Amin Rammal, Director – The Brand Crew, Firebolt63 and APR, talks about Pakistan’s advertising landscape and how it needs to make itself more noticeable as an industry.
Synergyzer: How has the ongoing fiscal year of Pakistan been for the advertising industry?
Amin Rammal: It’s been a very positive year for the industry. From consumer perspective, lower fuel prices and controlled inflation gives them the ability to increase their purchase power. From a business perspective; the lower interest rates help with their own spending while on the other hand lower fuel prices mean less cost of production which means better profit margins. This indirectly trickles down to the marketing side. New players have also come into the advertising environment. And as always, during the Cricket World Cup, spending on advertising increases.
Synergyzer: Do you believe that the political situation last year impact our industry?
Amin: The impact of the Dharna’s last year was that it affected media placements and there were a lot of dropages. Also affected were event management companies as they have their venue bookings, vendors lined up, payments to make etc. Depending upon the extent and length of the situation, law and order and political instability may be recovered from swiftly at a macro level. For example, activities can always be postponed and rescheduled, unless they are not time sensitive. On the other hand, recovery from structural changes maybe much slower; like changes in oil prices, interest rates, or fuel shortages, affect advertising in the long term as uncertainties put a halt on such expenditure and activities.
Synergyzer: What growth have you seen in Pakistan’s industries this year, particular advertising and media?
Amin: Overall growth seems to be consistent across industries. The financial sector is doing well as well as automotive, appliances and electronics sectors. The macro environment is stable and companies have shown good profit margins. We also see new segments coming in the market along with many SME’s. When the economy grows, you see a rise in advertising.
However, globally, spending on advertisement is usually a percentage of GDP. If you look at Pakistan’s advertising expenditure you’ll see that the advertising market is growing but it’s still underpenetrated in terms of advertising to GDP ratio. Currently, it is almost a quarter of the world average and half of the ratio in the lesser developed world.
Synergyzer: What needs to change to make the advertising industry a bigger part of the GDP?
Amin: Pakistan is a very price driven market. There has been a growth in the number of advertising agencies. More players mean competitive pricing. The extra weightage on the price factor results in controlled spending and the market doesn’t grow. Even though the quantum of work has increased but because of price competition, volume increase does not mean spending on the industry has increased. The advertising agencies and associations, as a part of one fraternity, needs to be a lot stronger.
Synergyzer: How has the advertising industry’s landscape changed?
Amin: The landscape has changed a lot. Today’s consumer is no longer limited to watching news on TV, read the newspaper, or listen to radio only. Digital media and brand activation are now important avenues of consumer interaction along with rural marketing which is growing through various business models. Hence, a diversified approach to advertising is a must. Although, TV still dominates adex, 30 second ads are no longer as impactful compared to the kind of interest advertisers and consumers show in good quality branded content.
Digital and social media has certainly flourished due to Pakistan being a predominantly young country. Facebook has driven the Pakistani market predominantly. We witnessed consumers using Facebook and certain other forms of social media which is why advertisers started looking at it as another medium. In the beginning, there was confusion about who is responsible for handling the social media or digital presence; brand managers, media managers, ad agencies or someone specialized? We now see everyone involved and digital is seen as an important medium.
Synergyzer: How do clients in Pakistan divide their media budgets between various mediums? Do you think digital is taking a significant share?
Amin: I don’t think digital has progressed enough to take a significant share. However, some multinationals are allocating as much as 25% of their budget on digital media. This mandate is the global practice so you can see a positive shift. Media budget allocation varies from client to client but majority is TV, then outdoor. Print also gets a prominent share while expenditure allotted to radio and digital is similar.
Synergyzer: In what areas do you think does Pakistan’s advertising and media industry needs to improve majorly?
Amin: There is a constant battle between efficiency and effectiveness due to which our industry lacks inventiveness. Our focus has always been on efficiency. If your focus is on ‘how can we do it cheaper’ then you’ll miss the point. For example, when creating artwork for billboards, the question is what will catch your target customers’ eyes more? The quality of our billboard creative has very low standards when compared globally. What we do here is we take a still from the ad campaign and just put it there treating both the mediums as if they were the same.
Then there arises the question of effectiveness in which research is integral. Where does your ad appear, when does it appear, does it have any relevance with the content etc. are all important factors to consider.
Another trend in our market is to have a high frequency of spots on TV. That is not the best route either as a recent research proves that after a set number of times, the consumer gets turned off by seeing the same ad repeatedly. It is important that we must, as an industry, become more innovative.
Synergyzer: How has The Brand Crew grown and kept its edge in the market?
Amin: Brand Crew has been in the market since 2008. I feel that our knowledge and offerings have grown over time. We’ve given progress to the industry and have grown as an agency. The industry grew when consumers started consuming digital a lot more. For example, with the introduction of Google, consumer was facilitated with the online browsing world. With the advent of LinkedIn, Skype, Facebook etc. things changed even more.
Brand Crew functions on the philosophy that the digital medium is a balance of technology and branding which includes content as well. Our focus has always been on customer experience and content which has earned us a distinctive edge in the market.
Synergyzer: What are the pros and cons of a retainer-based versus project-to-project business model?
Amin: When it comes to a retainer-based business model, stability is there and you can assign teams a lot more easily. Furthermore you also have the ability to define scope of work accurately. You can be a little more proactive in terms of planning; defining further scope of work for yourself on the brands you are dealing with etc.
In a project based business model, scope of work is usually predefined, more accurate and is more focused as you are looking at a particular angle. However, unstable cash flow is a major problem in a project based business model. So an agency needs to have a healthy mix.
Synergyzer: What role does international affiliation play for local agencies? Does it help enhance creative input in anyway? What are the risks?
Amin: I would say international collaboration, affiliation and networks are important. The passing down of best practices, knowledge, trainings etc. is valuable. Trainings and their success depends on the relationship between the local agency and the international affiliate. For example, if you invite a trainer from abroad, the cost of that trainer and the training itself is very high and someone has to bear that cost. So the question becomes; the local agencies or international affiliates?
Another factor in our environment is the ‘brain drain’. There’s a risk in sending your employee abroad for training because they may choose to stay on with the international affiliate. A similar threat could be that once that employee returns, they may seek another job with a competitor and the cost that the original company bore becomes useless.
Synergyzer: What are your plans for the next five years?
Amin: We would want to enhance the skill sets of our people. Also, increasing our learning in new technologies is our main focus. We realize content integration is very important so we will focus on that. Our market currently is very execution driven rather than planning and insight driven, with research being very underpenetrated in Pakistan. Hence we shall be focusing on fostering a more data and insights driven culture. So data, content and technology are part of our plans.
Also I believe that as an organization, you have to be very flexible and adaptable. We’ve seen traditional agencies struggling to be updated with new trends while somehow trying to maintain their legacy.