OFFICIAL HANDBOOK

for ADVERTISERS & ADVERTISING AGENCIES

The Advertising Agencies Association of India (AAAI) is happy to present the Official Handbook, in the hope that it will improve Client-Agency relations and minimise disputes, while satisfying the following aims : To scrupulously maintain high standards of ethical and professional practices between agencies, their clients, media and suppliers. To help advertisers to get the best out of their advertising and their advertising agencies. To provide guidelines for the above. Situations not covered by any guidelines or conventions may be referred to us.

CONTENTS

The Advertising Agencies Association of India

03 04 05 06 07 14 21 24 26 29

Objectives of the Advertising Agencies Association of India A Guide to Membership Standards of Practice Agency Service Standards

How to Choose and Appoint an Agency How to Avoid Disputes The Agency / Client Relationship How to be a Good Advertising Agency Recommended Art Charges

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THE ADVERTISING AGENCIES ASSOCIATION OF INDIA

The Advertising Agencies Association of India (AAAI) functions through the active, voluntary services of a President, a Vice-President, an Honorary Secretary, an Honorary Treasurer and an Executive Committee assisted by a full-time Secretariat which is located at 35 Maker Tower 'F', 3rd Floor, Cuffe Parade, Mumbai 400 005. Conventionally, a very senior agency person represents each member agency in the AAAI. The President and other office-bearers are elected every year by the General Body, which comprises all representatives of member agencies. In addition, some Executive Committee Members are co-opted to the Executive Committee and an effort is made to ensure that all zones and groups of agencies (by size) are represented on this Committee. Assisting the above groups are various Sub-committees, each looking after specific activity areas of the Association and Regional Conveners who co-ordinate members' activities in different regions of the country. The Executive Committee, the Regional Conveners and various Sub-Committees meet very regularly and information is constantly shared with all members. Currently the Sub-committees are: 1] Advertiser Relations 2] Business Practices 3] Client-Agency Reconciliation 4] Constitution Review 5] Continuing Education 6] Creative Awards 7] Electronic Media 8] Finance & Legal 9] Government Relations 10] Media Research 11] Membership Development 12] Print Media 13] Promoting AAAI Brand 14] Visioning Exercise The AAAI is thus a true association, in the sense that nearly half of all members are directly involved with one or more of the active committee groups and the remaining members are in touch through direct communication. As a national organisation of advertising agencies, the AAAI promotes their interests so that they continue to make an essential and everincreasing contribution to the nation by working towards the following objectives:

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OBJECTIVES OF THE AAAI

1] To benefit Indian consumers and protect their interests by helping ensure that advertising is honest and in good taste. To benefit Indian advertisers by promoting their sales, increasing profitability and productivity, to stimulate business and industrial activity. To benefit media by establishing sound business practices between advertisers and advertising agencies and each of the various media. To benefit the nation by harnessing advertising for the good of the country, its institutions, its citizens to co-operate with the Government in promoting its social objectives and nation-building. To question advertising that is wasteful and extravagant, to make it possible for the small entrepreneur to grow through advertising and to compete with the biggest; to encourage market and media research; to serve society by meeting its social responsibilities. To encourage the interest of the youth in the business of communication, to assist in educating and training programmes, and to provide information for the benefit of its member. 7] To establish a common platform, sustaining the prestige of the advertising profession and to serve as a spokesman against unwarranted attacks or restrictions on advertising. To establish a forum where representatives of advertisers, agencies, media and Government can meet on mutual ground and examine problems of mutual interest. To offer effective co-operation and liaison with Government officials and bodies for the purpose of broadening their understanding of the role of advertisers, advertising and advertising agencies.

2]

8]

3]

9]

4]

5]

10] To co-operate with Government bodies in discussion of such matters as taxes, radio & TV advertising, legislation, political campaign advertising, controls on pharmaceuticals, tobacco or liquor advertising and other subjects of similar complexity and sensitivity.

6]

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A GUIDE TO MEMBERSHIP
The Advertising Agencies Association of India comprises of agencies that are large, medium, small and tiny. It is not the size but the quality of the agency that is important. And so this Guide is set out to describe the kind of agency that may aspire to membership of the Advertising Agencies Association of India. The kind that is most likely to develop the advertising that advertisers should be getting advertising that succeeds because its honest, truthful, in good taste and does the job at the lowest possible cost. Such an agency should be independent, unbiased and objective; should be committed to advertising; should offer professionalism and expertise; should be ethically operated; and should be soundly financed. Only such an agency can fulfil its obligations to consumers, advertisers and media. QUALIFICATIONS FOR MEMBERSHIP 1] Method of Application Each applicant is required to fill in the appropriate application form obtainable from the Association and such application should be duly proposed and seconded by any two members of the Association. 2] Size of Agency The size of volume of business in itself of any applicant is not a factor in determining qualifications for membership. 3] Location of Agency The geographical location of the head office or the registered office determines the zone of the agency. 4] Age of the Agency No agency may be considered for election as a member of the Association unless it is recognised by media owners and has been operating as such for a minimum period of one year. 5] Ownership The applicant agency must show that it is directly and indirectly independent of and not maintained by any one advertiser or a group of advertisers and/or is not organised for the purpose of obtaining agency commission for any one advertiser or a group of advertisers. 6] Ability Advertising ability varies with individual talent need. It is difficult to standardise. Nevertheless sound judgement regarding the applicant agencys ability can and may be formed after studying its method of operation and the work produced for client. 7] Financial Stability Applicant agency has to satisfy the Association regarding its financial stability and healthy payment policy. 8] Contracts a] The Advertising Agency should confirm to its agreement with media. b] No applicant shall be deemed worthy of membership who has failed to fulfil its lawful contractual commitments. 9] Scope of Agency Services Ability to render service in reasonable conformity to the agency service standards of the Advertising Agencies Association of India is a consideration in determining fitness for membership. 10] Ethical and Business Standard While it is not important to know the applicant agencys form of organisation in all of its details, or all of its operation, it is essential to know it operates in relation to certain practices by the Association to be unfair practices in the light of the obligation agencies have not only to their client but to the media they employ, to the public and to each other.

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STANDARDS OF PRACTICE

OBLIGATIONS TO MEMBERS 1] Every member of the Association is expected to carry on his profession and business in such a manner as to uphold the dignity and interest of the Association. 2] Every member must refrain from canvassing advertisers or prospective advertisers in such a way as to reflect detrimentally upon Advertising Agents as a whole or this Association or any Advertising Agency in particular. 3] Canvassing is permitted subject to the condition that a member may make known to the client of another member its own capabilities as an advertising agency but may not submit a specific report or detailed recommendations concerning the clients advertising unless so requested by him in writing. 4] No member shall pay or undertake to pay or allow to an advertiser or his agent or representative, the whole or any portion of the standard rate of commission resulting or to result to such member from any advertising medium nor promise or procure or undertake to procure advertising space or facilities free of charge to any advertiser, or at a reduced rate, nor supply, nor free to any advertiser, any advertising material, including finished drawings, or other artwork, photography, blocks, stereos, matrices or the like, type-setting or printing nor defray in whole or in part the salary of any employee of an advertiser, nor grant any allowance, discount or the like nor render any service having the effect of rebating the commission allowed by an advertising medium. The sharing of commission with a member or agency, or with another advertising agent, recognised agent by this Association, shall, however be permitted. 5] The practice of submitting a speculative campaign is unhealthy to the growth of the advertising industry and that no member shall submit a speculative campaign to any advertiser. By speculative campaign, it is meant, producing a campaign unsolicited or voluntarily by any member agency and equally producing a campaign where the advertiser had requested one or more advertising agency to do so, unaccompanied by a firm offer of business. The Executive Committee is hereby authorized to frame the Mandatory Pitch Fees Guidelines and Rules which may include punitive action against members not following the said Rules,

