After losing much of their corporate accounts to large multinational advertising agencies, small agencies are finding themselves being eased out of the lucrative government segment too.
Over the last few months, several public sector undertakings and government bodies have raised the bar for empanelment of agencies, in effect slamming the door on smaller agencies for whom such business was bread and butter.
For instance, the Employees' Provident Fund Organisation recently floated a tender for the empanelment of six agencies, which specified that only agencies with an annual turnover of Rs 120 crore (Rs 1.2 billion) and above could apply.
This would have left less than 10 agencies in the fray, industry sources said. The EPFO tender was repealed 15 days back, after Rashtriya Advertising protested.
The Oriental Insurance Company has also set the condition that an advertising agency pitching for its account will need to show print media billings of Rs 25 crore (Rs 250 million).
As the print media component, on an average, accounts for 45-50 per cent of a company's total billings, it effectively means that no agency with a total billing of less than Rs 50 crore (Rs 500 million) can apply.
"The turnover limit set by Oriental is paradoxical. Barring one agency in Delhi, no other agency in the northern region will qualify," SK Swamy of Akshara Advertising said.
As a result, small agencies are now gasping for breath.
"Although historically big agencies have, by and large, done good creative work, the size of an agency is not the most useful criteria.
"Instead of a bar on the turnover, these bodies need to introduce a selection process where industry experts are invited to judge agencies by the kind of work they produce," Pulak Chakraborty of Twohmp Communications Pvt Ltd said.
Government bodies, on the other hand, said these new criteria were meant to limit the number of agencies. "We have to select only a few agencies. There has to be a certain criteria to choose from among the 4,000 in town," an Oriental Insurance Company official said.
Several small players called for more flexibility in government norms. A government body, which typically has a panel of agencies doing the job, may end up distributing it between five large agencies. Thus, the billing of each of the large agencies is in no way commensurate to their size.
However, Ranjan Bargotra, president of Crayons Advertising & Marketing, felt that the government bodies had every right to appoint agencies in this manner.
© 2025