national development – challenge and response”, which was all-inclusive and relevant for the country.

The purpose of PAA was reinforced through the valuable and enthusiastic participation of the heads of advertising agencies, who were also members of PAA, as well as other members of the advertising workforce, particularly the younger generation of that time.

The PAC and events including exhibitions, musical concerts, social events, etc. that were created around the congress demonstrated that it is possible to bring people together for a shared cause. Most importantly, since all of the six advertising-process sectors were being represented, it enabled dialogue on matters of interest to each sector, including the need for building cohesive organizations and institutions such as PAA.

To symbolize the reality of poverty and austerity faced by a majority of the country’s population especially in rural areas and in urban slums, lunch served on the first day of the Congress was simply daal and roti, even though the venue was a five-star hotel. We invited eminent individuals such as the visionary banker Mr. Jamil Nishter and bold marketers like Mr. Khawar Butt to speak at the event and define the scope for how advertising could act as a positive force for progress, and not for the mere promotion of consumption.

What made the Congress work was the pure novelty of such an event taking place for the first time. A vital factor was the activism contributed by heads of agencies who were otherwise locked in cut-throat competition but who showed that for a larger cause, they were willing to cooperate and set aside competitive interests.

All such factors including holding the PAC and bringing the who’s who of advertising together for a greater cause contributed to making PAA an effective body.

About why that spirit of 1979 is lacking now – that answer should be sought from the heads of agencies active in 2022. More importantly, and food for thought: What is it that would bring them together and unify them for a shared cause?

SANNA MALIK: How was PAA structured back in the day that made it the active association that it used to be?

JAVED JABBAR: The structure of PAA in the late 1970s and through the 1980s was that of any conventional trade representational body i.e., each institutional member had to fulfill their rights and responsibilities by observing codes of professional conduct, by contributing an annual fee and supporting shared goals.

The fact will always remain that it is individuals who make the difference, regardless of changing circumstances. Even a handful of people in a sphere of say, fifty or hundred agencies can set an example if they are determined to take constructive action.

About ten years after the first Pakistan Advertising Congress, the PAA once again demonstrated the capacity to bring together all related sectors within the country and more importantly, internationally at the Asian level.

It was the PAA that took the initiative of enhancing the role of Pakistan at the international level by becoming a regular attendee of Asian Congresses held in Singapore in 1980, New Delhi in 1982, Seoul in 1984, and Bangkok in 1986. Our cohesion, consistency, and cooperation proved to be so effective that eventually, we had the honor of presenting Pakistan’s bid to host AdAsia in Pakistan for the first time in the competitive presentation held in Seoul. We secured more votes than Australia despite Pakistan being perceived rather negatively due to the prevalence of religious orthodoxy and Martial Law being in place.

The 16th Asian Advertising Congress was held in Lahore in February 1989. As the Chairman of the Organizing Committee, along with other members of the industry; we all contributed a substantial amount of time to the task of organizing the congress, while putting aside personal and professional business interests. I was also a Member of Benazir Bhutto’s first Federal Cabinet at that time.

The Congress became a fine example of collaborating and working collectively: There was a core group of individuals within PAA and amongst advertisers, media, and production services who were more than willing to prioritize the non-commercial aspects of the industry over personal business interests. The result was that even advertising veterans from other countries who attended AdAsia 89 in Lahore said that this was the best-ever AdAsia that they had attended so far.

SANNA MALIK: On what basis would PAA award membership to its agencies back then? Did any processes and policies exist within PAA that would gauge the health of prospective members’ businesses and business practices? Or would PAA help them create such practices?

JAVED JABBAR: The most effective feature of any agency for eligibility back then would be its accreditation with the All Pakistan Newspapers’ Society (APNS). This would signify minimal financial stability and credibility of the agency in question. Also, the experience and reputation of the proprietors or the heads of agencies, along with the industry perception of the agency’s services would also play a role.

Even though it was well-known that certain agencies indulged in unprofessional and unethical practices, they could not be excluded because; one, other agencies were unwilling or unable to present documented evidence to support any potential complaints that could be filed via PAA, and two, there was an unspoken consensus that someone should not be deprived of their business or their sources of livelihood because of perceived lack of ethics alone. In other words, regrettably, there was a willingness to look the other way!

