IT'S the biggest news to hit the Indian ad industry in the Nineties. Coca-Cola, the world's most known brand, has shifted its Rs 50-crore Coke account for India--earlier with McCann-Erickson which has long handled the account in most parts of the world--to Chaitra Leo Burnett.
The agency also recently picked up the accounts of sports giant Reebok from HTA and Pennzoil, America's largest lubricant, from Ammirati Puris Lintas. Coca-Cola, according to highly-placed industry sources, had called for a review of its ad strategy, and McCann-Erickson and Chaitra Leo Burnett made their first presentations in Mumbai this March. The second pitch was made in Sydney, headquarters of Coca-Cola's South Asia operations.
The Chaitra Leo Burnett team was headed by CEO Arvind Sharma and executive creative director K.S. Chakravarthy. McCann, on its part, had flown in creative heads from abroad, besides pooling in local resources. Chaitra presented 35 television commercial ideas, and seven to 10 were selected, the sources said. The new campaign will be aired in May. "We are over the moon. We are extremely privileged and honoured to have been awarded this account," said Rajiv Sharma, head of Chaitra, Delhi. The only time other agencies had pitched for the Coke account was in 1992 when the US soft drinks giant had returned to India. "Even then it was a foregone conclusion that Tara Sinha McCann-Erickson (TSME) would handle it because of Tara Sinha's McCann connection and her experience with Coca-Cola," says an industry observer. After she left Clarion Advertising in the early '70s, Sinha had handled the corporate communications wing of CocaCola in India.
When the soft drink major left India after the Janata government came to power, she went to Atlanta to work for Coca Cola International. This helped her form a partnership with McCann-Erickson. But finally, Ammirati Puris Lintas, which handled the Diet Coke account worldwide, became Coke's agency of record in India with. TSME in charge of creative. "Later, a number of other agencies started getting involved with us and Leo Burnett was one of them," said a source in Coca-Cola. Leo Burnett has Coke accounts in many parts of Asia.
The Coca-Cola decision is all the more surprising because the trend among TNCS has been to use a single ad agency across the world for a particular brand to maintain consistent brand imagery. Unilever India reassigned its ad accounts a couple of years ago to make sure that a Unilever brand handled by a particular agency in the West was handled here by its Indian subsidiary. And in 1995, Philips brought TNC agency Euro RSCG into India.
Besides Coke, the only significant instance of a marketer shifting its Indian account from the subsidiary of its global ad agency has been Ray-Ban maker Bausch & Lomb leaving Rediffusion DY&R (in which Bausch & Lomb's global agency Young & Rubicam holds an equity stake) for HTA. One exception is Coke's arch-rival Pepsi. Worldwide, Pepsi's account is handled by BBDO, but in India, HTA does the advertising, not R.K. Swamy/BBDO. "I am simply astonished...on the flip side of it, I also feel happy. The shifting of the account means that Pepsi has given Coke a real run for its money. It looks like Coke is trying to make a major comeback to the market through some new campaigns," says Sunil Gupta, vice-president and senior general manager, HTA.
Coca-Cola, meanwhile, is maintaining silence. "Coca-Cola India has assigned the development of advertising for brand Coca-Cola to Chaitra Leo Burnett. The assignment is designed to spearhead an accelerated growth for the brand by strengthening brand preference and improving brand imagery," said a terse note from the TNC. No more. No less. What's clear is that the take-no-prisoners Coke-Pepsi war for a larger share of Indian thirst has just claimed its biggest victim: McCann-Erickson India. Heads are likely to roll at McCann. Coca-Cola was its largest client, and accounted for a significant part of McCann's India billings.
Its loss will have far-reaching effects on McCann India, which is headed by the high-profile Sohrab Mistry. INDUSTRY sources say the decision to shift the account to Chaitra Leo Burnett was mainly because Chaitra was already handling brands like Thums Up and Limca which Coca-Cola now owns and the company felt the agency had a better understanding of the brands' positioning in the subcontinent. Secondly, Coca-Cola was not satisfied with McCann's performance vis-a-vis Pepsi's ad campaigns.
"The campaign with teenagers entering a home with huge bottles of Coke didn't get the soft drink major the desired results. So also the animated cricket series fashioned by McCann's creative team from abroad. And the campaign which had the background tune of Nusrat Fateh Ali Khan's Dum Mast Mast paled in the face of Pepsi's 'Nothing Official About It' series that had international cricket stars and worked extremely well during the World Cup...and then the delay in delivering the Bollywood to Hollywood series. Coke was getting desperate for results," the source said.
But the ad industry remains dazed by the Coca-Cola decision. Says Rahul Kansal, chief operating officer, Mudra: "I am truly amazed. After all, Coca-Cola brands have always been synonymous with McCann, not just in India but in most of the world. Agrees Ajay Gupta, regional director, Sistas Saatchi and Saatchi: "it's surprising because McCann has always been careful in handling its prized possession."
But, according to Sandeep Goyal of Rediffusion DY&R, more such decisions will rattle the Indian ad industry in years to come. "TNC business can no longer be taken for granted. This move may make other TNCS rethink their strategy of global alignment with one agency and increasingly rely on local capabilities."
