Nazim Farhan Choudhury, Managing Director of Adcomm Limited, runs one of the oldest and largest full-service advertising agencies in Bangladesh. Started his career in advertising in 1994, Mr. Farhan is considered as one of the most influential admen and entrepreneurs in the country. As the world of agency business experience a rapid change, he has doubled down on transforming Adcomm to meet the challenges of the new digital age, reshaping its positioning in the market, attracting fresh talents, and digital while also pushing Adcomm to become more customer-focused, innovative, and collaborative.
In this episode of Face to Face interview, Mr. Farhan speaks to Future Startup’s Ruhul Kader about his priorities going forward as the Managing Director of one of largest ad agencies in the country, organizational changes at Adcomm, the future of communication business and Adcomm’s strategy going forward, Bager Bachcha Digital and Adcomm’s digital strategy, a new model for communication business, and how advertising agencies can brave digital disruption by reframing the business they are in.
Future Startup
Thank you for agreeing to do this interview. What is one big theme that you are paying a lot of attention to these days at Adcomm as part of your work?
Nazim Farhan Choudhury
Adcomm as one of the leading advertising communications companies in Bangladesh is at a very interesting crossroads like rest of the industry. Communication as an industry, we are seeing this transition from old media to new media. This change, however, is not as straightforward as it might seem from the outside. It is complex. There are many layers to it.
Contrary to popular conception, digital doesn't only mean social networks. It's much more. If you are only looking at Facebook or Google or any other similar platforms for that matter, these are channels like TV or newspaper. The more profound changes have happened in our lifestyle and in how we communicate.
Digital technology has transformed the way we advertise. We have moved from a one-way communication to a two-way communication to a multi-way communication. Control has ceased.
TV is a one-way medium. As an advertiser, I tell you whatever I want to tell. Then came two-way communication where users could also talk back such as call center, complaint box, SMS and then social media. Now it is multi-way communication.
As a brand when I run a communication, anyone from anywhere can reply to it. Discuss it. Critique or praise it. In many instances, this happens outside of the involvement of that very advertiser or product or the company. This is a very different phenomenon.
The basic premise of thinking - how advertising works - has changed. Therefore advertising people, the people who are in this trade of communication, we have to think differently. There is a huge mind-shift. Unfortunately, I don’t think anybody has figured it out yet.
This is not a Bangladeshi phenomenon. To be honest I don't think any company in the world has yet figured out the best way to deal with this transformation. I think that’s a challenge we have here in AdComm as well, is how do we transition from this old model of communication to this new world. How do we help our partners in a world where you don’t have control on the communication or the discussion you want to start.
This has been one of my priorities in the recent time. Figuring out our strategy going forward.
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Adcomm as one of the leading advertising communications companies in Bangladesh is at a very interesting crossroads like rest of the industry. Communication as an industry, we are seeing this transition from old media to new media. This change, however, is not as straightforward as it might seem from the outside. It is complex. There are many layers to it.
Future Startup
That’s a very profound way of looking at it. I have a few more questions related to this shift in communication. Before that, can you give us an overview of Adcomm now?
Nazim Farhan Choudhury
Adcomm Limited, which is our advertising agency, has about 100 people. We are a full-service advertising agency offering all advertising and communication and promotional services for both digital and conventional media.
As you know, we have several other concerns concentrated on different areas related to communication.
One called AktiVision which focuses on rural marketing and direct consumer interaction and ground level activation program. Then we have Bagher Bachcha Digital which is our offering in the digital advertising space. While AdComm takes a 360-degree view of the communication, Bagher Bachcha is very focused and only deals with digital communication.
Then we have Colors FM, our FM radio channel, where I spend a lot of time. Although it is not exactly an advertising related business, it is something we are passionate about where we cater to the female populace with a view to further the idea of gender equality. Then we have Graphic People and Software People - these are the two IT outsourcing companies which are doing extremely well.
Ad agencies, in effect, use what I call a communication-as-a-service model. This has been there for many years. They are the custodians of brands. They thrive on long-term engagements with clients. It helps us as an agency to better understand the brand’s needs and at the same time, it helps brands to get a better result. This has been the way not only in Bangladesh but also globally. Because brands need consistency and it comes from a long-term engagement.
Future Startup
We last spoke in 2014, how much has ADcomm evolved over the past almost 4 years?
Nazim Farhan
I think Adcomm has evolved quite significantly. Even though on the outside one does not get to see it, a lot of profound changes have taken place. We have restructured our agency. Streamlined our operation. Most importantly, we are much more client-focused now. This does not mean that we were not client focused in the past but that we have made changes that allow us now to better serve our clients.