Here I also want to emphasize that advertising agencies are the most vulnerable part of the advertising chain since advertisers and media dominate and control that chain. It is only in long-established and stable economies that professional associations are able to sustain investment in building their own institutional capacity, and even they have their problems.

Hence, PAA did not – or was not able to – develop its own internal institutional and human resource capacity to be able to help improve the business practices or the business volumes of its members.

SANNA MALIK: What were PAA’s efforts back in the day in terms of up-skilling the Pakistani advertising industry and taking it to the next level?

JAVED JABBAR: A major contribution to improving industry skills was the significant increase in interaction with advertising practitioners from other Asian countries and through reviewing the advertising output of other countries. We did this by regularly participating in events such as AdAsia every two years and by arranging for periodic reviews within Pakistan. A number of agencies had affiliations with international networks so the process of observation and skill enhancement was already taking place within those agencies and their overseas networks.

SANNA MALIK: PAA earlier derived mechanisms to support and safeguard advertising agencies, for instance introducing the minimum production tariff. Even if there were instances that certain agencies would decide not to follow it, it was codified and could have been referred to, if the need arose. Yet, ad agencies let go of these practices entirely, and then clients did not respect them either. How can industry norms be set again in a price-sensitive environment?

JAVED JABBAR: I had the privilege of proposing and drafting the framework for the first Minimum Production Tariff (MPT) adopted by PAA, which was circulated to advertisers and clients. This MPT set an industry standard, while greatly facilitating agencies in securing fair and rational compensation as well as fees for the content they produced. It was unfortunate that some agencies did not practice what they were publicly committed to, but that never weakened or invalidated the reality or requirement of MPT.

Even in more price-sensitive circumstances, like those that we are experiencing currently, better industry norms can be promoted and safeguarded if those at the helm at advertising agencies are committed to professional ethics and values. Also, advertising agency heads need to demonstrate leadership by engaging with clients with determination and confidence, while retaining their respect.

Music for Everyone

Sanna Malik

September 6, 2022

SANNA MALIK: What is Spotify’s business model for a price-sensitive market like Pakistan?

CLAUDIUS BOLLER: Looking at our structure, our Freemium model enables us to create value propositions at different stages in the user lifecycle. First, we introduced our free service to listeners in Pakistan and later, we layered the various subscription offerings on top of it. Users can subscribe to premium membership by linking their debit or credit cards to their accounts. Alternatively, we also provide the option to pay-by-mobile through exclusive local direct carrier billing partnerships with Jazz, Telenor, Zong and Ufone.

Once a user signs up, personalization begins on our platform. We ensure that our users get access to our service from any device they use throughout the day, which also increases engagement and retention. This leads to growth in our advertising business as well as higher average revenue per user. With the increase in engagement, we can increase subscription growth, whether it’s a free user who moves to our Individual Premium plan or Student plan or a Premium user who upgrades to Family and Duo plan. We also have Premium Mini in Pakistan, where users can pay upfront one with no auto-renewal.

This is how we increase our monetization and subscriber base over the different lifecycles of our listeners in the markets we operate in. With this risk-free approach for our users in Pakistan, Spotify creates a funnel toward setting up a subscriber base that will continue.

SANNA MALIK: For Pakistani customers, Spotify has fixed the price for an individual package at Rs. 299 for its premium version. How did you decide on this price?

CLAUDIUS BOLLER: We adapt our pricing to each market of operation. Before we launch, we do our due diligence to understand the habits, culture and ecosystem of any market we are about to enter. As a result, our prices align with local prices and expectations, and are optimized to grow the monetization for artists.

SANNA MALIK: What is Spotify’s USP?

CLAUDIUS BOLLER: We are building a platform that has all the ingredients to be one of the most innovative and creative platforms in the world. Spotify is built on three essential foundations that continue to differentiate us and drive our long-term strategy. We create a unique and exclusive listening experience for every user through personalization. With the advent of technology and constant innovation, we have developed some powerful recommendation algorithms in the world of audio, all working towards one simple yet hard thing – delivering listeners the right music at the right time. We like to say there are 422 million different versions of Spotify – every listener gets their own experience.

Our second differentiator is ubiquity. Our goal has always been to make Spotify available to everyone on any device. In the last four years, we have grown from a few hundred partners to over 2,000 with integrations spanning everything from wearables such as watches to cars and kitchen appliances. With 28% of all new registrations from these partners (up from 14% in 2018), ubiquity is a key driver of new users to our platform.

