The Starcom MediaVest Group has shored up its India operations after a turbulent couple of years. From arrested growth due to loss of big clients, lack of big wins and a slow market, the agency has fought back, winning new accounts, hiring new talent and sharpening the focus of its offerings.
In the last one year, the Starcom MediaVest Group has averted an internal downturn of sorts and changed the way it was being seen and heard in India. From perceived growth stagnancy due to loss of big clients like P&G and the Future Group, lack of big wins and a slow market reducing clients’ spends, the agency has fought back in an attempt to reclaim its lost glory.
Incidentally, SMG Global was adjudged the highest earning agency in 2010 worldwide according to the latest RECMA Overall Billings Rankings (see graphic) with revenue of $ 31 billion, but the India story is different. SMG in India has a long way to go even to be among the top three. Of late, a fresh infusion of quality talent has given the agency the momentum to grow its business, and India operations today seem to be on track.
Of prime importance in this regard have been the appointments of CVL Srinivas as Chairman to oversee India operations in January, 2011 and a few months later, CEO Mallikarjunadas CR, to look at client dealings and day-to-day operations of the agency. Srinivas is also MD, APAC of LiquidThread, a digital-led content development practice launched by SMG globally. Srinivas's strategy for SMG is to "be the bridge between global thinking of SMG and local challenges." Apart from growing the business, people-management is his key task. Therefore, getting the right talent and ensuring that the existing talent is motivated in the right direction are his priorities.
Many had questioned the viability of the Chairman-CEO team, unique in many ways to Starcom, but it has worked to the agency’s benefit.
THE BUILDING YEAR: 2011
Though many exits marked the beginning of 2011, many fresh faces came in to fill the gap. Even as the likes of Ravi Kiran, Sandeep Lakhina, Pushkar Sane and Nikhil Rangnekar left the agency, notable new hires included CEO Malikarjunadas CR, Arnab Mitra, Raghav Subramanian, Rajendra Dwivedi, Sulina Menon, Deepak Sharma and Anita Bose, among others. In some cases, new positions were created to make the most of collaborative efforts.
The turnaround year also saw the building of two brands – Starcom & MediaVest within SMG. The two independent brands – Starcom Worldwide and MediaVest Worldwide – co-exist in various international markets at present. Starcom came out of Leo Burnett, and is built around the human experience philosophy. Mediavest also subscribes to the human experience philosophy, but the way it brings this to clients is different. Mediavest has its own frame-works and approaches, which are quite different from Starcom. But both are supported by the same ideology, research and digital infrastructure of SMG.
“Normally, we don’t pitch against each other, but there have been a few instances where the clients have invited both Starcom and Mediavest. In such cases, we make one thing clear - we don’t compete on commercials, so the commercial terms are the same for a client; only the product and the approach change,” says Srinivas.
The group has been committed to move beyond a mere ‘media agency’ tag to become a ‘Human Experience company’, with its three-pillar strategy – focus on Insights & Analytics, Digital and Content. “Our task, from the beginning of the year, was to develop Starcom and MediaVest as two independent agency brands in India that both leveraged SMG’s global reach combined with each agency’s local expertise,” Sheehy says. Aligning SMG’s resources in the growth areas, and monitoring growth of diversified services offerings in various markets helped the company create a differentiated media product, attract quality talent and grow SMG's business at a pace faster than the market average. Unlike other agencies in the marketplace that “are still working in the commodified world of planning and buying”, SMG hopes to “become a storehouse of research and insights that can help integrate communications plans across media and non-media channels. We feel we’ve carved out a unique place to operate that’s focused on where the industry is headed, not where it’s been”.
DELIVERING THE HUMAN EXPERIENCE
At the core of SMG’s business objectives is creating the ‘Human Experience’ for clients and consumers. “Starcom is about creating human experiences... business results and creative experiences for big clients continue to be a challenge,” says Sheehy. But what are the changes in SMG’s structure and approach to deliver on this front? “We agreed several years ago to go beyond the usual buying, planning and selling to create great consumer experiences. Part of being able to create those experiences is looking at the talent and capability we have within our company for better brand building, consumer understanding, data analytics, content partnerships, digital, social, mobile, search and display initiatives. We recognize the need to deliver a meaningful product, and we’ve invested and changed in the last few years for it,” says Sheehy.
Over the last couple of years, SMG has created the Human Experience Centre, with more than 125 planning strategists globally, who have proprietary listening tools, sensing tools, video and photography capability on a global basis. Over $ 10 million has been invested to create that unique capability, to suit existing clients. Social listening tools have been contracted in different languages. Investments in digital, talent, social or mobile reflect a significant shift from where SMG was two years ago. “If you look at India specifically, Srini, Malli and the rest, it is different from even nine months ago. In the last 48 hours, we have talked to different partners recognizing the need to create ways to bring those experiences to life,” says Sheehy.