We have added new talents to the team. At one point in time, AdComm became a very aged company in terms of the average age of our team. It has gone down significantly last few years with the younger team members joining us. At the same time, the number of new people joining the agency has gone up. We have been lucky to be able to attract a lot of great talents in the market.
I’m hopeful about this new team as we are talking about this transition to digital and this young team is much more accustomed to these new technologies.
Attracting talents has been a priority for us for a while now. We have been arranging outreach programs for some time now to attract new faces because we deem it necessary to have young people in the organization who can tune in to digital advertising.
At the same time, we are also aware of the fact that there might be a perception in the market that AdComm is a boring old advertising agency, hence young people might not feel that attracted to join us.
Through these outreach programs, we can contribute to changing that perception. This also allows us to tell our story that we are doing a lot of new things. We are exploring new territories. And most importantly, we have resources and clients that we can offer more opportunities to experiment and explore. If you want to do fantastic work, you can do it at an agency like AdComm.
Competition for talent has intensified over the last few years. We are now not only competing with old agencies, we are also competing with these new digital-only agencies and other technology companies such as ecommerce companies.
If you look at our track record of creative execution over the last couple of years, we have been doing extremely well. There is a communication award by Bangladesh Brand Forum, we have been doing exceedingly well in that over the last couple of years. Not just for one category or one client, our wins are over multiple clients, over multiple categories, and over multiple things. Our wins are very distributed which shows our strength of talents.
Future Startup
If we look at the business model of ad agencies, first you get a client who briefs you about the job. Next, you design the communicational/promotional content, give it to the client and the process repeats with another client. Over the years, with new technologies, the business model has evolved. We have now models like subscription, or SaaS, Software-as-a-Service (SaaS) and so on. Do you anticipate any change in your model in the coming days?
Nazim Farhan
Ad agencies, in effect, use what I call a communication-as-a-service model. This has been there for many years. They are the custodians of brands. They thrive on long-term engagements with clients. It helps us as an agency to better understand the brand’s needs and at the same time, it helps brands to get a better result.
This has been the way not only in Bangladesh but also globally. Because brands need consistency and it comes from a long-term engagement.
But client engagement duration has gone down over the past couple of years. The nature of the engagement has become more transaction-specific in nature. I have a product or a campaign or a TVC or something to launch, can you give me a launch plan. Agencies now get one or two assignments from a client and their collaboration ends there.
Fortunately, we have been able to maintain our collaboration with large multinational and local brands like Unilever, Akij Group of Industries for the last decade or so. If you look at our portfolio, we have been working with many of partners since 90s and it continues. Our engagement with our partners is long-term in nature. We have not had this transactional thing as much as a lot of others.
The trouble with short-term and transactional engagement is that it doesn't provide you with a deeper understanding of the client's advertising needs. A transaction-specific approach, as a result, will not cut it.
In fact, I've been observing a change recently to return to long-term approaches. The model is now flipping back to the old approach of doing things.
Future Startup
You've in the ad business for over 24 years now, a lot of changes have happened in the industry. Can you shed some light on the evolution?
Nazim Farhan
Well, there have been drastic changes since I came into this industry. Take, for instance, when I joined AdComm in 1994, TV commercials were still pictures based along with voice-overs in the background. Not even moving pictures. It was the conventional way to make TVCs.
Brands used to commission ads just once or twice a year and run it for the next few years once they were prepared. If a brand making one or two ads, it was like they were making so many ads.
It's completely a different scene now. We now shoot commercials with millions of taka which are aired for four days or a month to the max. The whole dynamic has changed. The volume has changed. And the medium has changed. Like I was saying that in 1994 there was something called ‘just before Bangla news’. BTV had a Bangla News at 9:00 pm. If you could get it you could run an ad at 8:59 for 30 seconds. If you ran the ad in that slot, it was guaranteed that most of the country had seen it. It was crazy how badly people wanted to get that slot ‘just before Bangla News’.
Now we live in a very different world and your ad could be anywhere. It has become very difficult to get the attention of your target audience The number of mediums and channels have gone up making it doubly difficult to effectively reach out to your target audience.
The whole dynamics of communication has changed - from ‘just before Bangla news’ reality to how can we get into the conversation. I think in the next five years, the communication industry is going to be entirely different.