Lastly, our free, ad-supported tier combined with our premium subscription tier makes us stand out in the eyes of our listeners. By allowing listeners free access, Spotify builds a funnel towards establishing a large and growing subscriber base. We have been able to expand into new markets because of our low price of entry; over a span of four years, we have gone from 65 markets to 183.

SANNA MALIK: Spotify’s Monthly Active Users grew by 19% to 433 million across the world according to the Spotify Second Quarter 2022 Earnings Report. How did that impact earnings?

CLAUDIUS BOLLER: We are incredibly pleased with our performance in the first quarter of 2022. Our business exhibited strength and resiliency. Nearly all of our key metrics surpassed guidance, led by MAU and Subscriber outperformance and healthy revenue growth. Our revenues depict that we are deeply connecting with our listeners and achieving the objectives we’ve set for ourselves. For Q2 2022, our revenues grew by 23% year on year, amounting to €2.9 billion. Looking at the breakdown, premium subscription revenue increased by 22% from the previous year, with the total amount being €2.5 billion, while advertising-supported earnings stood at €360 million after growing 31% year on year.

SANNA MALIK: Tell us about Spotify Charts and based on what metrics do these charts get populated on Spotify Charts?

CLAUDIUS BOLLER: Spotify Charts is a distinctive offering that is powered by listeners themselves. It is a symbolization of the love and attention that fans pay to their favourite artists, serving as a medium to highlight how they connect with the music they love. As the music industry, especially in Pakistan diversifies, Spotify Charts aims to become an opportunity to celebrate melodies and artists touching the hearts of Pakistani fans. We generate the chart stream numbers using a formula that protects our charts’ integrity and ensures all users’ voices are reflected. This means that not every stream on Spotify is eligible for Charts. Depending on streaming behaviour, some songs may have few chart-eligible streams than others.

SANNA MALIK: What are SoundTrap, SoundBetter and Spotify for Artists services?

CLAUDIUS BOLLER: SoundTrap is one of our premium services that offers capabilities of a full professional recording studio in the cloud, giving artists a powerful way to collaborate. If you are a songwriter in Pakistan, you can lay the groundwork for a track and kick it over to a producer in Japan and finish it in real-time with SoundTrap capabilities. SoundBetter is a place for networking, where musicians, sound engineers and songwriters can come together for interactive collaborations and generate potential melodic masterpieces.

Spotify for Artists allows artists to manage their profile and get profound insights about their music and audience data, pitch new music to playlists and highlight key songs, concerts and playlists with Artist Pick. In addition to this, we have our Artist and Label Partnership team hosting several masterclasses explaining to artists how they can use this powerful tool to understand their fans better and have a successful career in music.

SANNA MALIK: How are these masterclasses conducted?

CLAUDIUS BOLLER: We host virtual and in-person masterclasses for artists. Masterclass events take creators through our artist tools and features to help them learn more about Spotify for Artists. In addition, we also answer any questions artists may have about Spotify and use the opportunity to showcase success stories from other markets that may inspire them in Pakistan.

SANNA MALIK: Pakistan’s music industry has always been in a questionable state, with musicians hardly ever able to make music their bread and butter in Pakistan (unless they achieve global fame). Does Spotify aim to address that in any way? How?

CLAUDIUS BOLLER: We believe in nurturing artists globally, and in every market where we are live. In 2021, recorded streaming revenue alone (across all services) was higher than the entire industry’s revenue from all forms of recorded music for each year (2009 through 2016). When the music business hit its low point in 2014, it generated $14.2 billion from all parts of the recorded industry (streaming, physical sales, sync, downloads, performance rights). In 2021, recorded streaming revenue alone exceeded $16.9 billion — with Spotify paving the way.

We paid music rights holders more money than ever in 2021: $7+ billion, up from $5+ billion in 2020. That’s more than double of what we paid out in 2017 ($3.3 billion) and represents a big part of the $30 billion we’ve paid to rights holders since our founding. Even adjusting for inflation, that $7 billion total is the largest sum paid by one retailer to the music industry in one year in history — including any single retailer at the height of the CD or digital download era. These figures depict an evolving industry where our platform plays a leading role in allowing artists to live off their art sustainably.

