Traditional ad agencies are now tweaking themselves sell start-ups
In a tough start-up environment, ad agencies are looking to find solutions which would help these start-ups become large brands.
The year 2016 has been a tough year for start-ups as valuations have take a back seat and investors are demanding revenues.
In this scenario where advertising is being led by e-commerce companies or start-ups, traditional advertising agencies are tweaking their business models to suit the new market.
Global ad agency Publicis Group recently launched the Drugstore India, an innovation facility that fosters relationships between large companies and early stage startups for mutual benefit. The agency acts as a mediator and brings together start-ups and large corporate.
Anil K Nair, CEO & MD, Digital L&K Saatchi & Saatchi and Drugstore says, “We believe that large brands and start-ups can benefit from each other. We at Publicis are trying to build a bridge between both these ecosystems. Nobody is looking at this because the young start-ups feel that large corporate have not much to offer as they are rigid, process intensified, IP driven, etc., while these guys are into collaborative, sharing, fast in execution."
"Having said that large brands are sitting on large customer data and huge resources, while start-ups sit on qualities like speed or quick reaction time. And in today's world I don't see why these two should not be talking to each other. And all we are doing to put it in simple words is starting dialogues,” he said.
Drugstore uses the expertise and experience of the all the agencies under the Publicis Group companies such as L&K Saatchi & Saatchi, Publicis India, Leo-Burnett, MSL Group and Razorfish. The company has several large multinationals which it works with for media solutions and is now looking to give that additional push to clients in order to keep pace with the fast paced world today.
Another ad agency which is taking a more involved approach in assisting start-ups is Pune-based Seagull who has launched the Brand Launch Centre (BLC), a start-up accelerator. It is focused exclusively on launching new brands from its initial stages of set-up to planning, mapping its course, creating its brand identity and finally launching the ad and PR campaign.
It even has created a 2,500 sq ft centre in Pune from where the start-ups can work and the BLC provides them with assistance in the form of HR planning, financial and legal planning, PR, advertising, media planning, market research and other services.
It has already helped in the launch of over 14 brands which include start-ups such as electric bike maker Tork, waterless car-wash product maker Green Salute, sweets delivery service Flavors of My City, real estate start-up Aapla Ghar and more.
Sameer Desai, Chief Strategy Officer of Brand Launch Centre says that most start-up incubators take a stake in the companies for their assistance, while the Brand Launch Centre is a service that is offered to them at a fee that depends on the services they take. He says as they are also well connected with angel investors they could also help them get the investment they needed to take their venture ahead.
Desai says they have three process for start-ups, ie the profit brand launch planning stage, followed by launch set-up stage and launch roll out. The service offered to start-ups are over 180 days and could be less depending on which stage they are in. The charges too depend on what services they are looking for and the particular stage they are currently at, says Desai. Their co-working space are offered at around Rs 7,000 per seat.
Drugstore, on the other hand, works on a consultancy basis for some of the tailored services it offers such as Supper Club, Hackathon, Incubator and finally the brand investing in a start-up.
So what do ad agencies have to benefit other than the fees for its services? The benefit would be like striking gold as they could benefit immensely if these start-ups become the next Facebook's or Google's of the world.