So do we see a few examples of the Human Experience network already? “We have a few examples. The quality of the product has definitely moved up by a couple of notches in six months. Today, we are able to go beyond planning, buying and strategy evaluation, into one particular place, creating a campaign,” says Srinivas, refusing to name a work-in-progress client. “There is another big client of ours who has had an issue with the traditional form of advertising and for certain reasons, we couldn’t use those. We’ve just lifted the level of engagement of that client to another level.”
Sheehy adds that he too was involved in that dealing. “I had a lot of success across all the geographies, major markets, core markets, emerging markets.
We realize that in the digital age, where individuals consume broadcast media, as well as broadcast themselves into the digital world, the role of the planner has fundamentally changed. Our clients and consumers have access to multiple data streams. Our job today is to understand and interpret these and create experiences that are simple, meaningful and real-time. We are looking at actively driving the Human Experience Company concept in India in 2012,” adds Mallikarjunadas.
WHERE IS SMG INDIA POISED?
Some clients have sought to hold media agencies accountable to measurable results in terms of CPRP guarantees. So is SMG willing to guarantee results? “With most of our key clients, this is one of the metrics in evaluating our buying product. There are also several other parameters besides CPRP that our buying gets evaluated on – including impact, operational hygiene, salience, etc. Efficiency will continue to be the key parameter that clients would use to evaluate agency performance. However, we believe that focusing on CPRPs alone could lead to poor quality plans. It would breed a culture of low risk- taking behaviour in a marketing function that would be detrimental in the medium run,” muses Mallikarjunadas.
Three developments in the last year-and-a-half show how important India is to SMG Global. One, the agency created the Global Management Group, looking at the 15 most important markets for it globally, and brought together the heads of these markets through this group. The GMG meets once in three months and works very closely to chalk out the growth strategy for SMG across the globe. “India is a member of the GMG, so it is evident that we are an important market,” says Srinivas, who represents India in the GMG.
Secondly, SMG created the post of a Chairman for India operations, which did not exist earlier. Now, Mallikarjunadas as CEO runs the agency on a full-time basis. Srinivas’s role is to oversee SMG as a business apart from his APAC role and provide support to the CEO and his team.
Thirdly, emerging markets are extremely important for Publicis. India and China get the lion’s share of attention, given the growth potential of these markets. In Srinivas’s words, “Whether it is terms of investment or encouragement, we are right up there. India is among the 15 most important emerging markets, and a lot has been invested in senior talent in the last year. In terms of overall priority, India is at the A level.”
LEARNINGS FROM INDIA
Many ideas or concepts that germinated in India have been adopted globally, like the training programmes mounted for staff in the digital space. “We not only train our online staff, but also the offline ones. We have been very successful, and our global leadership is happy to take some of these practices to other more mature markets,” says Srinivas. “Products coming out of this market, in terms of actually enhancing our offerings to the client... Work done on clients like Aircel, Samsung, Himalaya, RIM, Heinz have stood the test.”
There is also a learning from the way new businesses were won in 2011, with SMG India being aggressive, playing to its strengths, winning accounts across offices, and competing with the best of agencies.
SMG has a media product that claims to be future forward. “It is predicated on the three pillars of Insights & Analytics, Digital and Content. We are right at the forefront in doing the brilliant basics. With the clout of VX, we offer great buying value to our clients. Some of our tools are truly world class. We have Tardiis, which is arguably, the best optimizer in the market today. And there are several enhancements that we are planning on it. While we are future forward, we believe that our media product needs to be grounded on strong fundamentals,” says Mallikarjunadas.
According to Mallikarjunadas, 2012 is going to be an action-filled year, big on digital. While there are portents of a slowdown, there is also the fact that in the cluttered, fragmented media space, quality content across TV and print media is still scarce. And for these, demand still outstrips supply. “This marketplace, the talent, the energy, the excitement I’m seeing... something different‘s happening. And the changing environment creates a need for more investments in it,” adds Sheehy.
SMG is totally global and operates in real time. Srinivas is amazed at the kind of support an Indian can get from the US or any other SMG office. “I couldn’t believe that a media agency network can be so well-connected as SMG. We have the talent pool in India with people like Mallikarjunadas and others who have joined us. To be able to leverage the networking, we have to be able to adapt a lot of these global practices. Global practices and the local talent to and leverage them with clients is again where we have scored,” Srinivas says, mentioning the successful Samsung campaign, in which Digitas has partnered with Starcom’s own digital team to provide an end-to-end digital service to the client.
THE ROAD FORWARD
China would be among the top five markets through the size of its spends. In terms of importance too, China is a key part of SMG’s strategy. Right now, everyone in Europe, North America, Latin America, India and China is talking about recession. Growth expectations from the communication business have come down to 10%. “Maybe in the coming months, it can go up to 15%. So, while there has been a slowdown, there is still significant growth,” points out Sheehy.