Our music teams’ strategies ladder up to two primary goals: making a unique and superior music experience for fans and creating a more open and valuable ecosystem for artists. Artists trust us and want to work with us because we help and take an active role in achieving their dreams and partner with them on thinking outside the box, working together to help them succeed through programs like Fresh Finds Pakistan and Equal Pakistan. We are unlocking the ability of any Pakistani artist to connect with listeners everywhere. Today, we have 422 million users worldwide, and the opportunities for Pakistani artists are tremendous. Furthermore, we provide a unique set of free resources that enable artists to get their music to right fans at every stage of their careers. And we’re also building solutions for artists and fans while growing new profit lines for artists and Spotify.

SANNA MALIK: What are Spotify’s plans ahead for the Pakistani market?

CLAUDIUS BOLLER: Our focus is to continue building our platform and make it a place that fosters innovation for both creators and listeners. Spotify is the world’s most popular audio platform and our goal is to continue leading the music revolution through the best in-app and offline experiences.

We have been in Pakistan for a little over a year and we are incredibly pleased with the opportunities we have unlocked in the market for local creators; from launching EQUAL Pakistan, a programme that highlights Pakistani women artists such as Arooj Aftab, Mehak Ali and Hadiqa Kiani to the world, to launching Charts – a curated performance indicator powered by fans. To bringing in Fresh Finds to the Indie creators, our efforts have always focused on giving users the best experiences and creating possibilities for creators to make a living off their art. Earlier this year, we partnered with Coke Studio as their official music streaming platform and also launched an official Coke Studio hub that kept our global listeners connected with Coke Studio’s classic and new hits from Season 14.

So, expect even bigger and bolder plans from us. More Pakistani creators will be celebrated on a global stage.

Claudius Boller joined Spotify in 2017 and has been instrumental in planning the audio streaming platform’s entry into South Asia. Boller boasts 20 years of strategy, commercial, and music industry experience covering a wide variety of sectors including technology, digital media, and entertainment. Previously, he was Vice President of Digital and Business Development at Universal Music Group, where he helped develop the company’s strategy in MENA and brought Dubai’s operation and business to life.

REVIVAL IN PROGRESS OR RIP?

Sanna Malik

September 3, 2022

Pakistan Advertising Association (PAA) was created by advertising professionals in 1973, to act as a representative body for Pakistan’s advertising agencies. The purpose of establishing the trade association was to give a voice to its member agencies and to align industry stakeholders to effectively deal with challenges faced by the advertising industry. This way, PAA plays the role of bridging the gap between different trade bodies including the key ones – All Pakistan Newspapers Society (APNS), which represents publications including newspapers and magazines; the Pakistan Broadcasters Association (PBA), which represents the electronic and digital media including TV channels, radio stations and online platforms; and Pakistan Advertisers Society (PAS), which represents clients or advertisers.

PAA has a strong history which includes hosting the first-ever Ad Asia held in Pakistan in 1989. The association stayed inoperative for over a decade, yet the advertising fraternity revived it again in 2017. There is still a long way to go for the association, as Sarmad Ali, President – APNS and Managing Director & President – Jang Media Group & Geo News says, “I strongly feel that PAA has to establish itself effectively and it needs to evolve into a stronger organization so that it can represent the advertising industry effectually.”

Establishing PAA

To establish PAA as an effective trade organization for the advertising industry, PAA office bearers do have their priorities. The current Chairman, Jamal Mir, who is also MD & CEO – Prestige Communications, highlights a number of areas that he feels need immediate attention.

“At the PAA, need to put our own house in order first. As a priority, I feel that the PAA Secretariat needs a tremendous upgradation to enable it to become more effective. These include one, appointing an effective Secretary General, well acquainted with advertising professionals and PAA stakeholders as well as other industry associations – someone who would be able to put our issues on the table and our stake in the ground. The second priority is to develop a team that is robust, responsible and responsive: meaning, we need the right members on board; we need a diverse representation from traditional, digital, and media agencies; we need a team that can pull its weight in terms of knowledge, experience, ideas and policy proposals towards driving a larger vision for this industry. At the same time, I believe we do need to define some rules and regulations that all of us will follow in terms of our working structure, and then perhaps divide responsibilities or assign specific committees so that we can be more focused on the end output.”

