Advertisers woke up and took attention as social media and digital marketing became business strategies.

In the advertising industry, client disputes are considered to be a significant issue. When an advertising agency works for a company, it learns confidential information that it may utilise strategically, ie, share with its competitors. Knowing more about the competition may not always be helpful in oligopolistic conditions.

“Some advertisers are particular about category exclusivity, and some are happy to let it slide,” said Imran Irshad, the CEO of M&C Saatchi. “Developing a competitive advantage in a category and then getting multiple advertisers on-board is a lucrative proposition for agencies. Some agencies — not us — come up with smart strategies, such as the creation of sister brand agencies that sit in the same premises, or on-boarding separate teams within the same agency to handle multiple brands.”

Coke has Coke Studio and Pepsi has Battle of the Bands as music platforms — the issue arises when both advertisers want a specific time slot on a particular day for a specific channel

PepsiCo and The Coca-Cola Company, the market leaders in the carbonated soft drinks (CSD) category in Pakistan, are respectively served by Mindshare and Mediacom under GroupM Pakistan, headquartered in the Ocean Tower in Karachi. The teams for Mindshare and Mediacom are in the same building and are separated by floors and in some cases by cities since PepsiCo and The Coca-Cola Company are based in Lahore.

“The clients need to understand that there are endless possibilities to make a relationship transparent,” said Rizwan Merchant, the founder & CEO of M2 Pakistan. “Client needs to know what they require from the agency and get it audited through specialised media auditor firms.”

When serving advertisers in the same category, naturally, a media agency must decide which client to favour. The most natural variable to measure is which client represents the most significant chunk of the media group’s business. In the case of Pepsi vs Coke, sources shared that Pepsi has a media budget that is nearly Rs2.5 billion while Coca-Cola spends under Rs1bn on its advertising expenditure (AdEx).

According to the Pakistan Media Outlook 2021 report from Brainchild Communications Pakistan, the print AdEx by companies in the beverages category constituted just 2 per cent of the overall print AdEx of 2020.

But things are more complex: Pepsi sponsors cricket locally, Coke does so internationally. Both have music platforms, namely Coke Studio and Battle of the Bands. And they will have to find their way amid a plethora of advertiser specific operating principles. These include rates, music platforms, sports sponsorships and exclusivity.

Coke has Coke Studio, and Pepsi has Battle of the Bands as music platforms. Here arises an issue when both firms want a specific time slot on a particular day for a specific channel.

“The brand essence, positioning and future growth plans drive the platform and strategy selection,” said Mr Asgher. “It is a co-created process between the advertiser and their media partners.”

Sports Sponsorships: Coke is an international sponsor of cricketing events, while Pepsi is often a principal local sponsor. If both want the first 10 seconds of the first ad break, that can create a deadlock, and if Pepsi being the main sponsor of a tournament, gets 60pc of airtime, and Coke wants the 1st spot of every break. It will further complicate the situation.

Exclusivity: In general, certain exclusive events require category exclusivity. An example of these events is Ramadan, Eid, August 14th, etc. For these events, it’s always offered to one category leader and the first right of refusal.

“We have our own air-tight protocol,” said a GroupM Pakistan representative.

When advertisers choose to adopt a periodical media audit through firms that have insights into agency operations and understand the client-agency relationship’s intricacies, relationships between competing categories can become transparent. Till then, advertisers will continue to choose to jump the gun and complain after the fact.

Published in Dawn, The Business and Finance Weekly, December 6th, 2021


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