By Ashish Pratap Singh
Incredible growth, heavyweight global clients and an impressive show at the recently held Cannes Lions 2011 are only a few feathers in the cap of Omnicomowned media agency PHD, which has an eye on the Indian market, especially its digital segment.
From a humble beginning in 1990 in London, PHD elbowed its way into the power arena of niche media service companies of the world. Twenty-one years and more than 70 offices around the world later, the company is now looking at India, for which it has big plans. Yet to make an official announcement about when exactly the company plans to enter India, Mike Cooper, CEO, PHD Worldwide, looks for the right positioning for the Indian market to tap more international and regional clients. But the biggest challenge for the company is to find a foothold in an arena dotted with extremely competitive local and international players.
OFFICIALLY ENTERING INDIA
Cooper confirms that PHD will officially enter the Indian market soon. And naturally so, because the brand is already here and so are the clients. “The reason why we have not formally announced it yet is because we see PHD as a very special kind of agency with a very special heritage,” says Cooper. “The heritage dates back to the time in England when it was launched 21 years ago. So, if you are going to be true to that heritage, you have to make sure that you have the right ingredients in place before you launch it.” Contrary to the belief that the Indian market is crowded with agencies, some industry experts believe that it is the right time to be in India. “Five to six top agencies are handling roughly 65 per cent of the business. The rest 35 per cent is fragmented,” says Pratap Bose, CEO, Mudra Max. “It has huge untapped potential.”
The biggest advantage for any global media company entering the Indian market now is the tremendous growth opportunity. A highly educated workforce, work-hungry professionals and a tremendous amount of heritage and self-belief put together have made the Indian market unique. According to Ajit Varghese, managing director, Maxus Global, global media agencies have a distinct advantage of learnings acquired from developed markets. “These best practices and scientific methodologies can be put to great use in India,” he observes. Cooper says that he always saw the signs as he has been watching India grow for the past 10 years. “Our Worldwide CEO (Omnicom) John Wren has spent a lot of time in India and that proves how crucial the Indian market is for us,” Cooper explains. However, he pinpoints some obstacles in entering the Indian market. “The biggest one is finding the right talent. While there is no shortage of it, there is certainly not enough to go around. My experience is that if you compromise on pairing the right kind of people with the job that you have, it is always a mistake,” opines Cooper. Varghese points out another drawback. “The big media agencies entering India will leverage their global clients in this market. The local brands in small towns will not be reached and thus will only be serviced by local media agencies,” he says.
GROWTH AND POTENTIAL
Thanks to the very dynamics of the Indian market, global clients enjoy a phenomenal growth here. But there is obviously a lot left untapped. PHD already manages Unilever’s digital business, which, according to Cooper, “is a great privilege”. “It’s a very demanding piece of business and for them to entrust us with the most exciting and the most dynamic piece of business shows tremendous belief in PHD in this market,” he says.
As Anita Nayyar, CEO, Havas Media, India, puts it, for any global media agency looking to enter a new market, the first step should be to leverage existing global relationships in the new market. “Aligned global brands will help in providing a decent business base which can be layered by adding regional brands,” she says. However, Rashmi Ranjan, head of buying at Allied Media Network, says that more than banking on existing relationships, a company should look at strengthening its creative and communication strategies.
“It is a very exciting time to be in India right now because the businesses are growing rapidly,” says Cooper. PHD is ranked 12th in the world based on overall billings in 2010 (Source: RECMA). Despite an overall increase of 18.6 per cent from 2009 in billings, they will look to increase their industry share from 2.8 per cent.
Regarding PHD’s positioning for the Indian market to tap regional and international clients, the company will strive to strike a balance between regional and global clients. “Since PHD has not formally set up shop in India, it will not be wise to have an all-global portfolio as it will not provide an indepth penetration of the market. On the other hand, it will not reflect positively to have all local clients because then the global partners do not have a high opinion of the company in that particular market,” observes Cooper. This thought is seconded by Bose, who says, “Any media agency needs to have a balanced mix of international and local clients.” The company works with some of the biggest global brands in the world like Unilever, Porsche, Elizabeth Arden and Canon, to name a few. They have a lot ofmedia clients as well like The Guardian newspaper, The Discovery Channel, Google, etc. “In India, we want to have a blend of global and local clients and also a dynamic group where we have an opportunity to showcase some really nice work,” Cooper adds.
PHD’S ‘SIBLING’ OMD
OMD and PHD are like two siblings from the parent Omnicom family. Before 1991, OMD enjoyed numero uno position. However, the need to target a different section of the market and a separate positioning led to the creation of PHD. “OMD and PHD are quite different in terms of the positioning of the brand and the agencies they compete with,” says Cooper. Formally, they never set out to compete with each other in bidding for projects, but they do cross paths from time to time. But if numbers are anything to go by, then PHD has a lot of catching up to do. While OMD enjoyed 10.5 per cent market share globally in 2010, PHD was only at 2.8 per cent (Source: RECMA).