Beyond these, Mir’s priorities include developing selection criteria for advertising agencies that would want to be members of PAA. Back in the heydays of PAA, an agency would be gauged for membership eligibility based on its accreditation with APNS. According to Senator (r) Javed Jabbar, this would signify minimal financial stability and credibility of the agency in question. “The experience and reputation of the proprietors or the heads of agencies, along with the perception prevalent in the industry about the agency and its services would also play a role.” According to Mir, another specific requirement that was there back then was that agencies vying for membership must have five credible clients in their portfolio.

Currently, clear guidelines and criteria need to be developed and implemented so that only those agencies that fulfill set criteria are awarded PAA membership. If we want to be taken seriously as an industry, it is important that there is clear differentiation in terms of the kind of support PAA offers its member or prospective member agencies, versus those who do not fulfill the criteria to become PAA members.

Another important part of the PAA charter is defining the structure of the industry. It is important that proper business listings and documentations be done to ensure all businesses within the industry are available on a list that can be made accessible by PAA to the industry, other associations and stakeholders. To properly document the industry, it has to be structured in terms of full-service agencies, creative hotshops, allied creative services, suppliers etc. with businesses clearly identified according to the services they are providing. Again, it needs to be clearly defined which of these businesses will come under the PAA ambit with proper criteria laid out. In this case, advertising professionals are of the opinion that since our industry is in our infancy, only those advertising agencies, media planning & buying houses and PR agencies should be allowed to become members of the association that have similar business models, mode of work, requirements, challenges, industry stakes etc.

One other particular challenge that has been on the agenda of subsequent PAA chairmen as well as association members is protecting the financial interests of advertising agencies. This challenge is extremely multi-tiered with numerous problems along the way that have to be dealt with. From delayed payments where clients keep extending the credit period to agencies being blacklisted for not paying the media on time to clients switching agencies without settling pending bills of the previous agency, the issue continuously threatens the survival of advertising agencies, and while a payment mechanism is there, there is no surety that advertising agencies will get paid. On the other hand, the electronic and print media ensure that they are paid on time by agencies using the blacklisting mode of getting payments. Yet, the mechanism very easily falls apart when it comes to payments intended to agencies, which is to be done by clients.

Even though the issue cripples agencies’ operational capacity; they are divided on their individual interests on this one, and hence no blanket mechanisms have been derived from the industry body standpoint to get stakeholders to adhere to. A number of agencies have gone out of business over the years due to spiraling media and supplier dues. Although faulty business mechanisms as well as the price-sensitivity prevalent in the industry were also to blame, it was defaulting clients that put the last nail in the coffin for such businesses.

Mir sums this up with challenges that are a part of the agency-client partnership, “or more aptly the lack of it”. He says, “Some years ago, agencies and clients enjoyed a more symbiotic and partnership-based relationship. But now there is a stark inequality in the dealings between both parties. In fact, the industry has in part allowed itself to be demoted and discounted, thus lending clients an upper hand. This has led to constant pitching, delayed payments, unsuitable pricing and commissions, inadequate briefs or clarity on projects, and an unwarranted high handedness which goes well beyond the axiom ‘the client is always right’.”

Jabbar seconds him, “In price-sensitive circumstances, like those that we are experiencing currently within our industry, better industry norms can be promoted and safeguarded if advertising agencies heads are committed to professional ethics and values. They also need to demonstrate leadership by engaging with clients with determination and confidence, while retaining their respect.”

To deal with such challenges, it is important that there are policies devised at the PAA level that give blanket approval to the association to allow agencies to negotiate as an industry.

DEVELOPING INDUSTRY HR & ALIGNING STAKEHOLDERS

Yet, leadership is a learnt trait, and our industry has a major requirement to up-skill all those who make it the robust business that it is. According to Mir, advertising is a sophisticated knowledge-based profession and human resources are its biggest asset. Also, the requirement for up-skilling is not just limited to people in advertising, rather those representing the brand side need to be educated just as much on ad agency processes. “We also need to clear misconceptions about advertising agencies that get embedded in the client-agency interface and become a mindset issue.”

Qamar Abbas, Executive Director – PAS, seconds him, “PAS and PAA need to work on areas like standardizing the pitch process, developing skillful resources and making the business equitable for all partners.”

