official handbook

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OFFICIAL HANDBOOK

ADVERTISERS & ADVERTISING AGENCIES

for



I N T R O D U C T I O N

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.



02

The Advertising Agencies Association of India 03

Objectives of the Advertising Agencies Association of India 04

A Guide to Membership 05

Standards of Practice 06

Agency Service Standards 07

How to Choose and Appoint an Agency 14

How to Avoid Disputes 21

The Agency / Client Relationship 24

How to be a Good Advertising Agency 26

Recommended Art Charges 29

CONTENTS



03

THE ADVERTISING AGENCIES ASSOCIATION OF INDIA

The Advertising Agencies Association of India (AAAI) functionsthrough 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 theGeneral 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 Relations10] 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 ever–increasing contribution to the nation by

working towards the following objectives:



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1] To benefit Indian consumers and protect their interests byhelping ensure that advertising is honest and in good taste.

2] To benefit Indian advertisers by promoting their sales, increasing

profitability and productivity, to stimulate business and industrial

activity.

3] To benefit media by establishing sound business practices

between advertisers and advertising agencies and each of the

various media.

4] 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.

5] 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.

6] 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 theadvertising profession and to serve as a spokesman against

unwarranted attacks or restrictions on advertising.

8] To establish a forum where representatives of advertisers,

agencies, media and Government can meet on mutual ground

and examine problems of mutual interest.

9] To offer effective co-operation and liaison with Government

officials and bodies for the purpose of broadening theirunderstanding of the role of advertisers, advertising and

advertising agencies.

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.

OBJECTIVES OF THE AAAI



05

A GUIDE TO MEMBERSHIP

The Advertising Agencies Association of India comprises of agenciesthat 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 todescribe 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 it’s 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 andexpertise; 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 shouldbe 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 nota 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 indirectlyindependent 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 regardingthe applicant agency’s 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 itsfinancial stability and healthy payment policy.

8] Contracts

a] The Advertising Agency should confirm to its agreementwith 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 StandardWhile it is not important to know the applicant agency’s 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 bythe 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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OBLIGATIONS TO MEMBERS

1] Every member of the Association is expected to carry on hisprofession and business in such a manner as to uphold the dignityand interest of the Association.

2] Every member must refrain from canvassing advertisers orprospective advertisers in such a way as to reflect detrimentallyupon Advertising Agents as a whole or this Association or anyAdvertising Agency in particular.

3] Canvassing is permitted subject to the condition that a membermay make known to the client of another member its owncapabilities as an advertising agency but may not submit a specificreport or detailed recommendations concerning the client’sadvertising unless so requested by him in writing.

4] No member shall pay or undertake to pay or allow to an advertiseror his agent or representative, the whole or any portion of thestandard rate of commission resulting or to result to such memberfrom any advertising medium nor promise or procure or undertaketo procure advertising space or facilities free of charge to any

advertiser, or at a reduced rate, nor supply, nor free to anyadvertiser, any advertising material, including finished drawings,or other artwork, photography, blocks, stereos, matrices or thelike, type-setting or printing nor defray in whole or in part thesalary 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. Thesharing of commission with a member or agency, or with anotheradvertising agent, recognised agent by this Association, shall,however be permitted.

5] The practice of submitting a speculative campaign is unhealthyto the growth of the advertising industry and that no membershall submit a speculative campaign to any advertiser. Byspeculative campaign, it is meant, producing a campaignunsolicited or voluntarily by any member agency and equallyproducing a campaign where the advertiser had requested oneor more advertising agency to do so, unaccompanied by a firmoffer of business.

The Executive Committee is hereby authorized to frame theMandatory Pitch Fees Guidelines and Rules which may includepunitive action against members not following the said Rules,

for implementation by members so as to ensure smooth complianceby its members, after due consultation with members, whichRules 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 slowpayment, doubtful credit or incurring a bad debt, shall immediatelynotify the Secretary of the Association and such information shall be circulated in strictest confidence for information and protectionof other members.