for implementation by members so as to ensure smooth compliance by its members, after due consultation with members, which Rules could further be revised by the Executive Committee of the day, based on experience gained on implementing the said Rules. 6] Any member relinquishing an account on the ground of slow payment, doubtful credit or incurring a bad debt, shall immediately notify the Secretary of the Association and such information shall be circulated in strictest confidence for information and protection of other members. 7] No business shall be accepted which is conditional upon the payment of commission or fee or reward to a third party not a full time employee of the member either for introducing the business or for services in connection with the account hereafter. This rule, however, shall not preclude a member from employing copywriting or production men at fees commensurate with the values of their work. OBLIGATION TO CLIENTS 1] Member or agencies must continue to render full agency service in reasonable conformity of the Associations Agency Service Standards. 2] Member must retain either commissions granted by media owners, suppliers or material and services, or charge the clients a service fee which shall never be less than 15% of the clients gross expenditure. Nor shall they supply material for advertising on any basis that can be considered as direct or indirect or secret rebating. Where no commission is allowed by the media owners, suppliers or materials and services, the member will charge his clients a minimum of 15% on the gross cost or 17.65% on nett. 3] Member will not accept discounts or commission, other than the regular agency commission allowed by publishers without the clients knowledge and consent. 4] Members must at all times use their best efforts to obtain for their clients the lowest rates to which such clients are entitled. Members will not give clients any discounts whatsoever, including cash discount for early and/or advance payment, and any member/s found to breach this rule, may be put on Notice/ Expelled/ Suspended from being a member/s at the discretion of the Executive Committee.

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OBLIGATION TO SUPPLIERS 1] Members shall take all steps to assure themselves as to the financial soundness of their clients. OBLIGATION TO FELLOW AGENCIES 1] Members are required to use fair methods of competition; not to offer the services enumerated above or services in addition to them without adequate remuneration or extensions of credit facilities or banking services. 2] Members shall neither prepare nor place any advertisements, in any medium which: is knowingly a copy or a plagiarism of any other advertisement of any kind whatsoever; makes attacks of a personal character, or makes uncalled for reifications on competitors or competitive goods. is indecent, vulgar, suggestive, repulsive or offensive either in theme or treatment;
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AGENCY SERVICE STANDARDS

Agency service shall consist of : 1] A study of the product or services in order to determine the advantages and disadvantages in the product itself, and in its relation to competition. 2] An analysis of the present and potential market for which the product or service is adopted. as to location; as to extent of possible sale; as to season; as to trade and economic conditions; as to nature and amount of competition; and as to social conditions. 3] A knowledge of the factor of distribution and sales and their method of operation. 4] A knowledge of all the available media and means which can profitably be used to carry the interpretation of the product or service to the consumer, wholesaler, dealer, contractor or other factor. In case of the Press, this knowledge covers: Character : Influence : Language : Circulation : (Quantity) (Quality) (Location) Physical requirements Costs : :

objectionable medical advertising and an offer of free medical treatment; advertising that makes remedial, relief, or curative claims, either directly or by inference, not justified by the fact of common experience; a product, known to the member to contain habit-forming or dangerous drug, or any advertisement which may cause money loss to the reader, or injury in health or morals or loss of confidence in reputable advertising and honorable business or which is regarded by the Executive Committee of the Advertising Agencies Association of India as unworthy. In the event of a member proving to the satisfaction of the Executive Committee that a client has withdrawn his account on the ground of the members refusal to undertake unethical advertising (as described above) no other member shall accept any business whatsoever from the said client.

concerns

In the case of other media, a knowledge of the same factors are interpretable in the case of each one.

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5] Formulation of a definite plan. 6] Execution of this plan :

Writing, designing, illustrating or advertisements or other appropriate forms of the message. Contacting for the space or other means of advertising. The proper incorporation of the message in mechanical form and forwarding it with proper instructions for the fulfilment of the contract. Checking and verifying of insertions, display or other means used. The auditing, billing and paying for the service, space and preparation.

2] The success of advertising depends on public confidence. Hence no practices should be permitted which tend to impair public confidence. The following rules of conduct have been laid down for international observance in order to counteract possible misuse of advertising and to promote a further development of the sense of responsibility on the part of advertisers towards the consumer. Responsibility for the observance of these rules rests with :

the advertiser on whose account the advertisement is issued; the advertiser or agent who has created the advertisement; and the publisher or medium contractor who publishes or distributes the advertisement.

7] Co-operation with the clients sales work, to ensure the greatest effect from advertising. CODE OF STANDARDS OF ADVERTISING PRACTICE Rules of advertising vis--vis the customer Motivating principles of the rules 1] As part of the system of free enterprise and of our system of distribution, satisfying customers' needs and comforts, advertising has a social responsibility towards the customer. Advertising is an important and legitimate means for the seller to awaken interest in his goods and services. In this process, some practices of the seller may at times be opposed to the rightful interests of the community. Wherever a conflict of interests arises, the interest of the public should, first and foremost, be protected.

Individuals in each of these grounds should exercise responsibility as they may properly assume, to make certain that the rules of conduct are observed.

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Rules of conduct 1] Advertising should be so designed as to conform not only to the laws but also to the moral and aesthetic sentiments of the country in which it is published. 2] No advertisement likely to bring advertising into contempt or disrepute should be permitted. Advertising should not take advantage of the superstition or credulity of the general public. 3] Advertising should tell the truth and avoid distorting facts and misleading by means of implications and omissions. For instance, it should not mislead the consumer by false statements as to :

Advertisements addressed to those suffering from illness. No such advertisement should hold out the promise of cure for serious disease, nor contain any statement calculated to injure the health of the sufferer by dissuading him or her from seeking a medical advice or otherwise. Advertisement inviting the public to invest money. Such advertisement should not contain statement which may mislead the public in respect of the security offered, rates of return or terms of amortisation. Advertisements inviting the public to take part in lotteries or competitions with prizes, or which hold out the prospect of gifts. Such advertisement should state clearly all the conditions for the lottery or competition, or the conditions for the distribution of the gifts.

The character of the merchandise i.e. its utility, materials, ingredients, origin, etc.; The price of the merchandise, or its value, its suitability or the terms of the purchase; The services, accompanying purchase, including delivery, exchange, return, repair, upkeep, etc.; Personal recommendations of the article or service. Testimonials which are fictitious or the originals of which cannot be produced must not be used. Any one using testimonials in advertisements is as responsible for the statement made in them as he would be if he had made them himself; The quality of the value of competing goods or the trustworthiness of statements made by others.

RULES OF ETHICS BETWEEN ADVERTISERS Motivating principles of the rules The principle of fair competition as generally defined and accepted in business should be applied to advertiser. Rules of conduct 1] Methods of advertising designed to create confusion in the mind of the consumers as between goods are unfair and should be renounced. Such method may consist in :

4] No advertisement should be permitted to contain any claim so exaggerated as to lead inevitably to disappointment in the mind of the consumer. Special care is called in for the case of :

the imitation of the trade mark or name of the competitor, or the packaging or labeling of goods; or the imitations of advertising devices, copy, layouts or slogans.

2] Advertising should endeavour to gain the goodwill of the public on the basis of the merits of the goods or services advertised. Direct comparison with competing goods or firms should be avoided and disparaging reference in no circumstance is permitted.

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RULES OF ETHICS GOVERNING ADVERTISING AGENCIES AND MEDIA Motivating principles of the rules The development of sound advertising depends upon the good relations existing between all sections of the advertising business, and no practices should be permitted which tend to impair such good relations. Rules of conduct 1] Advertising agencies and media should avoid disparagement of their competitors. 2] The accepted regulations governing the agency business in any country should be strictly observed by every agent doing business in that country. 3] Misleading or exaggerated statements to an advertiser concerning the carrying out or probable effect of a campaign should not be permitted. 4] The purchaser of advertising in any publication or other media is entitled to know the number, general character and distribution of the persons likely to be reached by his advertisement and to receive genuine co-operation in this respect from media. 5] A clear and full statement of the rates and discounts applicable to various classifications of advertising should be published by every medium and adhered to. MEDIA BUYING/ AGENCY OF RECORD [AOR]
Principles of media buying in India. In the mutual long-term interest of AAAI member agencies, advertisers and media - and to provide a clear, transparent and equitable method for all member agencies to follow in their dealings with their clients.

