Two auto majors in the market looking for media agency partners is bound to create a huge stir. Storyboard18 recently broke the news of Hero MotoCorp and Tata Motors calling for media pitches. Industry estimates peg these media mandates in the range of 450-600 crore.
One would naturally wonder what prompts clients to call a pitch during this time of the year when most brands across categories have not only the ‘right’ agencies already in place, but also the media plans. Most advertisers are in fact seen planning the media strategy well in advance to make the most of the heightened consumption during the season.
Around 40-45% ad spends happen during the festive season. It’s that time of the year when brands outdo themselves, resonating with consumers on a personal and emotional level, and reminding them of the joys of a new purchase during these auspicious times.
Indian culture is deeply rooted in buying valuables during auspicious days in the year. The festive period has always been a ‘boom season’ especially for the automotive industry. Huge spending by the auto industry during this period is also a known code in the category, says Sandeep Patwardhan – Senior Vice President – Enormous. The industry is known to map its marketing activities and calendar at the start of the year in proportion to the targets and ambitions.
Read more: Hero Motocorp’s media mandate up for grabs; auto major calls for pitch: Exclusive
However, market dynamics are changing and evolving at a much more rapid pace than ever, and maybe these radical calls and decisions, to run a media pitch before the festive season, are a result of it, he remarks.
“It’s quite surprising to see giant players reviewing the media mandate so close to the season. It is the basics of media buying that planning and booking early will get you the best deals. With pitches so late in time, it will hold an impact on the media costs that brands close on, given that media spots are the most expensive real estate in the country,” he highlights.
A pitch occurs when there is a gap between shared goals and/or a gap between expectation and delivery (except in the case of procurement-induced periodic cost-saving exercises). And a good marketer would look at pitching only as one of her last recourses, notes Kapil Arora, COO, Ogilvy Indonesia.
Read more: Tata Motors media review for Passenger Vehicles business underway: Exclusive
“These (Hero/Tata) are big advertisers, with smart people at the helm and well-established relationships, so one is assuming that arriving at a decision to pitch would not have come easily. But once that decision is taken, then there is no ‘correct’ time to execute it,” he says.
So, while pre-festival could possibly cause disruption, equally, if the season is so important and the brands know they are facing challenges, then not doing it now would probably cost them more, he adds.
Besides, pitches of this size take time to execute.
In 2019, Publicis Media won the mandate that included both traditional and digital media duties, after a competitive pitch for Hero MotoCorp. Estimates had pegged the media account at Rs 600 crore, at that time. As per industry sources, the media pitch is for Hero Motocorp’s integrated media mandate.
Meanwhile, Tata Motors is conducting a media review and has floated multiple briefs for its Passenger Vehicles business. Different parts of Tata Motors PVs media mandate like above-the-line, digital (for electric and ICE business) and outdoor are with various agencies. These include Lodestar UM, OMD, Dentsu and Madison. It’s unclear whether Tata Motors is looking to consolidate parts of the media mandate or to switch it up.
The right time
Contrary to what many perceive it ‘abnormal’, Meenakshi Menon, the entrepreneur who founded Spatial Access which is now part of Deloitte, notes that going for pitching in this season is confirmation that the brands have their marketing strategies well in place.
Auto advertising is normally peaked around releases and the auto category does not release during the festive season. They use the festive season to mainly get rid of stock existing stock, new models very rarely are released at that time.
So, going for pitching at this time of the year shows that the brand is prepared with their festive season communication.
Also, unlike global multinationals like Unilever or P&G, where pitches go on for a year, these companies close pitches faster because there is no global parent involved.
“What typically happens is brands close their fiscal year by April; May is when they start reviewing their businesses and agencies’ performances. This is the right time because it means that you are basing your decision on facts and not on suppositions,” Menon notes.
Echoing a similar point of view, Naresh Gupta Co-Founder of Bang In The Middle, shares that this is the right time to call for a pitch as the festival planning can be done by the new agency along with all their creative agencies.
It is also good for agencies in the pitch, there is a time factor at play and brands will need to close the choice of agency fairly quickly, which means even the client is under pressure.
Also, the automobile is an all-year category, the brands have to be there in media almost all the time, so the media agency has its task cut out. Further, the timing of the pitch is immediately after the T20 World Cup, so maybe there is a lull in the campaigns right now, he adds.