7] No business shall be accepted which is conditional upon the paymentof commission or fee or reward to a third party not a full timeemployee of the member either for introducing the business orfor services in connection with the account hereafter. This rule,however, shall not preclude a member from employing copywritingor production men at fees commensurate with the values of theirwork.

OBLIGATION TO CLIENTS

1] Member or agencies must continue to render full agency servicein reasonable conformity of the Association’s Agency ServiceStandards.

2] Member must retain either commissions granted by media owners,suppliers or material and services, or charge the clients a servicefee which shall never be less than 15% of the client’s grossexpenditure. Nor shall they supply material for advertising onany basis that can be considered as direct or indirect or secretrebating. Where no commission is allowed by the media owners,

suppliers or materials and services, the member will charge hisclient’s a minimum of 15% on the gross cost or 17.65% on nett.

3] Member will not accept discounts or commission, other than theregular agency commission allowed by publishers without theclient’s knowledge and consent.

4] Members must at all times use their best efforts to obtain fortheir clients the lowest rates to which such clients are entitled.Members will not give clients any discounts whatsoever, includingcash discount for early and/or advance payment, and anymember/s found to breach this rule, may be put on“Notice/ Expelled/ Suspended” from being a member/s at thediscretion of the Executive Committee.

STANDARDS OF PRACTICE



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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 tooffer the services enumerated above or services in addition to themwithout adequate remuneration or extensions of credit facilities orbanking services.

2] Members shall neither prepare nor place any advertisements, in anymedium 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;

is objectionable medical advertising and an offer of free medical treatment; advertising that makes remedial, relief, or curativeclaims, either directly or by inference, not justified by the fact

of common experience;

concerns a product, known to the member to contain

habit-forming or dangerous drug, or any advertisement whichmay cause money loss to the reader, or injury in health or morals

or loss of confidence in reputable advertising and honorablebusiness or which is regarded by the Executive Committee of

the Advertising Agencies Association of India as unworthy. Inthe event of a member proving to the satisfaction of theExecutive Committee that a client has withdrawn his account

on the ground of the member’s refusal to undertake unethical advertising (as described above) no other member shall acceptany business whatsoever from the said client.

AGENCY SERVICE STANDARDS

Agency service shall consist of :

1] A study of the product or services in order to determine theadvantages 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; andas to social conditions.

3] A knowledge of the factor of distribution and sales and theirmethod of operation.

4] A knowledge of all the available media and means which can

profitably be used to carry the interpretation of the product orservice to the consumer, wholesaler, dealer, contractor or otherfactor.

In case of the Press, this knowledge covers:

Character :Influence :

Language :Circulation : (Quantity)

(Quality)

(Location)

Physical requirements :Costs :

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.

7] Co-operation with the client’s sales work, to ensure the greatest

effect from advertising.

CODE OF STANDARDS OF ADVERTISING PRACTICE

Rules of advertising vis-à-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.

2] The success of advertising depends on public confidence. Henceno 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.

Individuals in each of these grounds should exercise responsibility as

they may properly assume, to make certain that the rules of conductare 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 andmisleading by means of implications and omissions. For instance,

it should not mislead the consumer by false statements as to :

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. Testimonialswhich 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.

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 :

Advertisements addressed to those suffering from illness. No suchadvertisement should hold out the promise of cure for serious

disease, nor contain any statement calculated to injure the healthof 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 conditionsfor the lottery or competition, or the conditions for the

distribution of the gifts.

RULES OF ETHICS BETWEEN ADVERTISERS


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 :

the imitation of the trade mark or name of the competitor, orthe 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 publicon 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


The development of sound advertising depends upon the goodrelations existing between all sections of the advertising business, and

no practices should be permitted which tend to impair such goodrelations.

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 businessin that country.

3] Misleading or exaggerated statements to an advertiser concerningthe carrying out or probable effect of a campaign should not be

permitted.

