Ad firm eyes non-fee based income
Play
DUE to the fierce price war in |the advertising industry, IPG Mediabrands Thailand is diversifying into non- fee-based businesses.
“We hope to see 50:50 in fee-based and non-fee-based revenue in five years, if possible,” chairman Wannee Ruttanaphon said last week.
The leading advertising and media planning agency’s fee-based services now account for more than 80 per cent of total revenue.
“It would not be healthy for our long-term business if we relied on one big source of revenue, particularly amid the fierce competition among media agencies,” she said.
In each new round of pitching, a client looks for the best value in media service fees offered by an agency. To clinch a contract, sometimes agencies might adopt a pricing strategy.
The client will be happy with such a result. But the agency would not feel the same, as its commission does not meet expectations.
To survive in such a tough situation, which is often seen here, the company would underline business related to brand activations, branded contents and innovation.
The company has a branded content arm called “Ensemble”, which has a team with a diverse set of skills and experience to create brand awareness through entertainment programmes via highly effective media. Branded content TV programmes would also create opportunities for engagement with customers.
Though TV remains the key channel to communicate with the mass audience, marketers and brand owners seemed to have learned that media fragmentation makes the effectiveness of advertising via TV low.
Many advertisers opt to use more effective channels such as online search engines, community websites, blogs and social networks like Facebook, Instagram, Twitter and Line.
The new platforms with high potential are mobile applications, social media, radio, cable and satellite TV or even the upcoming digital terrestrial TV.
To cash in on this trend, the agency will offer an integrated communications service via mixed media.
Innovation communication is also another area that the agency puts at the centre of its focus.
Wannee, who was recently named as the Agency Innovator of 2013 by the UK-based Internationalist publication, believes that innovation come from break-through thinking and creative ideas and also comes from taking risks and challenges head on and never stopping to do your best, never giving up.
