Indiantelevision.com Team

(18 March 2008 5:30 pm)

MUMBAI: With a view to pushing clients to performance-driven media choices, Lintas Media Group and Indian digital advertising firm Pinstorm have announced a significant non-equity partnership.

The alliance estimates that they will be able to drive an incremental Rs 1 billion of advertising to move over from traditional models to a performance-driven model in the first year of operations.

Lintas expects to get the first-mover advantage in the pay-for-performance model in India. In this model, the agency pays for the media and the creative while advertisers pay for the results.

Effective immediately and in place across all advertisers in India, this new alliance between two firms in the offline and online worlds is expected to put further pressure on traditional agencies and media houses, and boost the world of digital advertising.

Announcing the collaboration, Lintas Media Group CEO Lynn de Souza said, "We don't think that just buying a digital agency will contribute to our client's success. What attracted us to Pinstorm was their pure adherence to pay-for-performance – a vastly different model to the commission and retainer structures that Indian clients are used to. We think this model can go a long way in bringing accountability and transparency to investments in advertising."

The pay-for-performance model was pioneered by Google and Yahoo!, and has been pushed further by Pinstorm, where the agency pays for the media and the creative – and the advertisers just pay for results.

Pinstorm founder-CEO Mahesh Murthy said, "Around the world, media costs are going up and clients are cutting commissions and retainers because they aren't able to see how their advertising is performing. At Pinstorm, we make it simple, by asking a client to only pay for the prospects or results we deliver. Our alliance with Lintas comes from our joint belief that the Rs 16,000 crore Indian advertising industry needs a new model. We believe that working together, we can bring pay-for-performance advertising into the mainstream of advertiser choices."

Added de Souza: "An industry only grows when there is pay-for-performance. For too long have clients worried that their agencies and publishers are simply recommending higher media spends because that's how they earn more. That era will soon end. Our work with Pinstorm is to collaborate on clients to give performance-driven options initially across digital media -but we hope over time to grow the same basis to traditional media like broadcast, print and outdoors too."

The Lintas-Pinstorm alliance will first come into effect on Lintas' roster of clients and soon expand to other businesses.