The General Body of the AAAI adopted the following on Monday 31st August 1998: 1] Principle of full service agency Membership of AAAI is based on the basic principle that members are full-fledged advertising agencies that offer integrated services such as strategic planning, creative development and execution, media planning and buying etc., to their clients. AAAI members are not expected to act only as strategic consultants, or only as creative studios, or only as film producers, or only as media buying houses, as per AAAI rules. Historically, some clients who work with more than agency, have for the purposes of better centralised coordination and greater efficiencies, been entrusting their total media buying and releases to one of their club agencies. In such cases, where an advertiser has multiple brands being handled by different agencies, it could be in the interest of the advertiser to entrust the media planning/buying/releases to one of its club agencies for the following possible reasons: Coordination in media planning and media selection among each of its brands; Coordination in scheduling of releases among each brand; Greater cost efficiencies based on total advertiser spend in individual publications/ channels/ programmes, etc.

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2] Offering of media only services Over the last few years, a few member agencies were offering media only services. After examining the implications of this recent development with respect to its impact on the advertising agency business as a whole, and also as to whether it is in the interests of advertisers and media in the long term, the AAAI came to the conclusion that this development was not in the long term interests of advertising agencies advertises and media, for the following reasons: The raison dtre of an advertising agency is to add value to a clients business by harnessing and orchestrating internal and external resources on a continuous basis, thereby providing an integrated solution. Strategic planning, creative development and media planning are individually interlinked. Without the development of a strategic plan, it would be impossible to go ahead with creative execution. Without knowing the size of an ad, its placement, its frequency of release, etc. it would be improper to go ahead with creative development. And vice versa. Therefore, the offering of a media only service by an agency, who is otherwise, not involved with any of the other clients brands, will dilute the value that advertising agencies are expected to provide to their clients.

The advertiser is not likely to benefit by separating the media function from all the other functions that an agency is expected to perform, for the simple reason that the principle of single accountability is totally violated. Great strategic thinking and great creative can be nullified by poor media planning and execution. And vice versa. The advertising agency is expected to be fully responsible for its strategic inputs, creative execution and media planning. Breaking up these interlinked functions would lead to dilution of responsibility and accountability. It is in the long term interests of advertisers that media offer them transparent rates based on the individual advertisers spend in respective publications/channels, etc. Larger the advertiser spend in a medium, larger the savings. It is equally in the interest of media that rate negotiations be on the basis of individual advertiser spend, rather than that on the basis of agency spend. Therefore it was recommended that the practice of members offering media only business be stopped. Members who were engaged in this business were given sufficient time to wind up this operation, so that their current commitments were not hampered. Before drafting the resolutions, care was taken to have a detailed discussion with many of the members who were then offering media only services, and the majority of such members were in agreement with the proposed resolution.

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3] The advent of media independents In recent years, there has been the advent of Media Independents in India as well. After having delved into the implications of what had been the impact of media independents in other parts of the world the General Body of the AAAI gave their considered attention and came to the conclusion, that all the reasons that went into recommending that a media only service offered by an agency was not in the overall interests of agencies, advertisers and media, and applied fully to media independents as well. Over and above, worldwide experience had shown that left to operate freely, just a few large media independents survive. These, by their very size, tend to become monopolies or cartels who dictate rates to advertisers and to media. Free market operations thereby get curtailed. Neither the advertiser gets maximum cost efficiencies, nor does the media get its justifiable revenues. RULES GOVERNING MEDIA BUYING/ AGENCY OF RECORD [AOR] The definition of Agency of Record [AOR] is as follows: 1] The AOR of an advertiser is one of the advertising agencies of the advertiser, who offers full advertising services including account planning, creative and media for at least one brand of the advertiser [brand means and includes any business segment of an advertiser either in part full] and 2] Is entrusted by the advertiser to handle media buying and media releases for some or all of the advertisers brands. An advertising agency can act as an AOR for an advertiser only upon fulfilment of all the following conditions: 1] The agency has been appointed by the advertiser as a full service agency for one of its brands, and has actually created and released advertising for such brand.

2] For an advertising agency who has been a full service agency of the advertiser for less than one year, the media billings of the brand/s handled by the agency during the six months after its appointment as an AOR for the advertiser, shall not be less than 10% of the advertisers total spend, or Rs. 50 lakhs, whichever is less, during that period. 3] For an advertising agency which had been a full service agency of the advertiser for more than one year, the media billings of the brand/s handled by the agency during the pervious financial year, prior to its appointment as an AOR for the advertiser, shall not be less than 10% of the advertisers total media spend, or Rs. 1 crore, which ever is less, in the previous financial year. 4] The advertising agency may continue to act as an AOR in subsequent years only if the media billings of the brand/s handled by it on a full service basis are not less than 10% of the advertisers total media spend, or Rs. 1 crore, whichever is less, in the previous financial year. The remuneration principle for an AOR is as follows: 1] For the services rendered in the areas of media buying and media releases, the AOR will earn 2.5% media commission on releases made by it for brands which are handled by other advertising agencies of the advertiser. The other advertising agencies will earn 12.5% commission. 2] The AOR will be responsible for raising media bills, collection of media dues from the advertiser and payment to media. 3] The other advertising agencies of the advertiser shall be paid the 12.5% commission on media releases for brands handled by them, directly by the advertiser.

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4] The AOR will provide not later than the end of the following month to the other advertising agencies, a statement which clearly indicates the other advertising agencies commission entitlement for the preceding month for various brands. In case an advertising agency operates on the basis of a fee system, the basis of remuneration shall be as follows: 1] In the event that the agency is responsible for acting as full service agency, including media buying and releases, such fees should not amount to less than15%. 2] In the event that media releases are undertaken by another agency acting as an AOR, such fees shall not be less than 15%, including that paid to AOR. 3] Agencies operating on a fee basis will raise supplementary debit/credit notes at the end of each financial year to ensure that their earnings from media equals 15%. 4] Agencies operating on a fee basis with any of their clients, will inform the AAAI of the same along with a declaration that they adhere to the principle of 15%. The Executive Committee of the AAAI is authorised to take disciplinary action against any member for violation of these rules, including recommending expulsion to the General Body, if it deems fit. These rules came into effect from the 1st of January 1999. AAAI rules relating to Arbitration Based on the recommendation of the Legal & Constitution and Client-Agency Reconciliation Committees, there was a need felt to have a provision for arbitration by the AAAI in cases of disputes between member agencies and their clients, as well as, inter se, among members of the Association the General Body of the AAAI unanimously adopted, on Monday 31st August 1998, the following rules pertaining to Arbitration which now form part of the Memorandum of Association and Rules & Regulations and are to be read as Clause 68 A&B.

Arbitration between Members and their Clients All disputes and/or differences and/or questions which shall arise between a member agency and his client arising out of or pertaining to an agreement between such member/its client may be referred to the Association by either of the parties. The Arbitration proceedings shall be conducted in accordance with law for the time being in force. The venue of the Arbitration shall be Mumbai or such other place as the disputing parties may agree upon. Arbitration between inter se amongst Members All disputes and/or differences and/or questions that may arise out of or pertaining to the bye-laws of the association or pertaining to questions of importance to the trade or of any nature whatsoever between any two or more members shall be referred to the Association for Arbitration. To invoke this clause, either of the parties to the dispute may make a representation to the Association of any such disputes/differences or questions that have arisen between them. In the said representation the member(s) concerned shall express its/their desire to have such disputes, differences or questions referred to a sole Arbitrator or more Arbitrators. The Arbitrator(s) shall be appointed by the Association within 30 days of receipt of the representation. The appointment of Arbitrator(s) shall be made by the Executive Committee of the Association, subject to the acceptance of the Arbitrator(s) of all the parties to the dispute. The Arbitration proceedings shall be conducted in accordance with the law for the time being in force in India. The venue of the Arbitration shall be Mumbai or such other place as the disputing parties may agree upon.