4] The purchaser of advertising in any publication or other mediais entitled to know the number, general character and distribution

of the persons likely to be reached by his advertisement and toreceive genuine co-operation in this respect from media.

5] A clear and full statement of the rates and discounts applicableto 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 31stAugust 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 mediabuying 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’ servicesOver 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 d’être of an advertising agency is to add value to a client’s

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 client’s 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 functionfrom 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 themtransparent rates based on the individual advertiser’s 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 inthis 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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4] The AOR will provide not later than the end of the following monthto the other advertising agencies, a statement which clearlyindicates 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 feesshould not amount to less than15%.

2] In the event that media releases are undertaken by another agencyacting 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 ensurethat 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 disciplinaryaction 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 disputesbetween member agencies and their clients, as well as, inter se, amongmembers of the Association – the General Body of the AAAIunanimously adopted, on Monday 31st August 1998, the following

rules pertaining to Arbitration which now form part of theMemorandum of Association and Rules & Regulations and are to be

read as Clause 68 A&B.

Arbitration between Members and their ClientsAll disputes and/or differences and/or questions which shall arisebetween a member agency and his client arising out of or pertaining

to an agreement between such member/its client may be referred tothe 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 asthe 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 toquestions of importance to the trade or of any nature whatsoever

between any two or more members shall be referred to the Associationfor Arbitration. To invoke this clause, either of the parties to thedispute 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 referredto a sole Arbitrator or more Arbitrators. The Arbitrator(s) shall be

appointed by the Association within 30 days of receipt of therepresentation.

The appointment of Arbitrator(s) shall be made by the ExecutiveCommittee of the Association, subject to the acceptance of theArbitrator(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 Arbitrationshall be Mumbai or such other place as the disputing parties mayagree upon.



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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 abilityto deliver just the right advertising your company needs, at the right

cost to you.

Advertising is deceptively simple-looking. The more a product’s sales

depend on advertising, the higher are the stakes. Good advertising can

improve sales and, in effect, improve your competitive stance. Itattracts better personnel, creates more profits, higher salaries, more

employment, provides for diversification and protects your entireinvestments 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 prepareadvertisements 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 ServiceStandards). It is advisable to select an agency that has the personnel

who are capable of doing so. Such personnel must be professionalswith expertise and experience in:

Creative: Planning creative strategies for a product, which are thenconverted 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 undergood technical supervision.

Media: Planning the media strategies to ensure that thecommunication 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 theadvertising 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 marketingtools.

HOW TO CHOOSE AN AGENCY



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Once you have chosen an advertising agency you should consider it aspart 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 andgive full details with DOs and DON’Ts, 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 bysigning) 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 wordsand 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 paidfor you. It is usual to store them with the agency forconvenience, 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 blockproofs and printers’ proofs and check for correctness before

approval. Once approval is given by you, either verbally or inwriting, 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 preventerrors 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 andtheir supply against your print order could vary by at least plus

or minus 10% which should be accepted by you.

HOW TO APPOINT AN ADVERTISING AGENCY



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AAAI member agencies work on the following standard terms. To ensurelegal protection, both to the advertiser and to the advertising agency, the

following Agreement should be set out on a Rs. 20/- stamp paper.

AgreementThis 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 itssuccessors 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 isdesirous 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 Agentsof the Client in respect of the abovementioned product(s)/ service(s),

it is hereby agreed as under1] Client’s 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 theAgency as authorized to incur liabilities on behalf of the Client. The

Agency will progress jobs after formal approval of Estimates. Thecopies 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 toincur liability on their behalf unless the Client intimates the Agency to

the contrary in writing. Cancellations or revisions requested for by theClient 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 Client’s organization. TheAgency 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 theClient 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 lossincurred by the Agency arising out of any claim and/or proceedings

initiated against the Agency for releasing the Client’s advertisements.

