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Sri Lanka to see new product brands emerge with economic revival
Exclusive interview with managing director of BBDO Sri Lanka
Zulfath Saheed
LBR,Friday 16 December 2011

Sri Lanka’s economic revival driven by a tourism and infrastructure boom has brought into the fray new products and services seeking brand recognition outside the established multi national brands in the island.

Santosh Menon, the managing director of BBDO Sri Lanka, part of the US based global ad agency which commenced operations in the island three months ago, spoke to LBR on the emergence of these new products and services as well as new trends in both the local and global advertising industry.

LBR: What prospects do you see for advertising in Sri Lanka going forward, especially with the boom in the tourism sector and new firms coming in trying to build awareness on their brands?

A: When we did our analysis before deciding to come and start our standalone agency in Sri Lanka, we evaluated it by looking at three or four points of data. One was a projected growth in GDP. The growth rates referred to are high single digit numbers for the next 10 years and that’s what is projected. The second thing is private consumption expenditure. It’s very clear that in the last two years we’re seeing a significant increase in private consumption expenditure. Household personal consumption has gone up by 18 percent. It shows that people are spending more and people have more purchasing power. Thirdly advertising spend is going up. It’s very clear that the advertising industry is spending a lot of money behind categories. The fourth point is that there are several categories like personal care categories where there are huge opportunities. We believe that sri lanka is a country with a lot of opportunity across segments. Many of the categories still have either one brand and some of them are not commoditised. You really have an opportunity to come here and get into the marketplace and do some great brand building work.

LBR: What in your opinion are the largest challenges facing the ad industry given how much the landscape of advertising has changed over the years.

A: What’s most interesting is the speed at which some of these changes are happening. A few years ago if you needed to get people onto a website, you would go to mass media like traditional media, communicate it on traditional media and make it interesting for people to go to the websites. Nowadays in this part of the world as well, sometimes things that are happening on the internet is driving traffic to mass media. For example recently a video done by a tourist in Africa where he shot a whole herd of buffalo fighting off lions. He had that virally on youtube. That got a few million hits and before you knew it mass media channels like television picked that up. It’s a changing landscape, nobody really knows all the rules. Brands are playing in there. BBDO in the region is doing a lot of work virally for many of our clients and brands. I think the challenge is to stay on top of the change. To go with the flow, understand what the rules are, and understand what the consumer insights are so that you can come up with brand building ideas and use this digital way to add value to your clients and their brands.

LBR: There’s concern that with digital media coming in that traditional media like television, radio would die out in terms of promoting brands. Are you saying that it’s more of a symbiotic relationship, that they can help each other to carry on?

A: I don’t think there is any threat of traditional media dying out, not in the short or medium term. In fact there are interesting statistics coming out which show that readership of magazines has now increased because it’s now available on the iPad. That indicates that those who are running magazines and television and very smart. They can see that there is a movement in consumers and viewers on their computers and mobile phones, and they are tailoring their products, content and feeds also to these channels. If you’ve got an iPod, an iPhone you can actually see television content on your pod cast. I see this as being a symbiotic relationship and I think the evolution is going to happen. It’s not that TV is going to die away, it’s that the way in which you watch TV, where and how you watch TV, that’s what is going to change.

LBR: Most firms now are looking at social media as a platform to promote their brands primarily because it makes economic sense for them to do so. How are ad agencies facing up to this challenge?

A: We call ourselves a young business in advertising. A lot of us start very young in the industry, and this is an industry that needs people with energy and youthful ideas. I think advertising personnel are also bi propagators of Facebook, Twitter etc. we as ad agency people need to continue to understand how these forms of social networking function. We need to understand how to stay on top of it and bring the brand in such a manner that it engages and creates relevance for the consumer. You need to find purpose for your brand. If you’re able to find purpose for your brand beyond the way in which you are normally used to doing in the context of traditional media, you will use social networking very well for your brand. We in advertising are learning very fast and all international advertising agency networks are doing excellent work in selling items on social networking sites which have been big hits for brands and for clients.

LBR: How spread out are BBDO’s operations and where do your largest clients come from?

A: We have 288 offices in 80 countries. In the last few years there’s been a strong emphasis on Asia and many of our clients are looking are looking at this geography as one where growth rates are going to emerge in the future. BBDO has also been aggressively promoting itself and opening offices in Asia. We have several large clients already in Asia including Fonterra, Proctor and Gamble, Pepsi, HP, Johnson & Jonhnson, and Aviva. We have presence across the world and in the recent past we have intensified our presence in Asia.

LBR: Are you seeing that there are large firms which are channeling funds into emerging markets to grow their business in those countries?

A: When you look at growth rates in terms of business, the growth rates in Asia and Pacific are greater and higher than in Europe and the US. Large markets like India and China with large populations have now opened up and have shown double digit growth. Many brands and clients are looking at these countries to invest and become part of the growth story. There is definitely a move but primarily due to the fact that emerging economies which are now being globalised and opened up to the world economy, so to that extent are very tempting for large multinationals and large clients.

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