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HOW TO CHOOSE AN AGENCY

An Advertising Agency should be chosen purely on its merit and value to your company as a professional consultant experience in advertising matters. It should be chosen for no other consideration but its ability to deliver just the right advertising your company needs, at the right cost to you. Advertising is deceptively simple-looking. The more a products sales depend on advertising, the higher are the stakes. Good advertising can improve sales and, in effect, improve your competitive stance. It attracts better personnel, creates more profits, higher salaries, more employment, provides for diversification and protects your entire investments in the company quite apart from projecting a better image of your company. You need a good professional advertising agency to grow with. The Right Personnel A good agency may be large, medium small or tiny but it will invariably be built on professionalism. What kind of professionalism should you look for? The most important function of any agency is to prepare advertisements in various forms to communicate the advantages of a product or service to its potential customers, specially under conditions of competition in the market. (See Agency Service Standards). It is advisable to select an agency that has the personnel who are capable of doing so. Such personnel must be professionals with expertise and experience in:

Creative: Planning creative strategies for a product, which are then converted by a copywriter and a visualiser into various advertising materials needed : Press ads, folders, literature, posters, audio-visuals, commercials for TV, cinema and radio, hoardings, banners, etc. all produced under good technical supervision. Media: Planning the media strategies to ensure that the communication created will get suitable exposure through the most suitable media to the right target audience at the right cost considering always the competition in the market. Since the advertising budget depends on the sales target, the agency should be able to advise on the right budget allocated for the advertising a figure which is (a) not too high (which is a preventable waste of advertising money) or (b) not too low (which cannot achieve its results) or (c) adequate, but spent unwisely, due to a faulty media plan. Marketing: Experts who can interpret marketing aspects (such as pricing, distribution, dealer margins, competition, brand images, etc.) and who can suggest one of many available techniques and marketing tools.

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HOW TO APPOINT AN ADVERTISING AGENCY

Once you have chosen an advertising agency you should consider it as part of your organization or term. But first you are advised to issue to your advertising agency a letter of Terms & Conditions of appointment. This is most important to enable your agency to act on your behalf. (Please see page 13 for a draft of the Agreement). Information for new advertisers 1] When briefing your agency be sure to be thorough, clear and give full details with DOs and DONTs, if any. 2] The first ideas for a campaign from your agency come to you in rough form i.e., as words (Called copy) and a rough scribble (Called layout) of the advertisement. Please examine both carefully so that when you give your approval (Preferably by signing) the agency can assume that the layout and the copy are correct and on that basis proceed to the next stage. 3] Once the layout and copy are approved, the next step is preparation of the artwork; again please ensure that the words and the pictures are 100% correct. 4] Insist on an estimate for all expenditure, except where it is obviously considered unnecessary i.e., which are at fixed prices. Please sign all estimates. 5] All artworks, blocks and mats become your property when paid for you. It is usual to store them with the agency for convenience, specially when used regularly. However, the agency may not be held responsible for them if newspapers, printers, etc. do not return them after use. Their non-return can be overlooked. You must see all copy, layouts and also block proofs and printers proofs and check for correctness before approval. Once approval is given by you, either verbally or in writing, the agency not be penalised if any mistake is discovered in an artwork or proofs previously okayed by you or your representatives. The agency will take all possible care to prevent errors but you are advised to check every artwork, block proof, etc. and sign it as a token of your having seen them. The final responsibility is yours. 6] When ordering printed material please remember that printers or agencies cannot give you an exact number of copies and their supply against your print order could vary by at least plus or minus 10% which should be accepted by you.

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TERMS & CONDITION OF APPOINTMENT

AAAI member agencies work on the following standard terms. To ensure legal protection, both to the advertiser and to the advertising agency, the following Agreement should be set out on a Rs. 20/- stamp paper. Agreement This Agreement, made at (Place) BETWEEN (Name of the Client) a Company having its registered office at (Full address of the Client) hereinafter referred to as the Client (Which expression shall include its successors and assigns) of the One part, AND (Name of the Agency) a public limited company/ private limited company/ partnership firm/ proprietary concern, having its registered office at (Full address of the Agency) hereinafter referred to as the Agency (which expression shall include its successors and assigns) of the Other part. WHEREAS the Client is desirous of appointing the Agency as their Advertising Agents for the purposes of advertising and promotion of their product(s)/service(s): AND WHEREAS the Agency is willing to act as the Advertising Agents of the Client in respect of the abovementioned product(s)/ service(s), it is hereby agreed as under 1] Clients Approval Estimates for all services to be rendered, including the placing of advertising with Publication, Radio/TV Stations and Outdoor sites will be submitted for the written approval of the Client and returned to the Agency as authorized to incur liabilities on behalf of the Client. The Agency will progress jobs after formal approval of Estimates. The copies of all signed estimates will be returned to the Agency. In the absence of a signed and approved estimate, letters/ minutes of meetings to confirm the placement of advertisements in any media will be treated as an official sanction and authority from the Client to incur liability on their behalf unless the Client intimates the Agency to the contrary in writing. Cancellations or revisions requested for by the Client will be subject to the terms and conditions of the contract/ orders originally placed or signed. All advertising messages released on behalf of the Client must be approved by authorized members of the Clients organization. The Agency shall abide by the rules and regulations of INS, AAAI, ASCI, IBF, DD, AIR and other allied organizations and must ensure that each advertisement released by them on behalf of the Client is honest, truthful and conforms to legal requirements. Therefore, all copy matter before proceeding with execution/release will be submitted to the Client for approval and while according approval, the Client will also ensure that it complies with legal and technical requirements. In the view of the aforesaid, it follows that the Client will indemnify the Agency and keep them indemnified at all times against any loss incurred by the Agency arising out of any claim and/or proceedings initiated against the Agency for releasing the Clients advertisements. If the material approved by the Client is released to media or duplicated according to their instructions and then found to contain errors or omissions the Client shall agree to bear media charges or duplication charges as the case may be. Apart from the standard 15% commission, the Client shall pay the Agency development, creative, design and artwork charges at mutually agreed rates as well as bear the cost of blocks, matrices, negatives, positives, proofing and all rejected mechanicals, and the Agency will retain the 15% commission granted by such suppliers.

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2] Contracts & Orders The Client shall accept the responsibility for all contracts entered into and orders placed by the Agency on its behalf. The Agency shall be entitled to 15% as Agency commission on the gross amount of all the bills in respect of advertisements from the publishers, All India Radio, Doordarshan (TV), Printers, block makers and other suppliers. Wherever Agency Commission is not allowed to the Agency by any media or supplier, the Agency shall charge an extra amount of 17.65% of the net cost from the said Client as compensation in lieu of Agency Commission. In the possible event of the Client choosing to place an order directly with a Printer, the Agency reserves the right to decline to design and prepare the relevant artwork. However, should the Agency agree to do so, the Client accepts that the Agencys charges in respect of such work will be higher than the Agencys usual design and artwork charges. 3] Billing Rates Media Charges All charges for advertising shall be billed to the Client at the regular rates as published, unless less than 15% commission is allowed to the Agency. If less than15% commission is allowed to the Agency, the Client shall be billed for the difference between what is allowed and the regular 15% commission. In case the Client does not use space entitling a contract rate, the Agency will bill for the difference between the contract rate and causal rate. Charges for Other Items All Talent (for press, radio, TV, cinema, etc.) shall be billed to the Client at cost plus 17.65% as Agency Commission. Advance payment shall be made by the Client wherever so stipulated/required.

to time for their reference. Under normal circumstances, all artwork charges shall be billed to the Client in accordance with these guidelines. As and when necessary, the Client may request that an estimate of artwork charges be submitted for approval prior to the commencement of a job.