If the material approved by the Client is released to media or

duplicated according to their instructions and then found to containerrors 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 theAgency development, creative, design and artwork charges at mutuallyagreed 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.

TERMS & CONDITION OF APPOINTMENT



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2] Contracts & Orders

The Client shall accept the responsibility for all contracts entered intoand orders placed by the Agency on its behalf. The Agency shall beentitled to 15% as Agency commission on the gross amount of all thebills 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 anymedia 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 AgencyCommission. In the possible event of the Client choosing to place anorder directly with a Printer, the Agency reserves the right to declineto design and prepare the relevant artwork. However, should theAgency agree to do so, the Client accepts that the Agency’s charges inrespect of such work will be higher than the Agency’s usual design andartwork charges.

3] Billing Rates

Media ChargesAll charges for advertising shall be billed to the Client at theregular rates as published, unless less than 15% commission isallowed to the Agency. If less than15% commission is allowed tothe Agency, the Client shall be billed for the difference betweenwhat 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 tothe Client at cost plus 17.65% as Agency Commission. Advancepayment shall be made by the Client wherever sostipulated/required.

Artwork & Mechanical ItemsAll charges related to the designing and preparation of artworks

are enumerated in current ‘Design & Artwork Charges’ rateschedule which shall be handed over to the Client from time

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

AdministrationOvertime for urgent jobs, freight, postage, packing and anytransportation/insurance charges involved in sending advertisingmaterial on the Client’s account and telegrams/ telephones/

telex/ fax charges when specifically incurred in carrying outthe Client’s instruction, shall be billed at cost.

CreativeCopy in English for press advertisements, radio/TV/cinemacommercials, leaflets, etc., not involving any extensive researchis normally provided free of cost by the Agency. Translationsinto other languages shall be charged to the Client at cost plus17.65%. Where the Client wants a copy from a source otherthan the Agency, the same shall be charged at cost plus 17.65%.

A separate fee shall be levied for writing lengthy brochures orwhere a lot of research is involved. The fee for such a job shall

be decided by negotiations before the job is undertaken bythe Agency. Where the client initiates any work on any itemfrom the agency and later cancels or suspends the assignment,the Client will pay the cost of the agency’s 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 afterpresentation, the Agency may charge the Client for the Agencytime and the material cost involved in preparing the same.The Agency shall give credit to the Client for the said amountwhen the work is used at a later date.

ResearchIf the Client is desirous of the Agency participating andcontributing to the conceptualising, planning/interpretationof market research assignments, the Agency shall so participate/

contribute, and in such cases the Agency shall bill the Clientservice charges @17.65% of the value of the market researchbills.



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Travel Where the Client specifically requires any member of the Agency’sstaff to travel in connection with its publicity programme, it isagreed that the Air/Railway/other fare shall be borne by the Clientaccording to the position held by the staff member who wouldbe undertaking such trips, wherever possible to and from a cityin which an office of the Agency is located and the destination.In this connection, the Agency shall submit for the Client’s priorsanction, an estimate which shall be based on the following rates:

a] Any Director

Rs. _________ per day plus Air/Rail/other fare plus out-of-pocketexpenses.

b] Other Agency Executives

Rs. _________ per day plus Air/Rail/other fare plus out-of-pocketexpenses.

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.

Marketing Consultancy and other servicesWhenever the client requires the services of the Agency for specificprojects 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 Agency’s bills shall be paid by the Client in accordance with thefollowing:

PressBills shall be submitted to the Client at the earliest or by thetenth of the month following the month in which the advertisementshave been published and these shall be payable within 30 days

from the date on which the bills are received by the client.

Radio/TVBills 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 mustbe made within 15 days of the receipt of the bills.

Cinema Films/SlidesPayments of all cinema bills must be made in accordance withthe terms stipulated by Blaze Advertising Pvt. Limited/other similar

concessionaires at the time of finalisation of screeningprogrammes/ contracts. The usual procedure is to decide uponinstalment 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 scheduledfor cinema advertising shall be withheld to safeguard against ashortfall in screenings and shall become payable after the final reconciliation has been completed at the end of the screeningprogramme.

