'Give brand managers a 5% marketing budget to explore trends like awards, sustainability, and digital': Sudhir Sitapati

At the AAAI Subhas Ghosal Memorial Lecture 2024, held in Mumbai on 18 January, Sudhir Sitapati, managing director and CEO, Godrej Consumer Products, explored how advertising can catalyse long-term brand growth and financial success. 

 

His lecture emphasised the link between advertising, value creation, and the crucial role agencies play in persuading CEOs of the efficacy of their unique approaches.

 

Introspecting the brand 'adland'

 

Sitapati initiated his discourse by spotlighting the transformative journey of advertising over the past four decades. 

 

Urging the advertising sector to engage in critical self-reflection, he expressed, "While actively building strong brands for others in India, the advertising industry should introspect on its own branding and marketing strategies."

 

In a call to action, Sitapati stressed the need for agencies to develop a unique and firmly held belief system that goes beyond a mere tagline, guiding actions across all platforms.

 

Citing a controversial opinion, Sitapati remarked, “Brands should focus their importance on being famous before becoming persuasive, prioritising brand penetration over presumption, and the media principle of whispering to many rather than shouting to a few.”

 

Engage with CEOs and CFOs

 

Addressing the pivotal role of understanding the target consumer in marketing, Sitapati argued that agencies aspiring to influence brand sector profitability must engage with CEOs and CFOs, along with CMOs. 

 

“These non-marketing individuals, possess the capability to impact the advertising sector's bottom line significantly. The importance of recognising a CEO's expectations from advertising agencies highlights their desire for attention and sensitivity to sales pitches. Agencies should convince brands CEOs and CFOs that their religion is the right one to follow,” he stated.

 

Drawing parallels between CEOs and consumers, Sitapati pointed out the nuanced nature of their desires. 

 

He voiced, “While endorsing qualities such as boldness, disruption, purpose, and sustainability, the challenge lies in aligning these desires with their willingness to invest — a reflection of the diverse priorities observed in consumer spending.”

 

Reflecting on his experiences a decade ago, Sitapati acknowledged the persistent gap between aspirations and budget constraints in the advertising realm. 

 

He shared, “There should be an innovative concept of 'funding games,’ involving a 5% marketing budget allocation to empower brand managers to explore trends like awards, sustainability, and digital within defined limits.”

 

Fuel the bottom line 

 

Sitapati emphasised the indispensable link between advertising and value creation, urging agencies to go beyond traditional metrics and focus on strategies that contribute tangibly to the bottom line.

 

He noted, "CEOs articulate their views regardless of their public position, often ready to commit substantial resources only when foreseeing a positive impact on share prices within the next six months."

 

Reflecting on the role of advertising agencies within the spheres of CEOs and management consultants he shared, "Recognising the pivotal role of the CEO, advertising should be viewed as a mere function to embrace it as a fundamental driver of brand growth."

 

Recalling a strategic move made two years ago, Sitapati detailed, "We substantially elevated our advertising expenditure, moving from 8.5% of our revenues to approximately 13.5%. This significant increase is not merely about numbers but reflects a strategic decision rooted in the belief that advertising is an investment in the future. Our commitment to this approach is evident in the tangible results – a noteworthy surge of 60 to 70% in our share price. This ascent is a testament to the faith investors place in the potential that advertising holds, positioning it as a vital force in shaping our future success."

 

This bold manoeuvre, highlighted by Sitapati aimed to capitalise on the belief that advertising investments significantly contribute to future financial gains, a conviction that materialised in the remarkable rise of their brand's share price. 

 

Speak the language of data

 

Concluding his lecture, Sitapati advised agencies to speak the language of numbers when engaging with business-focused clients. 

 

He summarised, “The real consumers are those that control the P&L. Hence, there is a need for the integration of marketing, advertising, and market research under one roof, leveraging data for more effective decision-making.”