Administration Overtime for urgent jobs, freight, postage, packing and any transportation/insurance charges involved in sending advertising material on the Clients account and telegrams/ telephones/ telex/ fax charges when specifically incurred in carrying out the Clients instruction, shall be billed at cost. Creative Copy in English for press advertisements, radio/TV/cinema commercials, leaflets, etc., not involving any extensive research is normally provided free of cost by the Agency. Translations into other languages shall be charged to the Client at cost plus 17.65%. Where the Client wants a copy from a source other than the Agency, the same shall be charged at cost plus 17.65%. A separate fee shall be levied for writing lengthy brochures or where a lot of research is involved. The fee for such a job shall be decided by negotiations before the job is undertaken by the Agency. Where the client initiates any work on any item from the agency and later cancels or suspends the assignment, the Client will pay the cost of the agencys inputs incurred till the time of suspension/cancellation of the assignment. If any creative work, done specifically at the instance of the Client, remains unused for a period of 6 months after presentation, the Agency may charge the Client for the Agency time and the material cost involved in preparing the same. The Agency shall give credit to the Client for the said amount when the work is used at a later date.

Artwork & Mechanical Items All charges related to the designing and preparation of artworks are enumerated in current Design & Artwork Charges rate schedule which shall be handed over to the Client from time

Research If the Client is desirous of the Agency participating and contributing to the conceptualising, planning/interpretation of market research assignments, the Agency shall so participate/ contribute, and in such cases the Agency shall bill the Client service charges @17.65% of the value of the market research bills.

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Travel Where the Client specifically requires any member of the Agencys staff to travel in connection with its publicity programme, it is agreed that the Air/Railway/other fare shall be borne by the Client according to the position held by the staff member who would be undertaking such trips, wherever possible to and from a city in which an office of the Agency is located and the destination. In this connection, the Agency shall submit for the Clients prior sanction, an estimate which shall be based on the following rates: a] Any Director Rs. _________ per day plus Air/Rail/other fare plus out-of-pocket expenses. b] Other Agency Executives Rs. _________ per day plus Air/Rail/other fare plus out-of-pocket expenses. The Client also agrees to the Agency billing conveyance charges at actuals for taxi fares, etc., while the Agency personnel travel for official work over and above normal routine servicing.

Radio/TV Bills for Radio broadcasts and telecasts shall be sent in advance, i.e. during the first week of the month in which broadcasts/ telecasts are scheduled. Payments of all such bills must be made within 15 days of the receipt of the bills. Cinema Films/Slides Payments of all cinema bills must be made in accordance with the terms stipulated by Blaze Advertising Pvt. Limited/other similar concessionaires at the time of finalisation of screening programmes/ contracts. The usual procedure is to decide upon instalment payments which must be made in advance i.e. during the first week of the month in which the exhibition of screening takes place. 10% of the total expenditure scheduled for cinema advertising shall be withheld to safeguard against a shortfall in screenings and shall become payable after the final reconciliation has been completed at the end of the screening programme. Blocks and Print Material The Federation of Block Makers, Processors and Printers require payments within 30 days from the date of their invoices. Consequently, the Client shall pay for these items within 30 day from the date of the Agencys bills.

Marketing Consultancy and other services Whenever the client requires the services of the Agency for specific projects outside the area of preparing and placing of advertisements, such as marketing consultancy, planning of special promotion activities, editorial publicity, public relations, journalism, competitive checking, etc., the Agency shall provide such services to the Client at prior approved service fees.

Billing & Due Dates of Payment The Agencys bills shall be paid by the Client in accordance with the following:

Press Bills shall be submitted to the Client at the earliest or by the tenth of the month following the month in which the advertisements have been published and these shall be payable within 30 days from the date on which the bills are received by the client.

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It is agreed that whenever printers stipulate advance payment against bulk orders for purchase of paper, etc., the Client shall pay in accordance with the terms laid down and the balance, if any, against delivery.

Art, Creative & Service Charges All bills shall be paid within 30 days from date of receipt of the bills by the Client.

for a period of two years from the date of execution of the work, originals of all bills and quotations received from media owners and suppliers who execute the Clients jobs. The Client shall have the right to depute its authorised representative to inspect these documents, to verify the correctness of the rate charged by the Agency. However, on no account shall the Client require the Agencys bills to be supported by originals or copies of suppliers bills nor shall the approval of the Agencys bills be made conditional on the enclosure of the suppliers bills. 6] Advance Payments Whenever the Agency is required to make advance payments to models, photographers, hoarding contractors, etc., on behalf of the Client, these shall be paid by the Client in advance. The Agency shall execute such work only after receiving advance payments and against signed and approved estimates for all such assignments. 7] Faulty Reproduction The Client agrees that the rules laid down by the Indian Newspaper Society/ AIR/ Doordarshan relating to faulty reproduction on advertisements are such that they protect media owners against such claims every inch of the way against the Clients/Agencys interests. However, the Agency shall endeavour to ensure that the advertising material supplied to the media is of the best possible quality to eliminate the prospect of rejection of insertions and it is agreed that the Agency shall not be held liable for rejections at any time unless it is proved beyond any possible doubt that material supplied by the Agency to the media was faulty. 8] Voucher Copies The Agency shall submit bills for Press Advertising duly supported by the relevant voucher copies. In the absence of voucher copies, the certification of publication of the advertisements (for which vouchers are not available) will be deemed as sufficient proof of publication of such advertisement. The Client agrees not to insist on certification for Radio broadcasts and TV telecasts as these are normally not supplied by All India Radio and Doordarshan.

Hoardings All bills shall be paid monthly/quarterly/yearly, in advance, by the 29th of the month preceding the month of execution.

Bus Panels Bills for bus panels be paid in advance, in accordance with terms & conditions as agreed between the Agency and the respective Transport Undertakings.

5] General Terms All bills, submitted according to the terms & conditions of this Agreement shall be settled by the Client within the periods stipulated in each case under Clause 4. It shall be incumbent on the Client to draw the attention of the Agency to any discrepancies within 10 days of receipt of the bills. In the absence of any such notice being given to the Agency, it shall be presumed that the bills have been accepted by the Client. The Client agrees to pay interest @ 3% per month on bills not paid within the due dates. The Agency shall preserve in its offices at [city names of where the Agency has office/s]

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9] Certification for Cinema Screening/Slide Exhibitions The mode of certification shall be as finalised with Blaze Advertising Private Limited/ other similar concessionaires. Normally, certificates provided by the theatre owners are accepted as evidence to show that screenings have taken place. However, Blaze Advertising Private Limited usually volunteers to provide up to 90% certification of the total number of screening weeks. 10] Copyright The copyright in all jobs created by the Agency, including press advertisements, literature, scripts, music, radio tapes and programmes, logos and corporate graphics, TV spots and films will rest with the Agency till the termination of this Agreement. If, for reasons of expediency or any other reason, the Client makes direct releases of the Agencys work, the Client agrees to pay a 75% surcharge on the Agencys normal artwork bill. The Agency shall have a lien over all blocks, matrices, negatives, positives, proofs, printing materials, films, audio-visuals, tapes, cassettes, artwork, hoardings, paintings, etc., until all the Agencys charges are paid and the Client shall not be allowed to use the same either by themselves or through any other agency until all the Agencys charges have been fully paid. The Agency shall return available stereos, artworks, blocks, etc., subject to getting them from printers, publications, etc., in as-is condition.

