I recently asked a group of business-savvy friends to name a few Nepali ad agencies. To my surprise, they could name no more than three agencies out of the many operating in Kathmandu. I then asked whether they remembered seeing ads of those agencies anywhere. They said that they did not, and that they knew of the agencies through professional contacts.
I repeated the experiment with American and Bangladeshi friends. They too could not name more than two ad agencies in their respective countries. Moreover, they recalled no instances where those ad companies had placed ads about themselves in mainstream media. In all cases, I concluded: If ad agencies themselves don't appear to use ads to advertise their own services to build up their brand, why should you believe them when they say that you have to spend a small fortune on ads to build up your brand in the marketplace?
Truth be told, my little experiment was inspired after reading an online article ('Advertising Execs are Hypocrites', 17 April 2006, BrandWeek) by Simon Sinek. Talking about the American experience, Sinek charges that 'modern ad agencies work hard to reinforce the value of their product with their clients.studies are whipped up to prove the effectiveness of (ads) . when clients' budgets are tight, agencies will provide data to show the importance of advertising in a down market."
He asks, "If advertising is so effective, why don't ad agencies advertise?" Sinek answers by arguing that "more than advertising, agencies rely heavily on public relations", implying that clients would do well if they also relied more on public relations and less on advertisements to build up their brands.
That implication strongly resonates with what I have observed about successful brands in the Nepali marketplace. Even in this age of supermarket saturation in Kathmandu, for instance, you never see ads anywhere that say, 'Shop at Bhatbhateni: Low prices everyday'. Yet the absence of such ads has not stopped thousands of shoppers from going to Bhatbhateni every day to buy just about everything from vegetables to lawn mowers. Two years ago, I asked Min Bdr Gurung, the self-effacing proprietor who started out as a small entrepreneur running a cold storage, why he placed no ads touting the offerings at his ever-expanding supermarket. He said he was more interested in attracting repeat customers by bargaining hard with suppliers for low prices than in throwing away good money to listen to PowerPoint presentations made by ad agency executives.
Similarly, I have never seen Thamel's Himalayan Java put out ads that say, 'Come taste the coffee, the beans are from Gulmi.' Java's success can be credited to the PR prowess of its owner (along with its location and the frequently changing couch-and-sofa decors that make you feel as though you were stepping into the studio of the American sitcom Friends). Indeed, Gagan Pradhan seems to know just about anybody and everybody in town-the kind of customers who would recommend his restaurant to others for "coffee, community and conversation".
Of course, it doesn't hurt that the coffee, however overpriced, is good too.
When Sinek points out that "advertising has been commoditised", and that "agencies struggle to justify their own value in a sea of sameness", he could have been talking about the Nepali ad industry. That is why the message that every thinking CEO should adapt to is this: When building a brand, unless you see clear benefits from advertising, put greater resources into PR. And in case of doubt, remember that successful Nepali businesses seem to build their brands through PR and not by advertising their product lines.