Blocks and Print Material The Federation of Block Makers, Processors and Printers requirepayments within 30 days from the date of their invoices.Consequently, the Client shall pay for these items within 30 dayfrom the date of the Agency’s bills.



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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 inaccordance with the terms laid down and the balance, if any, againstdelivery.

Art, Creative & Service Charges

All bills shall be paid within 30 days from date of receipt of thebills by the Client.

Hoardings

All bills shall be paid monthly/quarterly/yearly, in advance, bythe 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 respectiveTransport Undertakings.

5] General Terms

All bills, submitted according to the terms & conditions of thisAgreement shall be settled by the Client within the periodsstipulated in each case under Clause 4. It shall be incumbent onthe Client to draw the attention of the Agency to any discrepancieswithin 10 days of receipt of the bills.

In the absence of any such notice being given to the Agency, itshall 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]

for a period of two years from the date of execution of the work,

originals of all bills and quotations received from media owners andsuppliers who execute the Client’s jobs. The Client shall have the rightto depute its authorised representative to inspect these documents, toverify the correctness of the rate charged by the Agency. However, onno account shall the Client require the Agency’s bills to be supportedby originals or copies of supplier’s bills nor shall the approval of theAgency’s bills be made conditional on the enclosure of the supplier’s bills.

6] Advance Payments

Whenever the Agency is required to make advance payments tomodels, photographers, hoarding contractors, etc., on behalf of the Client, these shall be paid by the Client in advance. The Agencyshall execute such work only after receiving advance paymentsand against signed and approved estimates for all suchassignments.

7] Faulty Reproduction

The Client agrees that the rules laid down by the Indian Newspaper

Society/ AIR/ Doordarshan relating to faulty reproduction onadvertisements are such that they protect media owners againstsuch claims every inch of the way against the Client’s/Agency’sinterests. However, the Agency shall endeavour to ensure thatthe advertising material supplied to the media is of the bestpossible quality to eliminate the prospect of rejection of insertionsand it is agreed that the Agency shall not be held liable forrejections at any time unless it is proved beyond any possibledoubt that material supplied by the Agency to the media wasfaulty.

8] Voucher Copies

The Agency shall submit bills for Press Advertising duly supportedby the relevant voucher copies. In the absence of voucher copies,the certification of publication of the advertisements (for whichvouchers are not available) will be deemed as sufficient proof of publication of such advertisement. The Client agrees not to insiston certification for Radio broadcasts and TV telecasts as theseare normally not supplied by All India Radio and Doordarshan.



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9] Certification for Cinema Screening/Slide ExhibitionsThe mode of certification shall be as finalised with BlazeAdvertising 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 provideup to 90% certification of the total number of screening weeks.

10] Copyright

The copyright in all jobs created by the Agency, including pressadvertisements, 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 Agency’s work, the Client agrees to pay a

75% surcharge on the Agency’s 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

Agency’s 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 Agency’s charges have been fully paid.

The Agency shall return available stereos, artworks, blocks, etc.,

subject to getting them from printers, publications, etc., in as-iscondition.

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 beingless 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 withthe Client’s product(s)/ service(s).

The Client agrees not to appoint any other advertising Agencyto 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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12] TerminationTermination of this Agreement shall not become effective until

90 days after the receipt of the notice of termination from either partyto the other. The Client agrees to pay for all authorised work inprogress at cost together with the regular Agency Commission, and theClient assumes the Agency’s liability under all outstanding contractsmade on the Client’s behalf.

In Witness whereof the Parties hereto have set their hands to This

Agreement on this ______ day of ________________ 20________.