11] Minimum Billing The Client agrees that its billing through the Agency during a year will be at least Rs.__________ (Rupees _______________). In the event of actual billing during the period of one year being less than Rupees the Client agrees to compensate the Agency by way of service fees at the rate of 15% of the difference between Rupees and actual billing. The Agency agrees that during the currency of this Agreement, it shall not handle the advertising of the same type of product(s)/ service(s) of other manufacturers which compete directly with the Clients product(s)/ service(s). The Client agrees not to appoint any other advertising Agency to handle the publicity and promotion of the product(s) assigned to the Agency till such time as all the dues of the Agency have been settled by the Client in full.

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HOW TO AVOID DISPUTES

12] Termination Termination of this Agreement shall not become effective until 90 days after the receipt of the notice of termination from either party to the other. The Client agrees to pay for all authorised work in progress at cost together with the regular Agency Commission, and the Client assumes the Agencys liability under all outstanding contracts made on the Clients behalf. In Witness whereof the Parties hereto have set their hands to This Agreement on this ______ day of ________________ 20________. Signed, Sealed & Delivered on behalf of the within named Client by [name & designation of Authorised Signatory] in the presence of [name and address of Witness] Signed, Sealed & Delivered on behalf of the within named Agency by [name & designation of Authorised Signatory] in the presence of [name and address of Witness] POSSIBLE PROBLEM AREAS: 1] Estimates

Estimates incorrect or incomplete agency to check carefully. Estimates not signed agency to remind client if not signed. Estimate signed, but: i] wrong/ unauthorised ad agency to check estimate for errors. Remember errors could happen. ii] wrong date iii] wrong position/page as requested/guaranteed. iv] bad reputation remember it may not be the agencys fault; the agency did not make the block operate the press. The fault usually lies outside the agencys control.

A Print job needs these estimates: Artwork, Estimate, Print Estimate (Including block making, plate making, printing of required size quality, folding, punching, number of colours and all other specifications). Disputes are often caused between the Agency and the Client or the Publication or the Printer by neglecting to get a proper Estimate.

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2] Billing

Agencies may print their Estimates, Orders, Bills, Bill Challans as per samples available with the Advertising Agencies Association of India. DOCUMENTATION Estimates This is a legal document. So every Estimate must cover every expenditure and all releases made on behalf of all client. Each Estimate must give the list of publications selected, size of ad, special position if any, number of insertions, rates, and may be taken from a current rate card which should be kept on file. Estimate must be presented to the clients in triplicate with conditions clearly mentioned (these from INS rules) giving dates booked tentatively. Signature of the client must be obtained on the Estimates before a single ad is released. Leave a copy of the Estimate with client, and you should have at all times the copy with the clients signature in your possession. It is on his authority that you release the ads and this estimate is his commitment and authorisation in this matter. Release Orders Release Orders should contain items such as headline, size, key no., date/s of release, special instructions for positions with or without extra charges, supplement to be mentioned by name and date as date change but the supplement will not; and so that publication may be clear when releasing these ads. Also mention edition with dates in each care. For example many advertisements often have reverse letters or solid letters on a screen background which render the contract too light for the purpose; it is a source of printing difficulties, e.g. smudging, etc., and is simple asking for trouble. Such advertisements must be discouraged. Ad length of part cm is calculated to the next cm. Lastly, the rate is to be mentioned wherever possible.

Errors in Billing Voucher copies it is often difficult to get voucher copies from publications these could be due to many reasons, some of which could lie beyond the agencys control. If bills wait for voucher copies they can be considerably delayed, causing other problems; in such cases the bills should be sent with whatever voucher copies are available, with a footnote providing the names of publications where advertisement/s have appeared, but were not billed due to non-receipt of voucher copies. Mention may also be made that supplementary bills would follow.

3] Bill Challan Sometimes it is difficult to obtain more than one voucher copy, specially after some passage of time. In such cases, the publication issues a certificate of appearance of the ad which is good enough proof that the ad appeared and clients should accept it. In all cases, agencies should send bills and vouchers accompanied by proper challans. It is best if client passes bills immediately on receipt and when knowledge of its circumstances are still fresh. 4] Accounting
Errors

in accounting. Client insists on return of blocks, artworks, positives, etc. Errors in outstanding statement.

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Bills This is a legal document and must be absolutely correct. The first requirement is to have the relevant rules of INS printed on the Bill. There must be a determined effort for the Bill to have supporting voucher copies and they must all be submitted with the Bill and mentioned on the Bill. If this is just not possible the Bill should not be delayed but sent only with available voucher copies. Bill Challans Bill Challan must accompany all bills. This covering Bill Challan is to state what bills have been sent to the client with each delivery and also confirm the dates of the vouchers sent in support of these bills. These bills with Challan shall be handed over by a responsible person from the agency to a responsible person from the clients side. At this meeting, the agencys representative should go through these bills with the clients representative and also draw his attention to fact that all these bills are supported by vouchers. The Bill Challan is proof that bills are delivered. Since agencies are always called upon to provide proof of Bill delivery and voucher cutting, it is important that agencies obtain and maintain a signed copy of the Bill Challan on their records. THE AAAI CLIENT-AGENCY RECONCILIATION COMMITTEE The Advertising Agencies Association of India has a Client-Agency Reconciliation Committee which goes into the subject of payment very carefully on a complaint of non-payment received from a member agency against his client.

In such a case the Committee first convinces itself through available data that its member agency is not at fault. Thereupon it writes to the concerned client asking for confirmation of the accounts and seeks a meeting at which it mediates between the two parties. It seeks a settlement and is usually successful at this. However, if a client ignores the approach made by the Committee or does not come to the negotiation table in a reasonable period of time, the Committee would be obliged to inform all AAAI members about such non-payment. In such cases no other agency may handle the clients advertising. It is in the mutual interest of both parties concerned to settle disputes amicably. The Client-Agency Reconciliation Committee also has other methods to ensure payment. It is therefore best that all disputes be settled immediately.

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THE AGENCY CLIENT RELATIONSHIP

GETTING THE BEST OUT OF YOUR AD AGENCY Marketing and Advertising by MARCO. Reproduced with permission. The Economic Times. January 17, 1988. Some advertisers know how to handle their ad agencies well. They are usually the ones who get the best advertising. We often see the same agencies producing indifferent work for others. You will learn to treat your advertising agency better if you realise that they perform a specialist function at an economic rate. Try to set up agency services in-house and you will know how costly it can be. But economy is not the only advantage the agency system offers. Advertising agencies nurture experts in a variety of disciplines media planning, research, copy, art, film, TV, radio, printing, AV and so on. As the years pass, they acquire breadth of experience over a wide spectrum of products and services, which can be harnessed to your advantage. A problem you encounter may be new to you, but the men in your agency may have encountered similar problems while helping to sell other products. Agency people are better informed about media as they are in continuous touch with them. You are too close to the product or service you are offering and hence may miss the flaws altogether; agency men can take a more objective view. A little objectivity at the initial stage may ensure timely advice and save you from costly blunders. (I know from experience that some people do not even bother to register their trade mark with disastrous consequences later on.) Partnership The agency-client relationship has been described as a close working partnership born of mutual trust and confidence. There are compromises as in any other kind of partnership, and an attitude of give-and-take is always helpful. To keep this relationship at its fruitful best, here are a few guidelines. Treat agency personnel with courtesy, always. In India, many people have a condescending attitude to suppliers of goods and services. Suppliers depend on your orders, and so you perceive them as inferior or subordinate. This is altogether wrong. An agency is not subordinate to your company, nor is an agency executive a subordinate of your marketing people. He has an independent status. To bruise his ego is not the right way to get things done.

