Harry Jayawardena tries his hand at media, advertising
Sri Lanka’s business dynamo Harry Jayawardena
– whose fingers are in the pie of a gamut of economic activities
ranging from alcohol, leisure, banking, farming, milk food to insurance
and telecommunications – has now ventured into the media.
Jayawardena, who triggers controversy whenever
he steps into a new field of investment or buyout, has got the advertising
industry worried with lucrative accounts being lost with the setting
up of Spendour Media which will handle media buying and also creative
work for his string of companies.
“Through the new company all Jayawardena
controlled public and private firm media budgets are linked and
the 15 percent agency fee to all the advertising firms are saved,”
an industry source said adding that this is a huge cost saving to
all the companies, but a major punch to all the agencies who had
Jayawardena controlled company accounts.
The industry is reeling under what they stand
to lose like Sri Lanka Insurance (roughly Rs 200 million ad spend),
HNB (around Rs 200 million) and others like Distilleries, Lanka
Milk Foods or Aitken Spence with media spends of around Rs 40 million
each.That’s not their only worry.
Apparently the new company is offering far-above-market
rate packages for staff and looking to grab the best.
The source said that Splendour Media sells the
consolidated media budgets to a media buying company called Media
Factory, which in turn buys media space from the media. “The
selling power of media budgets is through bulk selling and Jayawardena
has been very strategic in this regard,” a Jayawardena company
source, who declined to be named, said.
Ad industry sources are also raising ethical issues
in the tactics employed by Jayawardena in the media-buying strategy.
“Unrelated companies have different media budgets and while
it is true that all the budgets pooled together will fetch more
advantages such as bonus adverts on a television channel for an
example, it might not be very ethical to allocate those extra adverts
to Jayawardena’s private companies, which were in fact based
on the public quoted company budget allocations,” an ad source
He said all benefits from public quoted companies
should be enjoyed by these companies and their shareholders and
if not it raises issues of not informing shareholders and unethical
Industry sources said in some cases, Jayawardena
– who often gets directly involved in negotiations unlike
many company chairmen – has offered a percentage of the commission
to ad agencies in lieu for taking away the account from them.
The reduced commission issue also stirred a controversy
some years back when some agencies resorted to this – against
established practices – in getting new business.