If Paul the Octopus - of the unblemished predictive record in World Cup 2010 -  were to predict the future of our industry’s remuneration standards in 2013, I am hazarding a guess that he would gravitate towards a box which unapologetically says 0% - probably put there by an industry veteran, hoping against hope that the gifted enigma wouldn’t pick it. But Paul would - like it or not

If a statistician were to plot a trend line of average media agency remuneration across Asian markets from the mid 1990’s ( when media agencies officially came into business in Asia ) till date and hazard a predictive model - Paul’s conclusion would not be too off the mark. Remuneration levels have slowly but surely taken a downward slide. With the dotcom bust of 2000, 9/11 and the Iraq War, global companies tightened their screws on major outflows looking for efficiencies wherever they could - and advertising spends was one of the major outflows, if not the biggest, for most Fortune 100 companies.

However we - as an industry - need to come to an overall consensus as to what level of remuneration would we actually term fair and how we can get there. And we can only get there if we prove our worth - and not by something remotely akin to industry price fixing, because history has shown that those attempts fail miserably.

So what would be “fair” ? QUite simple - the remuneration level that allows us to make an adequate profit. The situation will vary by company ( and….ahem….network ) and market and hence there will be very different ways of accounting, and calculating profitability. But the reality check for any agency would be

a. Ability to compensate competitively and attract the best minds, especially ones coming out of college. Snagging bright youngsters interested in the related industries of product marketing, advertising, entertainment, telecom to our arena has been a challenge - and the blame has primarily been our ability to compensate at junior levels

b. Ability to invest in tangible differentiators and stand out in the crowd. Be it research, be it analytical or predictive tools, be it maverick personnel ……it all costs money and it all links back to overall profitability on businesses we handle

c. Ability to promote itself and make clients comfortable. Being in the communications business - we often do not have budgets to advertise ourselves - and if at all, it is restricted to direct mailers / collaterals and once-in-a-blue moon breakfast meetings. Why can’t we advertise on CNN ? Or on Glee ? Or the Straits Times ? Seeing our messages there would re-assure CEO’s just as Singapore Airline ads prevent dissonance amongst its Business Class patrons !

Once we have a fix on what we would like to paid, how the hell would we get there ?  What would it take ?

After a flurry of procurement driven meetings over the last few quarters - I have been left to wonder……what is it that people - as consumers, wherever they may be, really pay a premium for and readily so ? And led me to an amusing thought experiment across categories, of my own behavior on the so-called “premium”, to uncover if there’s anything obvious that we are missing. I took four categories we often encounter - and in each category I took one brand I readily pay premium for against another brand which offers the same basic benefit, and asked myself why

A. Airlines : Singapore Airlines Vs Budget Airlines

B. Male Grooming : Body Shop Vs Gillette

C. Music : iTunes Vs LimeWire

D. Movies: FNAC Vs Amazon

And to my surprise - the answer for all four was the “experience” during the usage or the “journey“, if I can call it that and NOT the end-benefit. To take the Singapore Airline example - I pay a premium for travelling by SIA because I simply love the way they pamper me - the out-of-the world service, the smiles, the whiff of fragrance all around, the spic-n-span aircraft, the efficient boarding and the list goes on. I don’t pay them a premium because of the end-result ( XX % on-time arrival ……..do we even care ? ). Similarly I go onto iTunes - simply because I like spending time on iTunes because of the way the experience is structured with the endless library of music and not because of cheaper downloads ( basic end-benefit )

And therein may lie a clue for our future - because our clients are our consumers.

Currently as an industry we are too end-result focused - savings, CPRPs, CTRs - there is no “experience” for the client. Hence he pays only for the end-result !!! To take a parallel - if we were to decide on the price we pay for air tickets, based on just rate of on-time arrival - we would not have fantastic brands like Singapore Airlines and Emirates as options, neither would there even be a Business Class or First Class !

We need to create a journey for our clients that they will love - while we create their communications battleplan. And that means changing our work-flow from “Brief In, Plan Out” to a far more inspiring and exciting culture that engages clients many times along the way. Immerse the client in the work that we do…….make CEOs fall in love with what we do and how we do it and don’t just bombard them with what we “churn out”.

Agencies that manage to create those journeys will in time become more differentiated and stronger. Agencies that can’t will slowly but surely get smaller and ultimately become extinct.

Been watching the much-hated / maligned “Championship of Me” being played out in the US …..with LeBron James announcing his decision to move to Miami on PrimeTime cable a few hours back in a media frenzy self-dubbed “The Decision”. The free coverage LBJ - and NBA - has got in the last 1 week around the world including segments in CNN and the likes ………was immense. Was that bad for anyone ? No !!!