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Infect your agency with enthusiasm for your product or service. Demonstrate the superiority of your product or service to the agency people as you would to a prospective buyer. Share with them information on the advantages that you have over competitive products. This, of course, includes market research findings. Mark a copy to the agency of every appreciative letter you receive from consumers. Keep the agency informed about any special recognition awards won in India and abroad and so on. Involve the agency fully. I know one advertiser who sends territory-wise sales figures to his agency every month. Another used to give free access to territory managers monthly reports. Most sophisticated advertisers involve the agency from the very concept stage of a new product. The brand name and the surface design of the pack in the case of consumer products can have a bearing on advertising effectiveness later on. Sometimes your agency will be able to suggest a product with a meaningful difference to the consumer and this difference may make it easier to sell the product later. Give a thorough brief before asking for advertising proposals. Some advertisers give a written brief, some brief their agencies in person, others expect their agencies to hang around and ferret out a brief for themselves. A written brief is the best; ideally it must contain a thorough review of the current year, and marketing plans for the coming 12 months. (Some work on three-year or five-year briefs, updated every year). Agencies look for sale figures segment-wise (examples of segments: regions, town groups, different categories of retail outlets, institutional sales, etc.). They also need information about competitors in relation to product quality, price, packaging, promotions and advertising. How do you intend to counter competition in the coming year? What is the weight you will assign to the various elements in the marketing mix? Any improvements in your product, pricing, packaging or distribution? How do you perceive the climate for selling? A brief is usually more valuable if it is backed by research. Many advertisers seem to grudge small amounts of money on research while they will cheerfully part with large sums for media expenditure. Research can help to provide guidelines for your advertising. Seek your agencys advice on this if you dont have research personnel in-house.

Define your marketing objective clearly, and work out the advertising objective. Its better to give a clear indication about the budget you can afford. Some people ask the agency for a budget with detailed workings, and then disclose that they can afford only a small fraction of the amount. This can be quite demoralising because detailed media planning is a back-breaking exercise. Be candid about what you can spend, and re-examine the position if the agency feels the amount can buy very little. In case of doubt about how to arrive at a budget, ask your agency for methodology that will help you. Encourage your agency to clear with you, in advance, the main points to be covered in the advertising. These days. What you say in your ad is much more important than how you say it. If there is agreement on the content of your advertising, much heartache can be avoided later on when detailed proposals are presented. Agencies generally try to arrive at what is generally called a copy platform. The definition may change from agency to agency; its usually a written plan that contains the most crucial information about the product or service and explains the manner in which an advertisement is to be put together. The advertising objective, the selling theme and the visual and verbal approaches are the main components. Subroto Sen Gupta, well-known advertising practitioner and teacher, once wrote: I am a believer in a written document on creative strategy, agreed between client and agency as the starting point in creative work. He was of the view that the document should define the target consumer. Streamline your approval procedure. Who in your company approves the advertising proposals prepared by the agency? Ideally, he should be the one to whom the agency must present the advertising plans. Make sure that the brief and the strategy document had his prior approval. Care should be taken to see that approval (or rejection) is not based on whims and fancies. In one company I know there was a convention that the right to reject anything also carried with it the responsibility to explain why. And whoever wanted a finger in the approval pie had to make their comments at the agency presentation. Hierarchical and committee models for approval were generally discouraged.

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Creativity You can drive agency men crazy with inane comments. It doesnt appeal to me. Lacks punch. Not creative enough are some of these. Ads are meant to appeal not to you but to the target consumer. Subhas Ghosal, veteran ad man, once discussed creativity thus: Any judge of advertising whether he is a creator or a buyer must never forget, must never allow the fact to be obscured, that it is not creativity per se that he is passing judgement on. He is assessing the level of persuasion attained words like creative and creativity confuse the issue we are users of advertising not purveyors of aesthetics. Mind you, persuasion and aesthetics are not mutually exclusive; sometimes they may even coincide and on the rare occasion the purely aesthetic may be wholly persuasive. But as the true yardstick, persuasion is number one. Treat the advertising professional with respect. Mere courtesy is different from respect. An experienced professional often has insights denied to others. Some advertisers follow the practice of not interfering at all with the proposal submitted by the agencies they have faith in. Their argument is that advertising must be at the level of experience of senior agency people rather than at the level of experience of the product manager or the marketing manager whose specialisation is generally in other fields. Much depends, of course, on the calibre of the people in your agency. HOW TO BE A GOOD AD AGENCY
Marketing and Advertising by MARCO. Reproduced with Permission. The Economic Times. August 21, 1988.

Industries. Farrokh Mehta, Director, Agricultural Products, Pfizer, was the moderator. Listening to Chopra, I realised that a manual on how to be a good agency would not be easy to write, because an ad agency has clients of different levels of sophistication and expertise in handling advertising. There are thoroughly unprofessional tycoon types who see advertising as a means to massage their ego. There are professional managers with not enough experience who drag advertising down to their level of incompetence. There is a third group which interacts intelligently with their agencies to produce effective advertising that both the advertiser and the agency can be proud of. Tough job How can you be a good agency to all three groups at once? Its a tough job. Manuals dont help. I once asked the late P. N. Sharma who was the Chairman of OBM. How he dealt with tycoons with an overgrown ego. He told me his approach was simple: hed present really professional work the first time. If it was rejected, and the tycoon wanted to pander to his ego via advertising dictated by his own whims and fancies, well, that was his business. After all, it was his money. Chopra talked about advertising undertaken whether distribution target group analysis, and without ascertaining whether distribution covered the areas where advertising was scheduled. He had seen a lot of waste money unprofessionally spent. He gave the example of the textile industry, many constituents of which had squandered money on advertising of this kind. An agency chief once told me how a textile tycoon ran his ad campaign. The agency would be asked to prepare a number of ads. These would be displayed on a long table in a large room. The tycoon would then arrive, accompanied by his minions, and hed pick out the ads he liked.

A few months back I wrote on what an Advertiser should do to get the best out of his ad agency. A short manual in fact on how to be a good client. I promised you then, that some day I would present the Advertisers view on what he regarded as a good agency. The Advertising Club Bombay recently organised a symposium on What top management wants from Advertising (no doubt to help make my task easier). The speakers were J. C. Chopra, Senior Vice-President of Voltas. Gurcharan Das, Managing Director, Procter and Gamble (I) and Shashi Dash, Managing Director of Polynova

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This oneyes, this that over there this is okay and so on, much as one would choose dishes from a buffet table. The decision-making process took about 10 minutes, and the great man would then exit with his aides. If you hear stories about the managing directors mistress being called in to judge the effectiveness of a radio jingle, or the Chairmans wife (whose articles appeared in her college magazine years ago) being asked to re-write agency copy, dont dismiss them as imaginative gossip. Second group The ego problem is not confined to tycoons. Under the brand manager system, people with inadequate understanding are asked to make decision on ad campaigns. They often mistake the voice of experience to the voice of conservatism anathema to the young whose minds are seething with revolutionary ideas to rectify the universe. Some try to hide their inexperience behind a veil of aggressiveness and bravado. (In the old days, a senior advertising executive served as a moderating influence on both the agency and the brand manager.) In some companies, the advertising managers post is just one rung in a mans promotion ladder, and his main concern may be to please the ones who are likely to help advance his career. So it was clear to me that the comments of Chopra et al would help ad agencies only in their relationship with truly professional counterparts on the clients side. Some of the tips they offered were of great interest even if they seemed controversial to a few. Chopra, for example, made much of the need for advertising to support the brand strategy, which he believed should be a written document. The creative execution should not keep changing. People might change: a new brand manager who come in, or a new account executive who joined the agency, might advocate change for the sake of change, but if a written document existed, and was adhered to, there was greater likelihood of consistency in advertising. (Which I feel can be a great virtue, over a period of years.)