The failure of the big firms, in my opinion, is in that they fell behind in adopting the new wave of advertising technology. They have been late to attract people who understand the changing landscape or when they get talents with skills in these technologies they did not know what to do with that. And they could not provide them enough space and opportunities to explore.
Future Startup
Over the past couple of years, starting a company has become a lot cheaper than anytime before - thanks to technologies like AWS, social media and others. Anyone can go and open a Facebook page and start a digital media agency if they have the expertise. This was not the case 5-6 years ago. You had to have some sort of investment to start a company. It has changed the dynamics of the market as well as the competition. How do you see this development?
Nazim Farhan
I don’t think I completely agree. It was never too tough a job to start an ad agency. The important thing is that whether you have the right mind and the required set of skills to do so. Advertising has always been a talent-focused business.
Take, for instance, our Founder, Geeteara Safiya Choudhury. In 1974, she left a leading ad agency of that time to build a company of her own. A small office with no more than six people - that's what Adcomm Ltd. was at its inception. But look at how it has grown. She got some early clients who believed in her and she started. Since then we have come a long way.
Throughout my career, I have seen many people starting agencies. Starting an agency is not that big a deal. In fact, you can build a business in the short-term. The challenge is finding and retaining talent for a long period of time. Do you have resources, expertise and all that?
This is a tough trade. It seems like an easy business from the outside. But it is not. If you pay attention to the market, you would see advertising agencies come and go. This applies to other businesses too but for agencies, it is more so. If you look at the market you would see that mostly old agencies are doing the business. There are new ones but the number is relatively slim.
The industry has grown. The number has gone up. But seldom big agencies disappear. This is a global scenario. There are of course new companies doing extremely well. But that does not mean that they are eating into old ones' business.
Future Startup
Networking is one of the most important components in building a business. A difficult thing to have in the past, exposure to influential peers in the business arena has become easier due to the advent of online communication. Platforms like Linkedin and others have made it easier to reach out to potential clients and so on which was not the case a few years ago. The Internet has democratized the process and, in turn, made it easy for new companies to compete and intensified the competition. At the same time, discovery has become easier. Clients as well can find our agencies who are doing good work. For instance, Youtube has helped make many new musicians and actors and so on. Don’t you think this has happened and competition has intensified?
Nazim Farhan
Yes, of course. I don’t want to sound pompous by saying something that only the large agencies have the talents. And there are no talents other than big agencies. Of course, there are. There are some great creative shops. What I’m trying to say that that has always been the case. Our ads are our calling card. Somebody see one of our works and then ask who did it and come to us. This has always been the case.
What happened over the years is that due to the exposure provided by the internet, many people have got the opportunity to come to the forefront - people who otherwise wouldn't have had such opportunities.
Small companies are now getting more attention than in the past. If someone does good work, commendable work, they are receiving the necessary appreciation; and, the big fishes no longer just devour the little ones.
The failure of the big firms, in my opinion, is in that they fell behind in adopting the new wave of advertising technology. They have been late to attract people who understand the changing landscape or when they get talents with skills in these technologies they did not know what to do with that. And they could not provide them enough space and opportunities to explore.
To counter the disruption, established firms are opting to buyout the startups that are able to create a buzz in the market. And the deals often come off as quite complimentary. The big firms have the clients and the small ones have the talent. They pair up pretty well. There are collaborations happening as well. We at AdComm also collaborate with a lot of technology companies when we see there is a synergy for us.
Future Startup
From your experience, what does it take to make it in the advertising industry or build a sustainable ad agency?
Nazim Farhan
The hygiene factor for the advertising companies is talent, without any doubt. When you starting an ad agency I’m assuming that you have that. Frankly, there are many people who are opening up shops but have no idea about what’s going on there. Unfortunately, more and more of this is happening. A brief observation will tell you that many people are offering subpar services and expect that it should work. I think this would not cut it in the long run.
Now, once you have the talents, in order to build a sustainable business, it's essential to find out your position in the market - where you fit in, what’s your competitive advantage in the business environment and so on.
Nothing happens in isolation anymore. For example, my competition for talents is no longer with other ad agencies or new smaller agencies; we have to compete with e-commerce businesses and other business where there are interesting work opportunities.
This is how new dynamics are shaping up the new rules of business and nothing happens in isolation. Managing a brand has become much more complex. If somebody can acquire this skill, they do have a good chance.
Then there are business things such as you need a good team because you can’t do it all alone.
If one can acquire all the required resources and maintain proper coordination, s/he can hope to build a lasting brand.