Currently, there is a major gap in terms of exchange of learnings within the industry; there are hardly any workshops – there were a number of them being held by PAS, yet ever since COVID-19 came about such sessions have been on the halt; plus there are hardly any documented knowledge resources online that the industry can access that can provide self-paced learning opportunities – again PAS has taken the initiative to provide local and international case studies and knowledge-based articles on its website, yet it may require a lot more effort to bring the industry’s talent at par with international standards, considering that the practitioners who need to be trained and motivated are across the board, at different points in their career.

Talking about PAA’s efforts back in the day, Jabbar highlights, “A major contribution to improving industry skills was the significant increase in interaction with advertising practitioners from other Asian countries and reviewing advertising of other countries. We did this by regularly participating in events such as AdAsia every two years and by arranging for periodic reviews within Pakistan. A number of agencies had affiliations with international networks so the process of observation and skill enhancement was already taking place within those agencies and their overseas networks.”

According to Mir, “We need to have more joint workshops with other bodies or cross-functional collaborations, where there can be discussions and engagement with advertising and branding professionals, especially those who have had international exposure; to inspire and inform those new to the field and those wanting to learn more.”

Compared to the rest of the industry, PAS is actually several steps ahead. Abbas points out that the society’s major focus is on trainings, workshops and conferences. Also they have paved the way for Pakistani agencies to participate in global competitions including the Cannes Lions International Festival of Creativity and Spikes Asia Festival of Creativity. “This serves as a great motivator and provides an amazing learning experience. We see these awards as another strong and well-established initiative that will help raise the standard of marketing communications and its practitioners. We have been successful in showcasing our work internationally and also aide in getting people from Pakistan to enter international jury’s, which in itself is a great learning experience”, says Abbas. “However, these are the areas where PAS is working alone and PAA’s collaboration will synergize our efforts as this benefits both, the clients and the agencies. Agencies need to understand that they need to step up the game and change the way they have been operating and see trainings and learning initiatives as investments. We can encourage advertisers to play their part, but they also need to see that agencies collectively are willing to make this investment. These efforts cannot be single-sided, and agencies need to show their commitment as well. I strongly feel that PAA can partner with PAS and play a crucial role in this area.”

It’s not just PAA and PAS that industry professionals want to see aligned and working together. Rather measures to take quality-enhancing initiatives will only work if all industry stakeholders are onboard to carry these out jointly. Also, if international standards are to be implemented, then it has to be done across the board by all trade associations, be it PAA, PAS, APNS or PBA. Sarmad Ali talks about an APNS – PAA joint committee that has been functional since the 80s, even though it has not been very active lately ever since PAA became inoperative. “We have been working very closely with PAA in the last few months and it is important that the committee collaborates to ensure proper systems are in place and the interests of the advertising community are safeguarded.” He further says, “I have also proposed a joint committee of the APNS, PBA, PAA and the Pakistan Advertisers Society (PAS), where they jointly address issues that are being faced by the advertising and media ecosystem.”

Abbas seconds him, “PAA is one of the most major stakeholders of the industry. If we need to raise the bar of marketing communications and focus on creativity and media innovation that leads to effectiveness, it is important that PAA and PAS work closely together. We need to firmly believe in partnerships rather than having a client-vendor relationship.”

CAN WE EXPORT OUR CREATIVE SERVICES?

Taking the discussion, a step further, since PAA, as an association representing the advertising industry has much to do to structure itself and the industry, is there any possibility that the advertising sector is represented internationally so that we can earn export earnings in the future? While this seems to be a long shot, yet there are steps that can be taken to promote our industry for the recognition that it deserves. Like Jabbar said, the interaction with advertising practitioners from other Asian countries was a major step in this direction. Yet it is important that the advertising sector is given due recognition by the Pakistani government first. He elaborates, “Advertising has a universal multimedia relevance. To give it the recognition it deserves within the government circles, it is important that it receives robust and sustained advocacy by PAA, by agency heads in their personal capacities as well as by advertisers, who have the biggest stake because it is their money and it is in their interests that advertising benefits from government policies. The media also has an obligation to promote such advocacy; rather media owners owe this to advertisers and ad agencies because they receive advertising revenue from them only.”

