Draw from our experience: NASSCOM tells ad industry

Mobor: Two very similar industries. Both provide service, creative in nature. Both infested with people having big egos. And services provided by both the industries are most sought after by companies operating in highly competitive sectors. Yet, one is the pride of the country, contributing 5.2 per cent to GDP, and the other, contributing a relatively meagre 0.4 per cent, is debating strategies of survival.

The two in question, the IT industry and the advertising industry, came together at the GoaFest 2008 Advertising Conclave, being held at the Leela, Goa, so that the later can draw learning from the formers' success. ''We thought initially we could at least be almost as good as others globally. But, over time we realised, we are better,'' said Saurabh Shrivastav, ex-chairman, Nasscom on capability of Indian IT industry.

Problems plaguing the Advertising industry
Revealing that India is one of the most under-advertised markets, Ranjan Kapoor, WPP's Country Manager, India, said, ''The world average of the contribution made by advertising industry to GDP is 1 per cent and that in China it is as high as 2 per cent. Even among BRIC nations we are placed in last spot.'' Kapoor observed that the fact that the service industry contributes nearly 52 per cent to the GDP, and that they achieved all this with virtually no advertising, might have contributed to making India the most under-advertised market.

''There is a business opportunity emerging for ad agencies, but they are not proactive in tapping new areas. Instead, 20 agencies will fight over the same business, and as a result drop prices to unsustainable levels,'' he said. Though they are multi-million dollar companies today, they are still price driven. Of recent times these companies are experiencing margin pressures, hence they are feeling the need to develop their brands.

He said that until this year, there were differences between the Advertising Agencies Association of India (AAAI) and Ad Club Bombay, with both being unable to see eye-to-eye. Also, emerging areas within industry, like the digital form of advertising, is being perceived as a threat to existing forms and there is a tendency to alienate them. ''The problem is that the digital space is going to grow from $50 billion today, to $300 billion soon, and then they will form a break-away faction,'' said Kapoor. He called on industry stake holders to become more macro and start treating people who belong to the industry as part of the industry.

The 'Nasscom' way out
Sharing the Nasscom experience, and how the IT industry has today emerged triumphant from a similar situation some time ago, Saurabh Shrivastav, the ex-chairman, Nasscom said ''we were in a similar situation as you are finding yourselves in.'' Software was given no value, and was being bundled with hardware.

The industry, at this point, got together as a group and formed Nasscom, an independent body which was also inclusive. ''For example, we included the BPO sector when it started even though we were pre-dominantly software companies in Nasscom. It made Nasscom more accepted as an industry body, and the government also pays more heed when you represent the entire population,'' said Kiran Karnik, ex-president Nasscom.

''Nasscom also took up some key initiatives like educating the government on the business potential of the industry and a focus on expansion of the market,'' he added. As an industry body, Nasscom could think much better and wider than an individual company, and drew up a 10-year plan with a concrete road map to get there that involved the industry, the government and other partners in the ecosystem.

''We thought initially we could at least be almost as good as others globally. But, over time we realised, we are better. My message to the advertising industry is that it can be done. The entire global market can be looked to be tapped,'' concluded Saurabh Shrivastav.