It is healthy competition, but competition nonetheless, and that is why Cooper makes it clear why Omnicom as a group does not consolidate buying of the two media brands anywhere in the world. This is because both OMD and PHD have separate media-buying capabilities. They do, however, share limited intelligence across the group. “We will sometime use our scale across the group to negotiate with media owners. So we may have someone working across scales for both brands and any other businesses that we may have to negotiate together,” states Cooper.
PLAN FOR REGIONAL BRANDS
A growing number of Indian brands are gaining significance on the global stage and there is no better example than the Tata Group. PHD can offer a number of solutions to brands such as these. “The company can help them master the western markets’ sophisticated marketing techniques in India. We would also be able to offer them access to global markets through our expertise and 72 offices around the world. This is one of the key advantages that a brand like PHD has and it should be played well to its advantage. Given its heritage, PHD has the backing of Omnicom, one of the largest groups in the world, and hence will have the advantage of aligned business and a strong product offering,” says Nayyar.
Cooper is an expert of sorts on Asian markets because he came to work in Asia 20 years ago and has been keeping a close eye on them ever since. Back then, he observes, Asian companies didn’t see any value in marketing and were quite resentful about spending money on advertising. “But in the last few years, Asian companies have started to see the benefits that come from undertaking a sophisticated marketing approach, which consists of research and innovation and creativity to engage with the consumers,” says Cooper. “If one were to go by this, Indian companies would inevitably succeed globally if they use the approaches that companies like PHD specialise in. PHD has done similar projects for Unilever in the UK, Siemens in Germany, Hewlett Packard in the US, etc. One will have to wait and watch the company take one heavyweight regional client and handhold it to global recognition.”
TARGET ADVERTISING
Media agencies are investing a lot of resources in target advertising through digital. PHD too is looking at digital trading as the next big thing and is being supported by Analec, a research enabling solutions company. “Target advertising around the world will be absolutely crucial. Areas like digital trading will be of tremendous importance,” feels Cooper.
NOW, THE ROAD AHEAD
China and Australia were the top performers for PHD in 2010. In China, they bagged Unilever and other big players. Cooper attributes this phenomenal success to a brilliant leadership in both countries. “The clients are now interested in a more strategic approach to media and a more innovative approach to marketing,” he states. “The Cannes Lions 2011 saw large contingents from Unilever, Kraft, GSK, etc. This was in stark contrast to contingents participating in the awards three to five years ago. This reiterates the fact that creativity, innovation and strategy are integral to communication. We want to occupy this very space in India. The success that we had in Australia and China and throughout the Asia-Pacific is because of the emphasis that we put on being a more intelligent, cerebral, strategic and planning- focused media brand. China is still enjoying a very strong year in 2011, and we are seeing very good growth in places like Thailand, Philippines and Taiwan as well.” As for India, Cooper expects PHD to have solid numbers and one of the best growth rates by 2012.
‘THE MARKET WILL DETERMINE WHICH AGENCIES SURVIVE’
Mike Cooper, CEO, PHD Worldwide, on his company’s plan to enter India, its positioning and his views on Asian markets.
As India is already teeming with media agencies, will PHD be able to create a foothold for itself?
It is a market and like any other market, the market itself will determine which agencies survive. It is an obvious capitalisteconomy behaviour where the suppliers who do not perform or charge competitively will be out of business.
Can we expect PHD to announce its formal entry in India?
Not right now, but before long, we will announce our entry. The delay in formalising the announcement can be attributed to our obsession with differentiated thought at the core of the company. It attributes a lot of its success to attracting the right kind of people and having the right kind of leadership. Fundamentally, it is still a people’s business. We attract those who are thinking and planningoriented
and want more people to know about us.
What is the market scenario of emerging Asian economies vis-à-vis mature Western economies?
We work with Unilever in China, Taiwan, Hong Kong, India and also throughout Central and Eastern Europe. We and other players enjoy tremendous growth in these markets as they are emerging and growing. The rate of growth will only gather speed. However, it is in stark contrast to markets in western Europe (Spain and Portugal) and North America, where there is a battle for existing market share. These
markets are actually shrinking.
What will set PHD apart from its competitors in India?
PHD is a relatively new media agency. We could not have afforded to be just another horse in the race. We carefully thought about our reason of being in the market, positioning and why anybody would choose us over another media agency. China and Australia are both very established markets and have a lot of players vying for the market share. It was our unique approach for these markets that helped us get ahead. It will be the same in India.
Tell us a bit about your initiative Drum.
Drum is PHD’s creative content agency. It is the UK’s only full service agency specialising in contentled communications within a media agency. It was set up in 1993 with a team having a strong background in innovating and understanding how brands produce content to create a powerful dialogue with consumers. Drum delivers projects that are diverse in execution but united in a common aim: to engage audiences through quality content.
Feedback: ashish@exchange4media.com