Talking about concrete steps that can get Pakistani advertising noticed in the international sphere, he says, “Commercial advertising has a direct connection with economic activity. Internationally, in whichever countries Pakistan’s other sectors including services, industrial or even agriculture; are already marketing their products, theoretically the opportunity is there to export the creative and professional skills of Pakistani advertising practitioners. What is important is that they should be able to maintain the level of quality and content relevance that is expected by that particular market.”

He further explains, “There are several examples of Pakistani practitioners with the capacity to create content that meets and even exceeds international standards and this has been recognized through the awards they have gotten, other successes achieved etc. So, in addition to any effort that a more empowered PAA can do, it is up to each export-oriented sector and export-oriented enterprise that has a goal to brand itself overseas, to provide the necessary opportunity and support to advertising agencies in Pakistan to produce creative content.”

A REALITY CHECK

PAA has a lot to shoulder, starting with building its own institutional capacity. Effectively safeguarding the interests of its members, aligning industry stakeholders and helping improve business volumes of advertising agencies does seem to be a rather long list of challenges that the association has to work on. In such a situation, it is on the association members to prioritize strengthening the industry over personal business interests by working collaboratively and collectively, taking constructive action and supporting shared goals which will help make the industry go a long way. A reality check by Jabbar very much summarizes what PAA and our industry is up against.

“I want to emphasize that advertising agencies are the most vulnerable part of the advertising chain since advertisers and media dominate and control that chain. It is only in long-established and stable economies that professional associations are able to sustain investment in building their own institutional capacity, and even they have their problems. Hence, during my time PAA did not – or was not able to – develop its own internal institutional and human resource capacity to be able to help improve the business practices or the business volumes of its members.”

Can the current PAA develop on learnings from the past and build itself up and the industry? Let’s wait, contribute and see.

Synergyzer’s Annual Edition is OUT!

Webdesk

September 2, 2022

Revival in Progress or RIP?

An indepth analysis on why PAA has failed to be an effective trade organization for the advertising industry so far?

Industry experts voice their opinions on what PAA needs to do to establish and evolve itself into a stronger organization.

Ahmed Jamal Mir, Chairman, PAA & MD and CEO, Prestige Communications, on how he wants to develop PAA as an effective trade organization for advertising industry
Senator (R) Javed Jabbar on what made the PAA the force that it was, the Pakistan Advertising Congress 1979 and AdAsia Lahore 1989
Sarmad Ali, President, APNS & MD and President, Jang Media Group & Geo News, talks about APNS’ relationship with advertising agencies and PAA
Qamar Abbas, Executive Director, PAS, talks about society’s efforts to uplift the creative quotient of the Pakistani marketing industry
Iram Tanweer, Director General, Press Information Department, on how PID is working to facilitate advertising agencies and media
Sabene Saigol, CEO, Red Communications Art, on the importance of investing in human resource development and the need for a credible industry mechanism

OTHERS

Tracking the Client-Agency Relationship – Marketing professional, Sunil Gupta, talks about the PAS Relationship – Tracker that measures and evaluates the performance of the partnerships between marketing teams and their agency partners.
Music for Everyone: Claudius Boller, Spotify’s MD for Middle East, Africa and South Asia, on Spotify’s success in Pakistan and how the platform plans to support and promote local talent
The Evolving Storyteller: Zaheeruddin Ahmed, CEO, ID Creations, about his first upcoming film ‘Chikkar’, the establishment of Dareechay Films and finding new paths
Driving Digital Transformation – Asif Aziz, COO, Jazz and Rizwan Fazal, Head of Marketing, Jazz, on their professional journeys, Jazz winning five Effie Awards this year, and policy interventions to accelerate the Digital Pakistan vision.

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Kenwood Introduces eSmart Plus, eLuxury Series

Huzaifa Gaba

August 30, 2022

Kenwood Introduces eSmart Plus, eLuxury Series

Kenwood, in the month of May, launched two campaigns: for their flagship air conditioner series ‘Kenwood eSmart Plus’ and the newly launched voice-controlled air conditioner ‘Kenwood eLuxury, with an aim to create awareness about their new features and how they are revolutionizing the air conditioner segment in Pakistan.