He gave an example of a standing instruction: never show your refrigerator full of fruits and vegetables and cheese and so on: display it empty, so that the exclusive feature could be identified at once. (There is a psychological reason too, Im told; a housewife would like to do the stocking-up job herself, she feels frustrated when she finds that somebody has already done this, and has thus encroached on her territory.) Examples Lifebuoy does not appear to have changed its brand strategy or the creative execution over the years. Where theres Lifebuoy theres health is a well-remembered slogan, supported by the statement, washes away the germs in dirt. We invariably see a person in the process of having a bath. Such consistency over the years has paid off. Colgate is another brand which has not changed its stance; modifications in the creative execution have stayed within the overall strategy. And Colgate hasnt budged one inch from its leadership position. But doesnt the ad agency (the good ad agency that is) have a duty to point out that the brand strategy may be wrong? Amul Butter had a precious butter strategy at one time, and the advertising stayed within this concept. Result: many people thought it was more expensive than Polsons Butter, which outsold Amul in Bombay. The utterly butterly campaign changed the image to fun, enjoyment, with happy results for the brand. Complan had very low sales on a balanced food platform. When the complete food story, which positioned it against milk (which is the nearest to a complete food in peoples mind), was given adequate airing, sales registered a substantial rise. What a childrens promotion did to Gold Spot sales is already well known.

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Abandoning an old strategy for a new one can have adverse results too. If Colgate had a prevent bad breath and tooth decay story, Forhans went steady as a bleeding gum remedy and commanded a healthy 19 per cent of the market. Forhans, of course had a problem with the younger generation, who didnt suffer as a rule from gum troubles. So someone decided to change the brand strategy. Some of the new headlines: At 18, youre more interested in a slim body, new hairstyles and a budding romance. You have no time for your precious 32. Thats when Forhans Dental Care works hardest for you. At 24, youre pre-occupied with meeting friends, shopping and setting up house. You hardly take notice of your precious 32. Thats when Forhans Dental Care works hardest for you. At 28, youre concerned about your career, growing expenses and a bulging midriff. You barely think about your precious 32. Thats when Forhans Dental Care works hardest for you. Forhans market share fell. (Maybe there were other reasons too for the decline.) Objectivity All the three speakers expected objectivity from their agencies. Chopra put it more specifically when he said the agency must take up a position. He narrated the story of someones advertising for a one-handed lawyer he was fed up to the teeth of lawyers with on the one hand and on the other hand arguments. (Actually it was President Truman who said he longed for a one-handed economist, because economists, who hate to commit themselves, are fond of using the on the one hand and on the other hand poly.) Objectivity is actually one of the reasons for the very existence of the advertising agency system. The advertiser is too close to his product or service and cannot see it objectively, especially from the consumers point of view. Shashi Dash placed objectivity above creativity; he wanted the agency to come up with the buyers viewpoint. A good agency would have the courage to differ from the client and tender professional advice, said Chopra. Creativity as such did not emerge as the prime characteristic of the good agency. Shashi Dashs emphasis was on objectivity, inventiveness (must be ahead of the client in thinking newer ideas), initiative (pointing out new horizons, stimulating positive action) and involvement (finding solutions to problems, trouble-shooting

generally). Some of the other requirements he set down were: most cost-effective media mix, clout in media-buying, flexibility and agility to handle market changes, innovative use of media and expertise in business communications involving a variety of tools. The nearest he came to naming creativity was in asking for advertising that would make the brand stand out and establish rapport with the consumer. This was echoed by Gurcharan Das too. He didnt perceive advertising as an art form or as a means to provide entertainment. The main job was to make the brand interesting enough to buy; the stress should be on converting the brand benefit into a bit selling idea meaningful, credible and provocatively stated in consumer terms. Originality did not rank very high in his list of priorities. Think Indian According to Gurcharan, a good agency would think Indian. The normal practice in India for agencies was to present advertising campaigns in English. He encouraged his agency to present them in Hindi. He thought it was easier to render Hindi ads into Indian languages. (This has another advantage: a Hindi writer is better able to call up images which reflect the Indian life-style and thus establish instant rapport with the target group.) He also invited the audiences attention to radically different approaches to marketing, witnessed in some segments. Nirma and Rasna were success stories, and both were Ahmedabad brands. Nirma did not follow the advertise-for-sales rule, its strategy was advertise-from-sales. He thought the Ahmedabad paradigm was worth studying; it was probably a forerunner of things to come. I got the impression from the discussion that a good agency operated at a fairly high cerebral level. How many of our ad agencies would qualify? Fifty? A hundred? Chopra said he was alarmed at the proliferation of ad agencies with low billings and low professional calibre.

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RECOMMENDED ART CHARGES

Art Charges include designing and artwork cost to which the cost of illustrations or photography, retouching, prints, etc. must be added. 1] Estimates are to be raised and signed before the job is undertaken. Preferably all estimates raised are to be returned approved within 5 days of receipt, failing which it will be deemed approved and bills raised thereon will be paid in full. 2] Any revisions in final artworks prepared on the basis of approved/ copy will be charged extra. 3] Rate for photography, photosetting, typesetting, negatives, bromides, etc., are likely to go up any time. In which case these art charges will increase. Some indicative rates, effective from 1st April, 2004 are given below. These rates are valid for one year after which they may increase at least by 10%. 1] PRESS ADS Layout/Concept @ Rs. 7,000 onwards Artwork @ Rs. 20.00 per sq.cm. Plus cost of illustration, photography, prints, retouching, modeling, props, travel, boarding and lodging, out-of-pockets, etc. COLOUR AS IS DOUBLE THE COST 2] PRINT JOBS Leaflets, brochures, booklets, single-folded and multi-folded. Cost of designing and artwork @ Rs. 20.00 per sq.cm. in black and white @ Rs. 40.00 per sq.cm. in colour Plus cost of illustration, photography, prints, retouching, modeling, props, travel, boarding and lodging, out-of-pockets, etc. COLOUR JOB IS DOUBLE THE COST 3] OTHER PRINT JOBS Poster, metal plate, streamers, hangers, mobiles, danglers, dispensers, crowners. (Rs. 8,00020,000) 4] FILM AV (Rs.30,00060,000) Film script storyboard (Rs.20,0001,00,000) TV Slide (Rs. 4,00010,000) Adaptations (Rs. 3,0008,000) Cinema Slide (Rs. 8,00020,000) 5] OUTDOOR Banners (Rs. 2,0008,000) Kiosks (Rs. 12,00030,000) Van Design (Rs. 8,00020,000) Hoardings (Rs. 8,00020,000) Adaptations (Rs. 2,000) Pavilions (Rs. 50, 0001,00,000)

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6] SYMBOL/LOGO Rejection fee (Rs. 8,00025,000) Design used (Rs. 40,00080,000) Corporate image (Rs. 50,0001,00,000) 7] ANNUAL REPORT

Directional Directional Signs Office entrance location Hoarding Total Amount (Rs. 80,0001,60,000)

Upto 24 pages (Rs. 80,0001,60,000) 8] CALENDARS Wall Calendars (Rs. 40,00080,000) Desk Calendars (Rs. 12,00020,000) 9] CORPORATE APPLICATIONS

Only Letterhead, Envelops (Rs. 8,00016,000) and Visiting Card

N.B.
Cost of blocks, positives, bromides, artpulls, progressive proofs in black & white and colour will be as per the suppliers bills to the agency.

Stationery Letterhead Envelope Visiting Card Typical Stationery for Office Use Typical Stationery for External Use Environmental Factory/Office Sign Vehicles Decorations

Cost of translations, artworks will be as per the suppliers to the Agency. Whenever 15% Agency commission/trade discount is not given to the Agency, then the Agency will charge 17.65% of the net amount, to the Client. Some of the items are modeling fees, props, travel, boarding and lodging, out-of-pocket expenses, etc.

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35 Maker Tower 'F', 3rd Floor, Cuffe Parade, Mumbai 400 005. Telephone: (022) 2218 2164 / 2218 7609 Fax: (022) 2218 9590 Email: aaai@vsnl.com Website: aaaindia.org For Private Circulation Only. 2005