Signed, Sealed & Deliveredon behalf of the within named Client

by[name & designation of Authorised Signatory]

in the presence of [name and address of Witness]

Signed, Sealed & Deliveredon 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. Remembererrors could happen.

ii] wrong date

iii] wrong position/page – as requested/guaranteed.

iv] bad reputation – remember it may not be the agency’s

fault; the agency did not make the block operate the press.The fault usually lies outside the agency’s control.

A Print job needs these estimates:

Artwork, Estimate, Print Estimate (Including block making, platemaking, 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 thePublication or the Printer by neglecting to get a proper Estimate.

HOW TO AVOID DISPUTES



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2] Billing

Errors in Billing

Voucher copies – it is often difficult to get voucher copies

from publications – these could be due to many reasons, someof which could lie beyond the agency’s control. If bills wait

for voucher copies they can be considerably delayed, causingother 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 haveappeared, but were not billed due to non-receipt of vouchercopies. 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 enoughproof 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 immediatelyon 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.

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. EachEstimate must give the list of publications selected, size of ad, special

position if any, number of insertions, rates, and may be taken from acurrent 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 isreleased. Leave a copy of the Estimate with client, and you should

have at all times the copy with the client’s signature in yourpossession. 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 – asdate change but the supplement will not; and so that publication may

be clear when releasing these ads. Also mention edition with dates ineach care. For example many advertisements often have reverse letters

or solid letters on a screen background which render the contract toolight for the purpose; it is a source of printing difficulties, e.g.

smudging, etc., and is simple asking for trouble. Such advertisementsmust be discouraged. Ad length of part cm is calculated to the next

cm. Lastly, the rate is to be mentioned wherever possible.



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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 andalso 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 client’s side. At this

meeting, the agency’s representative should go through these bills

with the client’s 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 ontheir 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 theconcerned 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

client’s 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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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 sameagencies 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 setup 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 – mediaplanning, research, copy, art, film, TV, radio, printing, AV and so on.

As the years pass, they acquire breadth of experience over a widespectrum of products and services, which can be harnessed to youradvantage.

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 objectiveview. A little objectivity at the initial stage may ensure timely advice

and save you from costly blunders. (I know from experience that somepeople do not even bother to register their trade mark – withdisastrous consequences later on.)

Partnership

The agency-client relationship has been described as a close workingpartnership 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 inferioror subordinate. This is altogether wrong. An agency is not subordinateto your company, nor is an agency executive a subordinate of yourmarketing people. He has an independent status. To bruise his ego is

not the right way to get things done.

THE AGENCY – CLIENT RELATIONSHIP



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Infect your agency with enthusiasm for your product or service.

Demonstrate the superiority of your product or service to the agencypeople as you would to a prospective buyer. Share with theminformation on the advantages that you have over competitiveproducts. This, of course, includes market research findings. Mark acopy to the agency of every appreciative letter you receive fromconsumers. 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 sendsterritory-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 veryconcept stage of a new product. The brand name and the surface designof the pack in the case of consumer products can have a bearing onadvertising effectiveness later on. Sometimes your agency will be ableto 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. Someadvertisers give a written brief, some brief their agencies in person,

others expect their agencies to hang around and ferret out a brief forthemselves. A written brief is the best; ideally it must contain athorough review of the current year, and marketing plans for thecoming 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 informationabout competitors in relation to product quality, price, packaging,promotions and advertising. How do you intend to countercompetition in the coming year? What is the weight you will assign tothe various elements in the marketing mix? Any improvements in your

product, pricing, packaging or distribution? How do you perceive theclimate for selling?

A brief is usually more valuable if it is backed by research. Manyadvertisers seem to grudge small amounts of money on research whilethey will cheerfully part with large sums for media expenditure.Research can help to provide guidelines for your advertising. Seek youragency’s advice on this if you don’t have research personnel in-house.

Define your marketing objective clearly, and work out the advertising

objective. It’s better to give a clear indication about the budget you canafford. Some people ask the agency for a budget with detailed workings,and then disclose that they can afford only a small fraction of theamount. This can be quite demoralising because detailed media planningis a back-breaking exercise. Be candid about what you can spend, andre-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 formethodology that will help you.