According to Sheeraz Faseeh, Marketing Manager, Kenwood, the company has been running the eSmart air conditioner campaign every year for the past five years and has even bagged awards for it, “however, the objective this year was to re-enforce the ‘top of mind’ recall for our flagship series through continuation of its clutter-breaking campaign.”

He adds that Kenwood has been the first brand to introduce a Smart air conditioner in the market with its eSmart series, which is currently called the eSmart Plus series. The USP of this air conditioner is that it can be controlled through your mobile via an app. Other than this, the air conditioner also comes with inverter technology. The energy efficiency ratio (EER) 4.0, is up to 75% energy efficient and has big indoor and outdoor units.

The brand believes quality and innovation have been the two key features of Kenwood air conditioners, which has made them stand out among the competition. The brand has always been associated with innovation in Pakistan’s air conditioner market, first by introducing smart air conditioners through eSmart series and now by recently launching their voice-controlled eLuxury series. “Another reason that people prefer Kenwood air conditioners over other brands is because the company takes care of the after-sales services by offering four-years PCB card warranty and ten-years compressor warranty to customers,” he says.

Due to the uniqueness of its offering, Faseeh says there are no direct competitors for Kenwood’s eSmart Plus air conditioners, however, they do see competition coming from Japanese and South Korean brands.

According to the brand, Kenwood air conditioners though are generally price competitive, there are certain series like eSmart Plus, which are priced slightly higher than competing brands because of their unique features. “Also, in recent times, due to inflation and a sharp rise in fuel prices, the price of all products, whether commodities or white goods, have gone up and remain unstable,” he adds.

The current prices for different variants Kenwood eSmart Plus conditioners are: Rs 117,000 for 1 Ton; Rs 175,000 for 1.5 Ton and Rs 205,000 for 2 Ton respectively. The brand’s target audience for air conditioners is SEC A and B.

For both eSmart and eLuxury series, the brand released 360-degree marketing campaigns across all mediums; news, entertainment, and regional channels as well as radio, digital, and OOH. There were two TVCs released for Kenwood eLuxury and one for eSmart Plus air conditioners and both campaigns featured Kubra Khan and Usman Mukhtar – the two actors who were earlier seen together in the popular HUM Network Production titled ‘Hum Kahan key Sachay Thay’, and were praised for their on-screen chemistry.

In the TVCs, the couple is shown in various domestic situations, which are relatable as well as funny and which lead to the product role and highlight the new features – similar to those showcased in Kenwood’s earlier campaign featuring Nawazuddin Siddiqui and Ayesha Khan.

Answering a question on why the brand did not choose the same couple for their recent campaign as well, Zaheeruddin Ahmed, CEO, ID Creations (the creative agency for the campaign), says Kenwood is not about a face or a celebrity but about a feel and mood. “Definitely Nawaz has got fan following and impact on a different level and we could do one more round with him, but apart from political reasons, we needed to eventually bring the change for the sake of the brand.”

According to Zaheeruddin, the duo was selected because they had recently done a drama together and were popular among the masses. “I was shooting a feature film with Usman and found him very versatile. When the scripts were written for the ad, we found him a perfect fit for this and they both did it very well,” he adds.

The response to the campaigns according to Zaheer and Faseeh has been amazing and very positive, because they believe people love simple and creative ideas, coupled with good performances. “They both pulled it off very well,” they agree.

The TVCs had the same viral effect that all Kenwood ads have had earlier. The results in terms of conversions and sales also reflect a positive upward trend.

As for their upcoming launches, Faseeh says the industry they operate in requires that they keep launching new products every year. Apart from the eLuxury air conditioner series launched this year, Kenwood has also launched another Inverter air conditioner series called eComfort Plus, that has introduced the gear change feature into the market, allowing customers to choose between three power options. In the refrigerator category, Kenwood has launched its inverter series refrigerators that are up to 60% energy efficient. The campaign for refrigerators was aired earlier in March, this year.

Going forward, Faseeh says there are many exciting plans in store for the brand. During the second half of the year, the focus shifts onto other categories like washing machines and kitchen appliances. Therefore, there are other activities the brand has planned which will be revealed in due time. Apart from this, Kenwood is also focusing on e-commerce. “We feel that online sales will be a big contributor to our sales in the coming future,” he says.

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REVIVAL IN PROGRESS OR RIP?

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Kenwood Introduces eSmart Plus, eLuxury Series

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