What was once a preserve of the upper-class elite, to be protected from the lower classes, is today becoming a mass movement! There are many ugly stories behind the growth of the education sector and the obsession with higher education for purposes as low as ‘better dowry’. Testing services are worried that over 50 per cent of the students in Class 5 across both rural and urban India cannot do the Math tests meant for Class 2. IT companies lament the poor quality of Indian engineers to the extent that experts like Narayana Murthy have gone on record to say that over half the engineers produced by the engineering colleges of India cannot be called engineers; which reminds me of a cartoon in our IIT Madras magazine, Campastimes, in the ’70s and I quote (sic): ‘Six Munths Agao I Cuddn’t Evun Spull Engunier. Now I are One.’ Amen.
Zindagi Ke Saath Bhi, Zindagi Ke Baad Bhi!
‘Aap ka agency ka capacity kya hai?’ (What is the capacity of your agency?)
The question floored us. This was the mid-1990s, the stock market was boiling hot. All agencies had set up specialist IPO or financial services arms. Trikaya had Trikaya Options. Agencies like Pressman, Ad Factors, Clea and Concept were growing by leaps and bounds. FCB Ulka set up FCB Ulka Futures and Basudev Biswas was picked to run the division. He managed to locate some potential clients and one such client was in our conference room. And the MD of this company, Vatsa Corporation, asked us this question. We did not understand the import of this question. We told him we have a lot of experience across numerous categories like foods, cosmetics, personal care products and he was thrilled that we had so much experience. So he asked again, ‘Kya capacity hai?’ We requested him to explain. He said, ‘If I ask you to spend ₹10 crores on a launch campaign for a new product, can you do it?’ We replied, ‘Yes, of course.’ He asked again, ‘What if I want ₹50 crores to be spent, do you have the capacity?’ It then dawned on us that he wanted us to take the financial risk by spending the money and then wait for him to pay. I immediately told him that as per our guidelines we insist on advance payment till we establish a credit system with a new client. They quickly left the conference room. We realized how vulnerable an agency could be in the go-go days of IPO boom. I suppose they visited many agencies and we did see a full-page ad in a daily newspaper a few days later. I am sure the agency concerned which had the ‘capacity’ would have written them off as bad debt. Financial advertising, especially IPO advertising, has often given the ad industry a bad name, and no wonder SEBI developed such stringent guidelines that in the later years, IPO advertising came to be known as ‘Tombstone’ ads in the business. Unfortunately, in the late 2000s and 2010s, the IPO market became so dormant that it has probably hurt growth plans of many small- and medium-sized companies.
PITCH FEES: Clients sometimes offer to pay a ‘Pitch Fees’ when inviting agencies to pitch for their account. The sting in the tail could be that by paying the fees, they can claim ownership of the idea. So watch out, the generous client may not actually be that generous.
While equity culture in India is growing in fits and starts, one financial product seems to have got universal recognition and acceptance: life insurance.
What has Bollywood got to do with life insurance in India? The parliament of India passed the Life Insurance Corporation Act on 19 June 1956 creating the Life Insurance Corporation of India, which started operating in September of that year. It consolidated the life insurance business of 245 private life insurers and other entities offering life insurance services; this consisted of 154 life insurance companies, sixteen foreign companies and seventy-five provident companies. Life Insurance Corporation celebrated its fiftieth anniversary in 2006 and adopted a new, more modern, identity of LIC, in rich gold and blue. LIC is synonymous to life insurance in the country. Their promise is captured in their long-running slogan, ‘Zindagi ke saath bhi, zindagi ke baad bhi’ (During life and after life). Stories of the work done by LIC agents is legendary and LIC has managed to maintain a strong network of agents. At one time, it was reported that the famous Hindi actor, director and producer Raj Kapoor’s daughter, Ritu Nanda nee Kapoor was the number one LIC agent in India. More than mass media advertising, LIC managed to create a band of loyal agents who were its advertising media. The company used various perks, like creating a ‘Chairman’s Club’ for elite agents, giving them special privileges like extra commissions, special training and the use of specific titles on their visiting cards – all that adds to building status for the agent.