Of course - I thought it was excessive………we have all been conditioned to think that way in our industry. We take great pride in building client’s brands but it comes to building our own ………..we have been painfully shy. Any agency which even “dares” to advertise the flurry of awards we win at international award festivals are scorned by industry “purists” as ones not focused on their real jobs - which is doing great work for our clients.

Scarred by cost driven pitches - where “1″ has become the new “3″ …………like “3″ was the new “5″ a few years back - I feel it is time the media agency fraternity woke up. Being responsible, equipped to do great work that changes brand fortunes is hygiene. But let us build our own brands - go to town with what we do (  so that our kids actually can tell classmates what Daddy / Mommy really does ), what we have done well and what we continue to do brilliantly. Let’s take a leaf out of the LBJ playbook - make mountains out of mole hills………and Mt Everests out of hilltops !!! Let clients feel proud to work with us - right now pride is a rather one-way street in Client - Agency relationships.

Maybe in due course - if we are not constantly seeking topline growth and we are brilliant and are seen to be genuine change agents……….we could pick and choose the partners ( only certain disreputable callings have “clients” ) we want to work with. Ones that we think would respect us, energize our teams and remunerate us fairly and allow us to recruit top quartile talent to our arena.

Enough has been said on the recent comments by Rahul Welde, the VP - Media for Unilever Asia AMET at an Indian conclave. But to be fair to him - he is only articulating what the real feeling of a majority of advertisers is - and that is a shallow grave that we have dug ourselves into. By competing endlessly on price - under-cutting each other and ensuring that this is one of the few industries where the top ranked player can charge zero premium over the 15th ranked competitor !

Enough is enough - all of us need to create a “Championship of Me” ………..all of us need to go the LeBron way. Can you even imagine what would have happened if the New York Knicks had asked LeBron James a “pitching fee” for the honor of them considering him for the 2010 season ? Of course that would never have happened if LBJ hadn’t asked his first club for fair remuneration. The time for radical change has come folks - and “the answer”, always pretty obvious, is now ”blowing in the wind” :)

As the colossus who pioneered the concept of eradicating poverty profitably - passed away a few days back, it might be apt to remember his best known work and the implications for us in the communication industry.

About 4 billion people live at the bottom of the global economic pyramid today …….the definitions vary but there is broad agreement on the numbers living in “poverty”. Thanks to the pioneering work of Prof C K Prahalad - buoyed by celebrities like Bono - leading national and transnational companies have realized that the poor are not necessarily destitutes in need of charity but can in fact be very potent prospects when targeted with the right products / services. However when it comes to communication, marketers are still using the age old communication constructs based on dated consumer behavior paradigms like “AIDA” ( Attention - Interest - Desire - Action ) or “CAB” ( Cognition - Affect - Behavior ). Therefore in many cases, if not most, communication strategies for Bottom of the Pyramid ( “BOP” ) campaigns have mirrored those used for other segments ! It is anybody’s guess - on what fraction of the investment would be effective and deliver optimum results !

A cursory look at the data in Indonesia, one of the biggest BOP markets in the world - would reveal some startling facts

1. BOP does not equal “Rural” - as many BOP consumers live in Urban areas as in Rural

2. A lot of BOP aspirations ( analyzed by priority of durable ownership ) are similar to wealthier segments - hence the only difference is what they can afford

3. BOP segments are just as “consumerist” as wealthier segments, in what they can afford

When we dig deeper and look at their lives - to understand how they de-construct messages aimed to change their habit or behavior, we realize that they live a life bound by a vicious cycle of

1. Day to day survival

2. Family in perennial debt

3. Inability to spend on critical things - like health / education for kids

4. Inadequate education and skills

5. Sporadic or no employment

6. Back to Point 1 - and it starts all over again

Hence their lives are extremely restricted to their immediate neighborhoods and they trust only the advice of people in their field of experience ( local elders / religious leader / school teacher ) and all key decisions in life - including buying a product or changing a brand - happen invariably in consultation with the local “influencers” , who they have trusted for a long time. And it is logical to assume - that any behavior change message will be seen through the prism of these “trusted advisors”. The BOP consumers are inherently skeptical of commercial messages - and usually trust only advisers from their close circles - mentioned earlier - highly revered people in their community who would have no motive to dupe them.

What is still astounding though - is the very different role that TV and Radio play in their lives.

TV - almost universally a source of awareness for other segments, is largely for “entertainment” and a ”time killer” for the BOP……….when there is not much else to do. Much of what appears on TV is for them “make believe” and “not very trustworthy”. The attitude extends to TV advertisments for new products and services - even if they watch advertising spots, they rarely internalize a new brand message.

