Nepali Times
Strictly Business
The long tail


Early this month, officials at state-run Gorkhapatra daily got into a public fistfight with the head of an advertising agency. The row was reportedly over the agency not paying what it owed to the newspaper despite repeated requests.

At the police station, where the agency head had been hauled up, both sides exchanged fisticuffs before they were forcibly pulled apart. Supporting the agency head were members of the Advertising Association of Nepal (AAN), who issued a statement, expressing regret that such an incident had even come to pass. Other media outlets reported the spectacle with nary a commentary.

Inexcusable though Gorkhapatra officials' physical assault on an advertising professional was, it nonetheless did raise this question. Just what is the nature of the relationship between ad agencies and media houses in Nepal? The answer depends on who you're talking about.

First, let's talk about the media houses. Behind all the heart-warming self-references about being members of the fourth estate, media houses are private companies that have to make money to stay in business. But the challenges they face are many. In the last one year alone, the cost of printing paper in the international market has risen by 50 per cent, if not more. When these companies plan to launch new media products or tweak the existing ones, they face a severe shortage of qualified staff-creative professionals who can think, write, edit, design, publish, sell and distribute with little supervision.

Meantime, the manpower they have is getting costlier to hold on to as the costs of everything else continue to go up. The longer they wait to address staff's legitimate and, in some cases, exaggerated grievances, it is likely that they'll end up spending time dealing with trade unions, some of which have overt party-political agenda, which includes even shutting down the business. Given Nepal's vibrant media market, the competition to attract readers' and advertisers' attention has never been fiercer. And this doesn't include how free distribution of content on the Internet has shrunk media's traditional money-recovering model.

With their backs against the wall, media houses are slowly, if reluctantly, recasting themselves as being, first and foremost, in the advertising business. And that's where ad agencies play an important dual role. To advertisers, who are the agencies' clients, they offer expertise on ad placements, designs and outreach work.

With media houses, they negotiate clients' ads for placement. For this intermediary role, they collect fees from clients, slice off their share, and pass the rest on to the media houses. This flow of task has worked well with a handful of Nepali ad agencies that are professionally managed and exhibit a globally-savvy outlook. Careful about their reputation, they clear up their financial obligations promptly.

But there's a long tail of smaller ad agencies that continue to hurt the credibility of advertising professionals in Nepal. Often run by characters who seem to have been lifted straight out of the movie Get Shorty, these agencies offer shoddy services to clients. And by not paying the media houses for months and years on end, they take advantage of the fact that there is no small-claims court, and that a lawsuit can drag on for years. Unable to offer convincing answers to auditors and promoters about a long list of non-paying agencies, most media executives seethe privately. But some, like those at Gorkhapatra, take matters into their own hands.

The Gorkhapatra incident has encouraged the AAN executives to offer help to mediate between media houses and ad agencies in the future. Though that's a step in the right direction, they must remain vigilant that the reputation of their industry is not held hostage to the bad-faith actions of the long tail of non-paying agencies.

(11 JAN 2013 - 17 JAN 2013)