Future Startup
You talked a little about the changing advertising industry in terms of technology and medium and the challenges it poses. Now, this change has always been there. As you mentioned, once TVC was a still picture with background sound. There was only one channel and so on. This type of evolution is a natural and continuous process. And it does pose certain challenges. Some of them are existential in nature and you are working on that. Apart from that, what are other challenges do you see for AdComm going forward?
Nazim Farhan
The advertising industry, in general, has made a mistake in the past by popularizing the commission payment system. We allowed somebody else to dictate what my worth is - how much we get paid. Because we used to work on commission. It has led way to other people determining our pay rates.
Under the commission payment system, we received a certain percentage of the total spending on television or newspaper for ads by companies. We acted merely as the agents of the latter. That's why ours are called the agencies. Originally, agencies were the agency of the newspaper. The newspaper used to offer a commission in exchange for bundle ads or a number of ads. At a certain point, agencies started to offer design, almost for free, in exchange for that commission. Over the time, agencies found out that making designs and coming up with ideas are expensive and the commission does not make sense for all of it. That’s when the transition happened.
The commission system has since gone out of trend. It was replaced by the ad agencies proposing a budget for every job they are being assigned. That has happened.
What’s happening now is that the advent of digital technologies has presented us with even newer challenges. Previously, we used to make only one TVC for a certain period at a cost of several million taka. And now we make 10 digital ads within, say, a quarter, and spend a million on each of them. In this case, the unit cost of the ads has come down but the amount of effort definitely has not. We still need to make one script for one ad and 10 for ten and so on. As a result, the cost has gone up and margin has disappeared at one point. With our declined profit margins, it has become tougher for large ad firms to maintain their profitability. This has also affected our performance on many fronts. This has become a challenge for agencies, particularly big ones who need to maintain large overheads.
The mistake ad agencies made is that the pushed the market to a cost-basis competition which is not sustainable. This is affecting other areas of our work as well. It is becoming difficult to train our people and produce great works. This not helping advertisers either. They are not getting good work. This also restricts our ability to attract best talents.
To tackle these issues, there should be changes made in strategy. In my opinion, advertisement services should charge clients like a consultancy service like the way you pay a lawyer on an hourly basis.
We have to move up the value-chain and actively participate in the decision-making process. Most importantly, ad companies must shed the shell of an agent and emerge as independent entities. We should play a part in solving problems for the companies. Instead of making the only TVCs, we should help the advertisers to achieve their objectives instead of being merely an executioner.
This was the case in the past. Ad agencies used to be in the boardroom and help companies make decisions. Advertising used to be a big picture decision. Now we work merely at the execution level. It is being delegated to the departments and now to move down the road. It causes challenges for the brands. And at the same time, does not solve big-picture problems for brands in many instances.
We should go back to the boardroom and be part of the real problem solving - helping brands figure out real problems. Advertising agencies should move to consulting business. I think that should address some of the challenges that advertising agencies are facing today.
Future Startup
You have a digital agency called Bagher Bachcha Digital.
Nazim Farhan
Bagher Baccha is our answer to digital changes. It mainly focuses on advertising on digital platforms, particularly on social media networks. Initially, we worked mostly with designing banners and managing online fan pages. But it's no longer our highest priority anymore.
Instead of just putting up banners every now and then, we are asking our clients to engage more with their consumers as well as engage us in the process of solving the problems for which they are making banners or managing the page. We now focus on helping brands to take advantage of digital and digital technologies to achieve their objectives instead merely helping them to do the creatives. It runs experimental projects with brand new technologies like artificial intelligence, big data and so on.
We have to move up the value-chain and actively participate in the decision-making process. Most importantly, ad companies must shed the shell of an agent and emerge as independent entities. We should play a part in solving problems for the companies. Instead of making the only TVCs, we should help the advertisers to achieve their objectives instead of being merely an executioner.
Future Startup
You help other brands to market their products to the customers. How does your marketing work? How do you reach out to your customers?
Nazim Farhan
The process is different for each of our ventures. Let me just talk about how we do it at Adcomm. Fortunately, it has a very positive brand awareness. So we don’t require much effort on that front.
A few years ago we looked into where do we get new business from and our client acquisition history. Interestingly, it became evident that majority of our business has been coming from old clients going into new jobs, which is a great thing for us. We feel very good about it because we must have done something good at his old company for him/her to call us up from his new place and consider us as a reliable partner. That’s one.
The other is when you are big company pitching for a job usually you get the calls or get shortlisted for being one of the reputed companies. Once you get shortlisted, the rest of the works get easier. I think that’s how it works.