( To be continued )

As an avid movie buff, I have a few axes to grind this Monday morning. The Academy Awards - the biggest cinematic event on the globe annually ……..if not in sheer innate value, but at least in the ability to displace Iraq, Osama and Recession from the headlines ( even if just for a day )…………is not being broadcast live in the 4th most populous country in the world !! Yes - sitting in Jakarta this morning - you gotta rely on web updates on the much blogged / written about David Vs Goliath battle that “The Hurt Locker” is fighting with “Avatar” !!

It does seem ridiculous that in a country - where the US Presidential debates ( yes the rather lame-duck ones between a professorial Obama and “Joe the Plumber” chanting McCain ) were carried live on multiple terrestrial stations would be deemed “not worthy” of the live Oscar footprint !

Are we missing a point ( or perhaps the whole book ) here ? Granted in all the relevant markets around Asia - Pay TV has the lowest penetration in Indonesia. That is a dangerous statistic - depending how we intend to use it. Yes as a “percentage” it is the lowest ………about 3-4% at the last count. However we need to remember - that itself accounts for about 2 Million subsrcibers……….yes 2 Million - and given the relatively high cost of Pay TV ( USD 10-15 per month vs nothing for terrestrial TV ), these are 2 Million “affluent” households. And any regional broadcast of a premium event that does not cover the premium audience in Indonesia is really missing a substantial chunk of a relevant audience.

Is anybody listening ? Oh well……..

With the tremendous hype about the “Millenials”, Gen X and the Gen Y’s, agencies and marketers have raced against time to ensure that their knowledge arsenal is better than others. Understanding their psyche, consumer behavior, purchase patterns and, of course, media consumption is the new Holy Grail of the industry. For very good reasons of course - the demographics of burgeoning Asian economies like India, Indonesia and The Philippines are significantly skewed to folks under 25.

But that’s only half the story, in the very near future a majority of the world’s GDP would be coming from countries with the average age of the population nearing or above 50 - “ageing” by any standard, and rapidly so. Asian economies likely to age the fastest would be Japan, Hong Kong, Taiwan and Korea with Singapore not far behind. Given the dreary outlook - we, as an industry, really need to wake up and talk about “Gen A” and understand their needs and compulsions with the same zeal that helps us conquer the maze of the millenial minds.

How would we - who have seen the most dramatic changes in media consumption in our lifetimes - behave when our eyesight is failing, and we are hard of hearing as well ? Would the entertainment options based on touch and feel - like iPod and iPad become the Gen A rage and would digital radio / audio be the favored entertainment in cyberspace ? Would there be virtual reality games tailored for the aged ? Would QR codes be their nirvana ? Would Nintendo churn out “Aged” versions of their Wii games to stay afloat ?

Sounds strange ? Hmmmmm… ok maybe it does. But just as our kids prove us wrong everyday - with 6 year olds churning out PowerPoint slides faster than learning cursive writing, we would probably grow old very differently.

And don’t think we even need to spend top dollars researching it. A phone call to Dad to ask him how he spent the day would do trick just as well - chances are he will be glad to get that call anyway !

It is kinda strange to have the maiden blog from Indonesia on this forum - about an old man from India. But such is the borderless world today - and such was the intensity of Mani Ayer……..and the lives of innumerous admen he touched throughout his long life.

A colossus who rescued Ogilvy India from financial shambles in the mid-1960s and built a terrific foundation for the likes of Ranjan Kapur, and later Piyush Pandey to make it an unbeatable powerhouse and an operation to be envied around the world. A close friend of David Ogilvy - and an inspiration of many CEOs spread across the world today, did it with panache and an incredibly simple no non-sense style !

I interacted with him many moons ago as an awestruck grad student in a virtually unknown comms school located in a nondescript village in India. Mr Ayer - as we called him - braved shortage of drinking water, electricity, basic amenities along with all of us - in the first few batches - to lead and inspire the institute ( MICA ) to become a pre-eminent source of executive talent for the ad industry. Today the institute has produced CEOs /MDs for Ogilvy, Leo Burnett, Mindshare, MEC, Universal McCann and many others - in less than 15 years of its existence……….such was Mani Ayer’s foresight

Looking back - all the shivers that he sent down our spines as he tore through our strategies and shrugged off our creative presentations seem so so worth it………..and I still remember his parting words as we stepped into the big bad ad world.

“Do whatever you want ……..I just never want the following happening

Client : What time is it ?

Adman : What time do you want it to be ?”

Rest in peace Mr Ayer………it is be-littling your memory to say they dont make admen like you anymore…………….the cultures you established in Ogilvy and MICA will breed superb admen for generations to come