Encourage your agency to clear with you, in advance, the main pointsto be covered in the advertising. These days. What you say in your adis much more important than how you say it. If there is agreement onthe content of your advertising, much heartache can be avoided lateron when detailed proposals are presented. Agencies generally try toarrive at what is generally called a “copy platform”. The definition maychange from agency to agency; it’s usually a written plan thatcontains the most crucial information about the product or service andexplains 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 creativestrategy, agreed between client and agency as the starting point increative work”. He was of the view that the document should definethe target consumer.Streamline your approval procedure. Who in your company approvesthe advertising proposals prepared by the agency? Ideally, he shouldbe the one to whom the agency must present the advertising plans.Make sure that the brief and the strategy document had his priorapproval. Care should be taken to see that approval (or rejection) isnot based on whims and fancies. In one company I know there was aconvention that the right to reject anything also carried with it theresponsibility to explain why. And whoever wanted a finger in theapproval pie had to make their comments at the agency presentation.Hierarchical and committee models for approval were generallydiscouraged.



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Creativity

You can drive agency men crazy with inane comments. “It doesn’t

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 thelevel 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 mutuallyexclusive; 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 theyhave 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.

A few months back I wrote on what an Advertiser should do to get thebest out of his ad agency. A short manual in fact on how to be a goodclient. I promised you then, that some day I would present theAdvertiser’s 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 helpmake my task easier). The speakers were J. C. Chopra, SeniorVice-President of Voltas. Gurcharan Das, Managing Director, Procter

and Gamble (I) and Shashi Dash, Managing Director of Polynova

Industries. Farrokh Mehta, Director, Agricultural Products, Pfizer, wasthe moderator.

Listening to Chopra, I realised that a manual on how to be a goodagency would not be easy to write, because an ad agency has clientsof different levels of sophistication and expertise in handlingadvertising. There are thoroughly unprofessional tycoon types who seeadvertising as a means to massage their ego. There are professional managers with not enough experience who drag advertising down totheir level of incompetence. There is a third group which interactsintelligently 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? It’s atough job. Manuals don’t help.

I once asked the late P. N. Sharma who was the Chairman of OBM. Howhe dealt with tycoons with an overgrown ego. He told me his approachwas simple: he’d present really professional work the first time. If itwas rejected, and the tycoon wanted to pander to his ego via

advertising dictated by his own whims and fancies, well, that was hisbusiness. After all, it was his money.

Chopra talked about advertising undertaken whether distributiontarget group analysis, and without ascertaining whether distributioncovered the areas where advertising was scheduled. He had seen a lotof waste – money unprofessionally spent. He gave the example of thetextile industry, many constituents of which had squandered money onadvertising of this kind.

An agency chief once told me how a textile tycoon ran his adcampaign. The agency would be asked to prepare a number of ads.These would be displayed on a long table in a large room. The tycoonwould then arrive, accompanied by his minions, and he’d pick out theads he liked.



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“This one…yes, 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 managingdirector’s mistress being called in to judge the effectiveness of a radio

jingle, or the Chairman’s wife (whose articles appeared in her college

magazine years ago) being asked to re-write agency copy, don’t

dismiss them as imaginative gossip.

Second group

The ego problem is not confined to tycoons. Under the brand managersystem, 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 manager’s post is just one rung in a man’s

promotion ladder, and his main concern may be to please the oneswho 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 mightchange: 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 Ifeel 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, I’m told; a housewife would liketo 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 thecreative execution over the years.

“Where there’s Lifebuoy there’s 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 brandwhich has not changed its stance; modifications in the creative

execution have stayed within the overall strategy. And Colgate hasn’t

budged one inch from its leadership position.