Future Startup
What are the plans going forward?
Nazim Farhan
Our focus will be on digital and what can we do there. I’m using digital as a broad and generic term to refer to our ways to realize technological advancements and harness it to cater to our customers more efficiently. It is not only social media. It is about how do we use technology in general to achieve the objectives of a brand.
As I said earlier, how we can move away from mere advertising to creating solutions for our partners. We want to serve at the high-level strategy design. We even want to say that you don’t need to come to us for creative, you need to come to us for the strategy.
We have some benefits. We have been working for a very long time for clients from a diverse set of clients. This has helped us to develop a deeper understanding of industries and markets. We have the intelligence. We understand the pulse of the market.
We have several competitive advantages over other ad firms. To begin with, our clientele comprises of a varying type of companies. It has helped us to understand certain areas with more clarity. I want the companies to call us not just when they themselves decide the what and how of marketing but when they need help in solving real business problems (e.g. a sales decline) as well.
We are already pitching this. We saying that don’t call when you already decided that you want to consumer promotion. Call us when you are facing a challenge with sales drop or a brand crisis and trying to figure how to navigate that challenge. As a consequence, our focus for the coming years will be more into digital, analytics, business intelligence, big data and the likes.
Future Startup
The world of advertising and communication has changed over the last few years. The number of TV channels has gone up. It no more feasible reach all of your TG using a single TV channel. The noise level is too high and it is hard to get through it. Then comes the new media. People are always on their phones. On Facebook. Youtube is there. Attention is fragmented. Distraction is too high. People now use ad blockers to avoid ads. And on social media, they don’t attend to ads that they don’t find interesting or useful. I think the key difference between traditional and emerging ad technology is in the fact that the role of the audience in the former is rather passive while the latter bears a participatory attribute. Communication has become a very challenging affair. What do you think how can brand managers and marketers can deal with this challenge?
Nazim Farhan
Unlike the past, controlling doesn't seem like a viable option. The old model of control is gone. Now we need to find a way to spark a conversation among the targeted audience about the brand. Now there are too many things to do. There are endless channels and platforms. The question is do you need to do all of that, the answer is no. You need to do things that make sense for your business. You need to understand what is your purpose and then follow-up with activities to establish that purpose.
Marketers today need to be absolutely clear about their purpose. They need to design a planned perception of a brand which the people would receive and own. For example, one of our biggest clients, Robi, champions the slogan - Jole Uthun Apon Shaktite-(Rise up in our own might). Now, as their advertising partner, our responsibility is to convey this core message of the brand to the mass through whatever channel we deem necessary. I think understanding your purpose and working on it is the ultimate solution to brands challenges.
As I said earlier, how we can move away from mere advertising to creating solutions for our partners. We want to serve at the high-level strategy design. We even want to say that you don’t need to come to us for creative, you need to come to us for the strategy. We have some benefits. We have been working for a very long time for clients from a diverse set of clients. This has helped us to develop a deeper understanding of industries and markets. We have the intelligence. We understand the pulse of the market.
Future Startup
Advertising industry has been going through a lot of changes in the past few years. In the US, digital continues to grow at a rapid pace while TV ad market saw a decline for the first time last year outside of a rescission in many years. At the same time, how people consume content has changed a lot over the past years - thanks to Youtube and Netflix. Do you see TV ad market is facing some challenge in Dhaka in the coming years?
Nazim Farhan
New technology has always disrupted old technologies. Film theaters took a blow when DVD was introduced. TV channels are now gradually being replaced by online streaming services like Netflix.
But I think TV channel can counter this drawback by focusing more on the type of content they market. Take Disney, for instance. They have moved to different areas such as film, news, sports, and toys to survive. If our local TV channels can focus more on creating better content, they can hope to handle the decline in their viewership.
Future Startup
What is your management philosophy?
Nazim Farhan
In managing people, I believe in a hands-off policy. In that respect, I have been fortunate enough to get really cooperative and sincere colleagues. The Head of Operation at Colors FM, the Managing Director at Graphic People, the General Manager at Activision, the Head of Client Service at Adcomm - these are some of the very capable people I am lucky to work with. Which makes my job easier.
While making decisions, I take everyone's opinion first and then implement it. It is a participatory and collaborative style you may call.
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1) Interview by Ruhul Kader, Transcription by Rahatil Ashekan
2) Further reading on AdComm here.
3) This is the first part of a two parts interview. Part two of Mr.Choudhury’s interview will be published on May 02, 2018. Stay tuned.
