[Title unresolved] 'A huge ad spend is merely proof of laziness in product development.'

Why are you taking away my bread and butter," says a friend of mine, pretty senior in one of India's leading ad agencies. Indeed, as an alum of some of the nicer agencies myself, I agree that it probably is ungracious to bite the hand of an institution that fed me for over 10 years.

The lady was referring to a comment I'd made about the need for advertising-I had argued that the truly innovative, truly cool products didn't need advertisement at all. Insensitive wretch that I was, I also questioned the integrity of agencies drawing huge commissions, the holy cow of advertising finances.

Advertising has an old, strange history. It started with newspapers offsetting their production costs by including paid-for notices. Up sprang 'agents' who then told the papers that they'd source ads and charge a sales commission for this. While this started over a hundred years ago, precious little has changed. The essential problem is still the same: many advertising agents (all right, call them agencies if you like) still insist on getting commissions from the media for placing ads.

In effect, they're working for the newspapers and television channels, and not for you. Over the strenuous protestations of the 15 percenters (who, I am sure, will inundate my mailbox with their hate mail), I will relate one incident. I was working in an agency-the biggest in Asia-and figured that the solution to a particular client's problem required one hour of skywriting. The 'suits' (a.k.a. account managers) protested, saying they wouldn't earn enough media commission on the idea, and instead stood up to push for a two-page ad that cost the client eight times as much. I knew then that they worked for the newspapers, and not for my client.

Times are changing, but slowly. Today, many agencies work on reduced commissions, and a tiny few brave ones work only on fees-leaving the media selection and buying to an external house, which again charges some sort of a commission-sometimes as little as 1.5 per cent. But whether it is 1.5 per cent or 15 per cent, the linking of fees for strategic and creative thinking (which is what agencies should charge anyway) with the amount you spend is an asinine idea-one that I hope will die a quick death.

So what kind of agencies should you go for? Hopefully one that charges you for its time-and maybe even a slice of the increased revenues or profits they deliver to you. With absolutely nothing from placement media of any sort.

What kind of change will this bring about to your marketing outlook? A lot, I hope. I've mentioned this before-but most of the globally successful brands built over the last few years: from Amazon to Yahoo to Segway/Ginger Scooters to eBay to Google to Viagra had almost no advertising spend whatsoever. And no, not all of these are dotcoms, or first to market.

They've all been built by word of mouth. And those words of mouth came from satisfied evangelists. And those satisfied evangelists came from products that were special enough to delight their customers and create a 'buzz'.

Indeed, my first corollary of ad spends is this: the more indistinguishable your product is, the more it will cost to market. A high ad spend is merely proof of laziness in product development.

Think about all the highly advertised categories. Would you rather spend Rs 100 crore to market a coloured, sweetened soda-or spend a crore to develop, say, a cola that slims, or has mild aphrodisiacal properties, and have it sell itself? Would you spend Rs 50 crore advertising yet another TV-or Rs 50 lakh to build one that records the daily soaps from the top four channels simultaneously on a hard drive, and lets you see them when you wish-while automatically skipping commercials? Which would cost less to market?

The war for mindshare and brandshare is not going to be won by obsolete measures like "share-of-voice" and "cost per rating point". It will be won by whoever out-innovates the others.