Race to the net: Advertising agencies scramble to offer digital media services

Market dominated by niche players, causing some of the bigger players to partner with them.

KARACHI:

With their clients increasingly demanding digital media as part of their marketing strategy, advertising agencies are scrambling to include digital advertising as part of their portfolio of services, according to sources in the advertising business.

The Pakistani internet population has grown less than 10,000 in 1996 to well over 20 million in 2011, according to statistics compiled by the Pakistan Telecommunications Authority. Companies that advertise to consumers are becoming increasingly keen on utilising the amount of time Pakistanis spend online to advertise to them, especially since it appears to cost a lot less to advertise on the internet than it does on any other media.

Some of the leading names in digital advertising in Pakistan are specialist players, who often focus on internet and text message advertising, such as Converge, which focuses on helping companies reach customers through social media platforms, as well as mass text messaging. The company was founded only five years ago and already has several big name clients like Unilever, Pakistan Telecommunications Company, Mobilink, Hewlitt-Packard, Bank Alfalah, Nokia and Pakistan State Oil.

One of the oldest specialist digital media players is Symmetry Digital, which started in 2003 and claims to be the largest online advertising agency in the country. Its client roster is certainly large and impressive, including some of the best known brands in Pakistan. Another of its competitors is The Next Big Thing, which goes by its acronym, TNBT, a relatively newer firm that has an incredibly young team but an equally impressive array of clients.

The advent of these firms has forced the older firms to either build up their own digital media capabilities or partner with these niche players. Some of the larger firms – despite their global presence – have seen the advantage of partnering with the smaller players who have specialised knowledge and capabilities about the local market. For instance, in March of this year, the Pakistani subsidiary of J Walter Thompson – one of the largest advertising agencies in the world – acquired a minority stake in Converge.

“This partnership will put both Converge and JWT Pakistan in a position to leverage each other’s strengths and scale up our integrated offering for our clients,” said Mansoor Karim Shaikh, CEO of JWT Pakistan, in a statement released on the company’s website at the time.

On the other hand, Lowe & Rauf, easily one of the oldest advertising agencies in the country, has decided to build up its digital media capabilities from scratch. Lowe & Rauf is the agency behind some of Pakistan’s best-known television advertising campaigns, such as Lipton Tea’s “chai chahiye” campaign. For even such a well-established agency to be looking to digital media suggests that the Pakistani advertising business has come full circle: no agency can expect to be in business without having a strong digital capability in its portfolio.

According to research conducted by B Solutions, a Lahore-based digital media agency, about 60% of Pakistani consumers engage with brands online. No Pakistani brand manager, or advertising agency, can afford to ignore this market anymore.

Published in The Express Tribune, September 24^th, 2012.