Is the Chennai ad world ailing?

The city has lost many key accounts in the recent past. afaqs! explores the facts, the reasons and the consequences of this exodus.

The coffee versus toffee debate was born in Chennai. This famous ad film for Parry's Coffee Bite isn't the only campaign that the Chennai ad fraternity can boast of. In the last many years, the city's ad fraternity has churned out some very memorable campaigns for clients such as Ford, CavinKare, Citibank, and Saint Gobain.

However, the Chennai ad world is currently going through a lean phase. The city has lost many of its high profile clients in the last few years.

Elango M, general manager, Interface Communications, Chennai agrees, "Several big brands have moved out of the city over the years for whatever reasons there may be." In the recent past, brands such as Citibank, CavinKare, Ford, and Parryware Roca have moved out of the city. And, we are still counting.

What's surprising is that the city is not just losing its clients to Bengaluru - which has recently turned into the hub of the ad world in the South - instead, clients are moving from Chennai to Mumbai and Delhi, and many times within the same agency.

Francis Xavier, head of Francis Kanoi Marketing and Planning Services, says, "One of the reasons for businesses moving out of Chennai is the consolidation of the business in one spot. This was the case with Pond's, years back. The business was consolidated in Mumbai after it was taken over by Hindustan Unilever (HUL)."

A recent instance of the same would be the media duties of ColorPlus that moved from Starcom MediaVest Chennai, to R K Swamy Media Group Mumbai, owing to the consolidation of its media planning/buying duties on the part of mother-brand Raymond, three months back.

However, there seems to be more to the exodus than mere grouping and growth plans.

While some accounts moved out of the city because the brand got bought over by a company headquartered in Mumbai or Delhi, a common reason for the exit of many brands was the lack of advertising talent in Chennai.

Richa Arora, brand consultant of the Bengaluru-based Five by Six Consulting, says, "It's an interlinked phenomenon. When the total quantum of business in a city falls below a certain threshold level, agencies would naturally move out their best people resources to other cities for better resource utilisation. When this reaches a point where the quality of resources available in a city falls below the acceptable threshold level, businesses would have no option, but to relocate to move closer to these quality resources."

It is also true that it is difficult to retain talent in Chennai. While the creative, as well as business heads of Southern operations in many agencies have now shifted base to Bengaluru, the best talents prefer moving to Mumbai or Delhi - the Mecca of Indian advertising. Talents see these places as opportunities for growth.

The client fraternity, as well, though based in Chennai, believes in parking their best advertising brains in Mumbai and Chennai, while the manufacturing units could well be in Chennai. The Hyundai plant, for instance, is in Chennai, while its sales and marketing is handled out of Delhi.

"In terms of both, brand management as well as creative talent, availability seems to be more in places like Mumbai and Delhi, rather than in Chennai. And, companies want to set up their teams in cities where critical mass, in terms of talent and business, is most available," says S Visvanathan, general manager, marketing services, CavinKare. In fact, for CavinKare, its skin care team has already moved to Mumbai, while the hair care team will follow suit within the next couple of weeks.

Brands too have their own compulsion to move out of Chennai. Subhash Franklin, strategic planning director, OMD, Bengaluru, tells afaqs!, "After establishing themselves in the Southern market, brands tend to reach a plateau and momentum slows down. In an effort to avoid getting labelled as 'South brands' or 'regional brands' they move out to explore northern and western markets."

According to Franklin, this is almost like the next step in the brands' growth chart, thus making moving out of the Chennai market a natural progression." In such situations, marketers often wish to give a fresh perspective to the brand and this is when the Mumbai or Delhi-based agencies are hired based on the belief that the strategy will provide a national perspective to the brand.

But, why is Mumbai the advertising hub for talent and clients? Manish Bhatt, founder-director, Scarecrow Communications -- the agency that recently won the creative mandate for Henkel's soap brand, Margo - says, "This may be due to the presence of a lot of peripheral talent in Mumbai, that may be absent in Chennai, such as recording equipment, electronic media, filming, infrastructure, or merely a sense of '24-hour professionalism.'

However, with a full-fledged film industry in Tollywood, which gives even Bollywood a run for its money, production facilities would be well-equipped in Chennai, as well. But, obviously this factor is not helping matters much.

The effect of this downslide has been very discouraging. While large agencies are downsizing, many small agencies or creative boutiques have mushroomed to service the retail clients, which contribute to a majority portion of the city's advertising business.

Is it another Kolkata in the making?