With Mrs Indira Gandhi’s government nationalizing the fourteen major private banks in 1969, and another six in 1980, the major lenders to Indian industry became government-owned. Marketing and advertising was used by banks only to tom-tom government schemes and loan melas, as they were known. In all their life, none of the government-owned banks used any film star in their advertising. In fact, they abhorred advertising of all kind and saw it as a necessary evil to be used only when in dire need, like a 1000th branch inauguration by the chief minister of the state. Only then an ad happened.
ICICI, or Industrial Credit and Investment Corporation of India, was set up as an industrial investment corporation in 1955. ICICI set up a bank in 1994, and later the parent company merged with ICICI Bank. It was ICICI Bank, under the leadership of KV Kamath, that started tapping the potential of mass media advertising to build a financial services brand aimed at the middle-class market in India. One of the boldest things that ICICI Bank did was rope in Amitabh Bachchan as their brand ambassador in 2001.The bank claimed that Mr Bachchan’s universal appeal would help them communicate their brand message, that customer’s would find it safer, simpler, smarter to transact with ICICI Bank … to a large diverse customer base encompassing people from all sections and life stages. The ads featuring Amitabh Bachchan were soon followed by a powerful campaign with the tag line, ‘Hum hai na’ (We are there for you). The bank also moved to a more modern identity in 1998, featuring the ‘I man’, as the logo is referred to. By adopting a strong marketing and advertising stance, and using the power of technology, they innovated across the spectrum including Internet banking and mobile banking, ICICI Bank became the fastest growing bank in India. If you had said in 1990 that a bank would use a film star to build its brand image, you would probably have been scoffed at, but in the India of the 2000s that strategy has worked so well that today several banks, both privately-owned and those with significant government holdings use assorted stars to build their brand equity.
Financial products and brands have used advertising to connect with Indian consumers in many different ways. Often, advertising attempted to simplify the complexities of financial instruments and processes.
For instance, when the Hongkong and Shanghai Banking Corporation (HSBC) bank was launching India’s first automatic teller machine, it had to explain the concept of the ATM to a bank customer who till had been used to going to the physical bank for his money. So the word ATM was converted into a new acronym: Any Time Money. The Any Time Money concept caught on dramatically. From India’s first ATM in mid-’80s, today there are probably thousands of ATM machines around the country. I know of some bank customers who don’t visit the physical bank premises at all.
Or take the simple fixed deposit. The common misconception is that once you put your money in an FD (fixed deposit), you cannot pull it out without incurring significant loss of interest. Again in the mid-’80s, Citi Bank decided to create the concept of an ‘Unfixed Deposit’1. Simply put, the bank converted every deposit into sub-units of a smaller quantity. So if you have a big deposit and you need to withdraw a small amount, you can still do that by breaking one part of your unfixed deposit. The campaign created and run by JWT, then HTA, the long-time agency of Citibank was a big success.
In conservative Tamil Nadu, fixed deposits ruled the roost and it was rumoured that an ad in the Hindu was worth its weight in gold, literally. The Hindu management was also particular to preserve its heritage and rejected ads from unscrupulous companies. Reputed finance companies like Sundaram Fi
nance had queues forming outside their offices on 1 January by customers who came to claim their wall calendar, as it was seen as a good luck charm.
Taking a loan for anything except for business was still seen as taboo. If a loan was taken for a wedding, it was taken behind closed doors.
One company changed the dynamics of home loans in the country – HDFC or Housing Development Finance Corporation. HDFC was set up in 1977 as a housing mortgage company and slowly spread its wings. It did not use much mass media advertising, except for some print advertisements. But they used other means of building credibility. For example, builders were encouraged to put up signages saying that the building had been ‘cleared’ by HDFC. I remember when I bought my first apartment in 1987, I had taken a home loan for ₹1 lakh. One of my neighbours wanted to see my loan agreement and requested for a copy of the same. When I enquired why, he explained that if you can get a loan from HDFC, it is likely a guarantee that the builder had adhered to all building and city norms.
The aversion to taking loans for furthering one’s lifestyle is changing. Times of India, 2 December 2014, reported that 22 per cent of urban families have loans to repay, and of these loans, 82 per cent were loans taken to finance housing, education and marriage2. In fact, the average urban debt has moved up from ₹11,771 to ₹84,625, from 2001 to 2012, says the same report. So it looks as if the floodgate have opened, slowly but steadily. Automobile companies report that over 70 per cent of all cars are bought through finance schemes. Even mobile handsets are being sold with attractive EMIs. The breed of products and services that are being sold through EMIs include holidays, television sets, jewellery and more.
