RK Swamy and BBDO part ways. Here's why

RK Swamy BBDO are splitting and going their separate ways after first striking a partnership over 37 years ago. RK Swamy is one of the early homegrown agencies and a pioneer in Indian advertising, while BBDO is a leading network on the global Omnicom Group. Under a new agreement, the former will buy out BBDO’s stake in the joint entity and BBDO will buy out R K Swamy’ stake in BBDO India.

RK Swamy Advertising Associates was started by R.K. Swamy in 1973. In 1985, the global agency network BBDO came on board as a non-equity partner in RK Swamy Advertising Associates. By 1990, BBDO had turned an equity partner in the agency after it was sold a small stake in the company. BBDO invested in the Indian ad company up to a majority, which RK Swamy bought back in 2009. Since then, BBDO has held a significant minority stake in the company.

“Today, when we look back, there is no regret for we maintained a great relationship,” Srinivasan Swamy, chairman and managing director of RK Swamy Hansa Group, tells Storyboard18.

As we got into a conversation with Swamy, he spoke about the amicable end to their partnership, the changes he witnessed in the advertising industry, the big disruption he sees coming, and how talent still continues to be the biggest challenge for agencies.

RK Swamy and BBDO are going their separate ways after a 37-year-old partnership. Could you highlight the reason why this decision was taken now?

A partnership is defined by two equal partners. We always believed that we need to be a partner and not be subservient to anybody. Normally, when a partnership ends, there could be possibilities of acrimony.

The reason why we decided to go our separate ways was to integrate our offerings (RK Swamy Hansa Group) as one. BBDO was only in the advertising business and offered services like media and creative. And, we were serving the same ecosystem of marketers with services like marketing analytics, media research, events, health care communication, public relations, outdoor, AdTech, MarTech, etc.

So, the multiple clients we have can also be served across systems in a unified structure to help us deliver better than a structure where BBDO’s interest would be in one small segment. And, both the partners agreed that we function separately in an amicable manner.

Who were the key clients of RK Swamy BBDO?

We worked for the government of India. We worked for financial services and for institutions like the LIC, RBI, SBI, etc. We also worked with private sector clients. The oldest client we have had since 1985 is Hawkins. We worked for Havells, Lloyd, TAFE, IndusInd bank, Shriram Group, Himalayas, MagicBricks, ONGC, Tata Steel, Mahindra & Mahindra etc. Also, dairy products, Gemini oil are a part of the list. We worked for over 200 large clients in India.

What's the current size of the company and which are the recent account wins for RK Swamy BBDO?

There are a few companies we have signed up with but we are not supposed to disclose them as of now. The consolidated turnover of RK Swamy Hansa Group is $100 million. We have close to 1,000 people working for us full-time. We have multiple call centres—ingoing and outgoing calls with consumers for ratings—where the number of people working for us is another 1,000. And, there are field operations with another 500 people working for us. As a group, we may have 2,500 people working for us.

Looking back, when RK Swamy and BBDO started off together, how was the advertising industry changing back then and over the years?

In 1985, life was very simple then. We had only one television station which was Doordarshan. Print was small and we did not have the digital medium then. The setup of the independent media had not happened in a full proof manner. Hence, full service agencies did not feel threatened. Then life became more complex as more and more channels began to emerge. Media broke away from mainstream advertising. The commission structures began to get challenged. As things moved forward, the industry had to be reconfigured.

What do you make of the changes in the advertising landscape today?

The fundamentals of advertising even today have not changed. We are always looking to connect with the consumers. The medium may change, the messaging may change, but the reason to communicate with the audience will never change. People get confused with the way they have to communicate rather than what needs to be communicated.

Digital is all prevalent. Short form videos too are relevant today. There was a time when people felt that it would be difficult for them to adjust with short form videos. Today, videos are very much consumed for longer durations.

What are the key challenges facing the industry in the present?

One main challenge is attrition. Another challenge, which is not just in India but is happening around the world is people or talent, who have worked with larger agencies are moving out and starting their own. They are able to provide personalized services—because it is their own business—and there is a cost advantage factor where they don’t carry the tag of a large entity. They can provide the clients good quality service at a comfortable price. But, this does not work for everyone. This is because most of these small agencies are not adequately staffed.

What's the next big disruption you see coming?

There is so much talk happening about artificial intelligence (AI), machine learning (ML), virtual reality (VR), augmented reality (AR) that it would take over and even talks about programmatic buying and merged reality.

But, what could create havoc is the loss of privacy which will make blockchain technology very important. I think technology has to reach a stage of being able to ensure privacy.

Blockchain technology or any other tool which can ensure the privacy of people can be seen as the next big disruption.

What are the mistakes brand marketers made then and now?

Today, communicators are so super creative that I find it difficult to comprehend what they are trying to say. A good amount of money is spent behind communication where nothing specific is being communicated. Is it my inability or lack of being unable to understand their communication? I am not sure.

When I look at IPL, sometimes I feel their communication just leaves you cold. Since crores of money are spent behind communication, when one is unable to comprehend, it doesn’t leave them any wiser. I hope, people who create such advertisements or buy into them, realise the folly that they are committing.