But at the end, what really matters is size of business. Several SMG initiatives aim to take the agency to among the top three in India by 2012 or 2014. “There are various scales to measure agencies. At the beginning of last year, we set out to become a thought leader agency among all media agencies in the country, while delivering quality work to clients. The team has been really focused on achieving it in three years’ time. One-third of the period is over and we have laid the ground, built a foundation and we are on our way to achieving success,” says Srinivas.
‘We will stay humble and hungry for success’
John Sheehy, President, Global Operations, SMG, tells Noor Fathima Warsia that a lot of potential remains to be utilized in India.
Q] You come from Leo Burnett, a creative agency… what are some of the learnings that you bring to the media agency business?
I wouldn’t call it learnings…. What excites me about this position is how the consumer markets are changing, how clients are looking at and tackling these changes. The consumer is looking for deeper experiences, more engagement. From a media perspective, we are in a key period where we have access to technology, partnerships in the marketplace and opportunities to create new experiences. Just as creative agencies set up the brand, talk about how to build it and drive the business - as opposed to just buying and planning things - we too would like to get into that creative end, craft those drivers.
Q] You want your digital revenues to double in the next few years. As a lot of mainline media has a big presence on digital, and DTH is picking up, how do you label what is digital and what would be the pockets for digital revenue?
Obviously, there is a lot of potential in the medium but it is still early days yet in India. In 2010, things started opening up, so it is an area which needs specialists. We expanded our team in 2011 and then added new capabilities. Whatever this team is accountable for in terms of delivery, and wherever we need to pull in more expertise for this team, we will do it. How we look at digital revenues is going to change in the next few years, lines are going to blur between offline and online. There was a time when digital was called non-traditional… it may now be the other way round. TV and print are going to be called the non-traditional.
Q] Did you encounter clients giving you a specific brief about the digital medium?
Some clients are very aggressive with 14% of their budget for digital media and they invest in digital capabilities, whether it is to understand social media, search or display a campaign. Some clients are slow. They need education and in some cases, a rapid pace to pick up the buzz in the marketplace. That’s why it is so exciting about the markets.
Q] Is India’s contribution among the top five markets of Starcom’s global revenues?
India remains a key player in determining how SMG has been overall in terms of markets. But in terms of contribution, it is still not amongst the top five.
Q] If you have to cluster the emerging markets together, and rate India on a scale of 1 to 10, where will you place it and what are your expectations in 2012?
Looking at how India performed in 2011, I would rate it 7 or 8. China stayed aggressive. If you look at it in terms of talent or growth, there is optimism and India will be a very, very strong player in future. We will stay humble and hungry for future success.
‘We’ll build on the momentum we have generated’
CVL Srinivas, Chairman, SMG India and MD, LiquidThread, APAC tells Srabana Lahiri that it is a constant challenge to grow the business while delivering quality.
Q] Being leaders of the Consumer Attention Economy is the stated USP of Starcom Mediavest Group. How do you go about creating those crucial links between consumers and the brands you represent?
SMG is a company that will create uplifting, meaningful human experiences for our client’s customers. Through our best in class talent, proprietary research and future focussed approach, we are creating the links between consumers and brands.
Q] Media agencies are measured in terms of billing size. What is the result of efforts to scale up business on quality delivered, and within SMG?
It is a constant challenge to grow the business on the one hand but not lose quality for existing clients, on the other. Thanks to our bandwidth at the top three levels of the organisation, we were able to manage both. But going forward, we would not do anything that starts affecting the quality of our product or service to our existing client base.
Q] Pitches being at the core of a media agency’s business, what is the strategy that guides SMG’s pitches? Is there a unified code within the organization?
Every media agency plays to its strengths in pitches. It all depends on what the client is seeking and whether you are able to measure up.
Q] Do you plan to woo back big clients like the Future Group and P&G?
We are looking to build on the momentum we have generated and grow our business in the coming year.
Q] What if different agencies of SMG have a business conflict? Has this ever posed a problem? How do Starcom and MediaVest operate in this regard?
We have our own internal policies for handling conflicts, which are aligned with our client requirements. Starcom and MediaVest are two independent brands in the market, each of which will develop their own client base, like in all other markets.
Q] We talked of learnings and data across the group’s global offices being readily available to India. What is India’s contribution to global strategization or key operations worldwide?
There are a few areas where we export best practices. One of them is our agency-wise training programme. The quality of our product has seen significant improvement; some of the work done for clients such as Samsung has been highly appreciated and will be adapted in other markets. India has amongst the best pitch conversion records across SMG globally in 2011. This is another area where we have lots to share.
Q] What would you call your major successes in the last year and what would be your major setbacks?
Our major successes have been - bringing a strong focus to our product, infusing quality talent across levels, improving our service on existing clients, winning 18 new businesses and having the best business results in the past three years. We could have done better in managing talent during the transition.
Feedback: srabana@exchange4media.com