If advertising has had a role to play in the growth of banking, insurance, home loans and mutual funds, should the stock market be far behind?
The first company to tap the power of advertising to build a stock market culture in the country was probably Reliance Industries. As Mukesh Ambani, Chairman of Reliance Industries Ltd. told his shareholders in June 2012, ‘₹1000 invested in the IPO (initial public offering) of Reliance Industries in 1977 would be worth ₹7.78 lakhs in 2012, a compounded annual growth rate of 21.6 per cent’3. Well, if the stock market has been such a good performer, why is it that most Indians still park their money in gold and fixed deposits in banks?
The answer probably lies in the unscrupulous ways in which the stock market and the IPO system was manipulated by operators like Harshad Mehta. Using loopholes in the Indian banking system, operators played the market till the hand of law caught up with them in November 1992. Playing the market for a period of ten years, Harshad Mehta had corrupted the system and destroyed the credibility of the stock market. The overhang of the IPO scams still continues to smell bad. It is unfortunate that even though the stock market may give better returns, Indians continue to park their savings in fixed deposits, real estate and gold. For instance, Hindustan Times, 22 April 2015, showed that over a period of five years – January 2010 to January 2015 – NSE Nifty Sensex went up by 10 per cent, real estate by 9.7 per cent, gold by 5.8 per cent, bank fixed deposits by 9.3 per cent and post-office deposits by 8.8 per cent – this is the pre-tax compounded annual growth rate. If you apply tax to this, the returns from stocks would be significantly higher4.
Credit cards have had a slow start in India, though thanks to the spread of ATMs, debit cards have had a booming time. Even e-commerce merchants have figured out that getting Indians to use their cards is a problem and have deployed the cash-on-delivery model. But as we move forward, they will have to move to electronic payment systems. There are sufficient examples of pure credit/debit card plays. For instance, BookMyShow sells 10 million tickets a month purely through cards. And I believe that is the way to go.
MasterCard is one of the global majors in credit cards and they measure their market share as the ‘share of personal consumption expenditure’ of the whole economy. In markets like Korea, they reportedly got the government to levy a cash surcharge. This works as a win-win across all players, except the people operating in the grey economy. Handling electronic cash is so much cheaper and every single dollar is traceable. In India, we have often seen the opposite. Many merchants will give you a cash discount if you brandish a card at them. MasterCard also has a global advertising campaign named ‘Priceless’, which it has been running from the year 1997. When FCB New York was handling Citibank, it had an iconic tag line ‘The CITI never sleeps’ which ran around the world. In one of our global meetings, we were introduced to the concept of ‘Lifestage Marketing’ which was the buzzword at that time. Research had shown that a bank customer is a bank customer for life, unless he is faced with a lifestage change. So the time to get a customer to switch is when they get married, or when they change their job or when they shift home or city. Citibank successfully leveraged this learning and today a number of Indian banks too are adopting these strategies powered by data analytics. For instance, some banks can predict, based on your credit card usage, if you are going to default or if you are going to shift to another brand of card etc. The banking industry is probably at the cutting edge of using data in advertising and marketing. Some of these banks are running well over 100 different email campaigns every month to tap the right customer at the right time.
The Indian income pyramid is changing. Of the total 240 million households in India, the deprived (below ₹1.5 lakhs a year) is still a huge 135 million, but the aspirers (₹1.5 to 3.4 lakhs) has grown to 71 million, with the middle class at 31 million (₹3.4 to 17 lakhs) and the rich at 3 million (above ₹17 lakhs), according to the NCAER CMCR 2010 report. According to Kotak Wealth Management’s ‘Top of the Pyramid Report 2015’, there are 1,37,000 ultra high net-worth individuals in India, each with a net surplus capital of ₹25 crores5.