But doesn’t 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 stayedwithin this concept. Result: many people thought it was more

expensive than Polson’s 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, whichpositioned it against milk (which is the nearest to a complete food in

people’s mind), was given adequate airing, sales registered a

substantial rise. What a children’s 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 ahealthy 19 per cent of the market. Forhans, of course had a problem

with the younger generation, who didn’t suffer as a rule from gum

troubles. So someone decided to change the brand strategy. Some of

the new headlines: “At 18, you’re more interested in a slim body, newhairstyles and a budding romance. You have no time for your ‘precious

32’. That’s when Forhan’s Dental Care works hardest for you.” “At 24,

you’re pre-occupied with meeting friends, shopping and setting up

house. You hardly take notice of your ‘precious 32’. That’s whenForhan’s Dental Care works hardest for you.” “At 28, you’re concerned

about your career, growing expenses and a bulging midriff. You barely

think about your ‘precious 32’. That’s when Forhan’s Dental Care works

hardest for you.” Forhan’s 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 upa “position”. He narrated the story of someone’s advertising for aone-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 consumer’spoint of view. Shashi Dash placed objectivity above creativity; he

wanted the agency to come up with the buyer’s 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 thegood agency. Shashi Dash’s 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 agilityto handle market changes, innovative use of media and expertise inbusiness 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 didn’t perceive advertising

as an art form or as a means to provide entertainment. The main jobwas 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 inHindi. He thought it was easier to render Hindi ads into Indian

languages. (This has another advantage: a Hindi writer is better ableto call up images which reflect the Indian life-style and thus establish

instant rapport with the target group.)

He also invited the audience’s attention to radically differentapproaches 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 worthstudying; 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 theproliferation of ad agencies with low billings and low professional

calibre.



29

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 andbills 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. 8,000–20,000)

4] FILM

AV (Rs.30,000–60,000)

Film script storyboard (Rs.20,000–1,00,000)TV Slide (Rs. 4,000–10,000)

Adaptations (Rs. 3,000–8,000)Cinema Slide (Rs. 8,000–20,000)

5] OUTDOOR

Banners (Rs. 2,000–8,000)

Kiosks (Rs. 12,000–30,000)

Van Design (Rs. 8,000–20,000)Hoardings (Rs. 8,000–20,000)Adaptations (Rs. 2,000)

Pavilions (Rs. 50, 000–1,00,000)

RECOMMENDED ART CHARGES



30

6] SYMBOL/LOGO

Rejection fee (Rs. 8,000–25,000)

Design used (Rs. 40,000–80,000)Corporate image (Rs. 50,000–1,00,000)

7] ANNUAL REPORT

Upto 24 pages (Rs. 80,000–1,60,000)

8] CALENDARS

Wall Calendars (Rs. 40,000–80,000)

Desk Calendars (Rs. 12,000–20,000)

9] CORPORATE APPLICATIONS

StationeryLetterhead

Envelope

Visiting CardTypical Stationery for Office UseTypical Stationery for External Use

Environmental

Factory/Office – SignVehiclesDecorations

Directional

Directional SignsOffice entrance location

Hoarding

Total Amount (Rs. 80,000–1,60,000)

Only Letterhead, Envelops(Rs. 8,000–16,000)

and Visiting Card

N.B.

Cost of blocks, positives, bromides, artpulls, progressive proofsin black & white and colour will be as per the supplier’s bills to

the agency.

Cost of translations, artworks will be as per the supplier’s tothe Agency.

Whenever 15% Agency commission/trade discount is not givento the Agency, then the Agency will charge 17.65% of the netamount, to the Client. Some of the items are modeling fees,

props, travel, boarding and lodging, out-of-pocket expenses, etc.



35 Maker Tower 'F', 3rd Floor, Cuffe Parade, Mumbai 400 005.Telephone: (022) 2218 2164 / 2218 7609 Fax: (022) 2218 9590Email: [email protected] Website: aaaindia.org

For Private Circulation Only. 2005

official handbook

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