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Big brands face local battles in India

News, 09 June 2016

BANGALORE: International brands in India cannot rely on national advertising campaigns to persuade consumers, an industry figure has said, but will have to fight a series of local battles across the country.

"Competition is no longer between two large national brands; competition is starting to become local," according to Baskar Subramanian, co-founder of TV ad network Amagi.

"The Unilevers, P&Gs and Glaxos of the world need to win regional turf wars, not one big national war. That is going to be the fundamental problem facing brands, going forward," he told Afaqs!

Amagi operates in a unique position between agencies and broadcasters, buying inventory from the latter, then slicing the satellite beam to enable different advertisers to show their ads in specific markets – down to city level – during the same ad spot.

"Broadcasters look at us as buyers of media – they look at us as agencies," Subramanian explained. "Agencies and advertisers look at us as broadcasters."

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The options offered by Amagi are clearly attractive to smaller local businesses which are able to advertise on mainstream channels – and 60% of the advertisers using them are SMEs – but major brands also use the service since "every advertiser in the country, including a Lifebuoy, is actually a regional brand".

"No product sells uniformly everywhere," Subramanian stated.

National advertisers are able to use Amagi's offer, for example, to boost their TV advertising in specific markets and that is likely to have an adverse impact on other media.

Where once national brands would use print or radio advertising for such top-ups, "now, the conversations happening are: 'Should I do out of home or Amagi?', 'Should I do BTL or Amagi?', 'Should I do print or Amagi?'"

Subramanian also noted advertisers' very different perceptions of ROI. "SMEs look at the instant response they get, like store footfalls and sales, as these are a lot more tightly linked to their advertising … Large advertisers need to be auditable, so they look at GRPs."

Data sourced from Afaqs!; additional content by Warc staff