As the JWT Campaign India magazine report on Changing India, dated 7 October 2011, says, on the face of it, the Indian investor has not abandoned his traditional conservative ways when it comes to his personal investment philosophy, but there is a clear sense of an increased aspiration that is fuelling rapid changes in the financial landscape in the shape of acceptance of expertise and technology. There is a growing desire to use expert advice – often on an online portal. Over the last twenty years, financial brands have grown in stature and recognition. Personal finance is today powered by technology; frequent trips to the bank have reduced; online payment of bills is becoming more and more common. The young have embraced technology rapidly with mobile banking becoming a big driver. The woman of the house has transformed from housewife to home manager to home finance manager. Growing awareness is leading to more focused financial planning for key life events. Banks across the world have discovered the truth behind what is known as ‘Lifestage Marketing’; target consumers who are moving from one life stage to another, from student to working person, from single working person to a couple, from a couple to a couple with kids and so on. In India, till recently, each of these segments were small from a big brand perspective. But that is rapidly changing and each segment is now becoming a large, juicy piece.
Advertising is also reflecting this growing trend. For example, a recent advertisement for HDFC Life, a life insurance company, was about a father and his young child who had a physical disability; the father saves wisely so that his daughter’s dream of becoming a dancer, in spite of her disability, comes true.
Even humour has become a staple for financial services ads. In an ad for a mutual fund, a middle-aged man is shown reading a newspaper in a small Irani café. The waiter comes to his table, places a hot cup of tea, but then he stoops to take a sip from the cup before moving on. The customer is shell-shocked, as the voiceover rolls in with ‘Is your mutual fund taking away what is truly yours?’ The company promises to be transparent with the way they treat their customers – no hidden fees, no hidden charges.
Advertising is, as yet, not a powerful force in financial marketing, the way it has been in other product categories like telecom/mobile or automobiles. I suspect it is bec
ause public sector operators are still a major force in Indian banking and they are shy of using advertising. Secondly, the public issue market in India has had a rather roller-coaster ride thanks to unscrupulous operators. I also believe that the prevalence of huge amounts of unaccounted cash in the grey economy hinders the purposeful use of capital. Even today, in most parts of the country, purchase of gold and real estate is through cash. And cash purchases do not need the push of advertising. Therein lies the rub.
For the country to grow and achieve its rightful place in the galaxy of developed nations, it is important that financial inclusion and financial literacy become the mantra. On 9 May 2015, Prime Minister Narendra Modi launched innovative group insurance schemes and group medical insurance schemes. Money transfer from the government to the poor is going to go the electronic route. All these spell good news for the legitimization of capital. Hopefully, this will lead to greater transparency and accountability. Then we can see advertising step in to take consumer adoption to the next level.
God’s Own Country
HOW TO SELL airline travel to Indians in a post-Mughal, post-British Raj, independent India? Make them feel like a maharaja of course.
The Air India Maharaja was the brainchild of the puckish, irreverent Bobby Kooka, who headed the airline’s advertising function from the 1930s to the 1970s. Anvar Alikhan, the advertising industry veteran who has written extensively on the growth of Indian advertising and advertising icons, has a special place in his book for the Air India Maharaja and Bobby Kooka: the little Maharaja was not born suddenly, as people imagine, but, rather, he evolved serendipitously over a series of many avatars. The very first one was in 1939, on a poster that showed a turbaned character being carried aloft by four eagles – a take-off on an old Persian legend. There was an immediate outcry from Bombay’s Parsi community, who protested to JRD Tata that it insulted a much revered Zoroastrian figure. In 1946, the Air India Maharaja first took the form in which we recognize him today. By 1950, the Maharaja had acquired all the elements of his final form: the stripped turban, the twirled mustache, and most importantly the mischievous sense of humour flawlessly executed by the long-running agency partner of Air India, HTA (now JWT). As Bobby Kooka is reported to have said, the Maharaja ‘…would make the point that needed to be made, but he’d do it differently: with wit, with charm, with style. He’d poke fun at everybody, and everything, in sight (most of all himself ). He could be anything in fact, except boring.’ Undoubtedly, the Air India Maharaja was the most popular advertising icon of its time. In the 1980s, he lost some of his charm and wit. Though the Maharaja was dismissed from his services for some time in the ’90s, in the 2010s, he has been brought back; but somehow he lacks the wit that Bobby Kooka had so carefully nurtured1.
Nawabs, Nudes, Noodles Page 16