Barely out of the Carat crisis, Aegis Media is nowhere in the reckoning in terms of billings and size. But Ashish Bhasin, chairman India & CEO South East Asia, tells Srabana Lahiri that the clients are coming in and its services are definitely at the top.
The lever-and-fulcrum solution may have seemed simple enough to move the entire world, but things are a tad more difficult in the media services domain. Loss of large clients, challenges in holding on to leadership teams, management decisions that led to a divorce with partner Percept Holdings and delay in investing in domains like digital and direct... Ashish Bhasin faced all these and more when he took over the reins of Aegis Media in India, ending a long stint with Lintas in 2008. In three years, he has perhaps come out of the quagmire, but needs an extra long lever to make things move.
The first task before Bhasin, chairman India & CEO South East Asia, Aegis Media was to resurrect brand Carat India, once counted among the industry’s top three. The challenge: media agencies had become far more cut-throat and competitive than earlier, and seen significant consolidation in the domain. While new agencies were aggressively entering the arena, old players too were gunning for more and launching more specialised services to catch the discerning advertiser. “It was not a very comfortable scenario for Aegis Media to have one brand that is Carat, and that too not doing so well for so many years,” admits Bhasin. “We were pulling below our weight in India, whereas in many parts of the world, we enjoy leadership position. My mandate was to make sure that we move in that right direction. Also, to see that clients get the same level of service, be it in London or USA or Singapore or India... get overall level of offering and services up to that level. Of course it involved turning Carat around, because Carat did not have too many good people and quality of the products was not world class at that time. But early in the game, I realised that the opportunity available to us was huge because globally we had very strong brands, which in India we hadn’t even tested out – that is why we launched Posterscope, Isobar, Vizeum, Carat Fresh and then iProspect.”
Globally, Aegis Media is a very strong brand, listed on the London Stock Exchange and capitalised at $2.5 billion. But where does Aegis Media stand in India vis a vis competitors like Madison Media, MindShare, Starcom MediaVest Group, Lintas Media Services, etc? According to the exchange4media Group’s Media Agency Billings Report 2009, Carat India is not even among the top 10 - ranked No.19 in the list of top planning agencies, and No. 16 in terms of buying. Though Bhasin discounts size and says that quality of services is what really matters, it is a fact that the industry has moved on significantly in the last five years, and Aegis Media needs to bag some really big accounts to stand up and be counted. Its new launches – notably Vizeum, Isobar and Posterscope – are doing well, but they are yet to catch up in terms of volume, which is an important part of the business. Omnicom’s OMD, for instance, launched barely four years ago, but has already made it to the top 10. Despite all this, Bhasin is unfazed. “Size is not what I am chasing, but I have no doubt that we will be among the top three agency groups of the country. Size will be a consequence of the great work that we are doing and we have already seen that happening. Our revenues grew by 800% from 2008 to 2011. Of course a lot of this is because we launched new businesses, got new clients, so on and so forth. We have had very spectacular success. But the others are far ahead and we do have a long way to go. I couldn’t even dream three years ago that I would be sitting in this kind of an office. It might look like a baby step, but it is an important landmark. It is very important for all our businesses to sit together because we get a lot of benefit in terms of cross-pollination,” he says. “Our job is to reach the consumer. The young consumer is on his iPod or phone all the time. He is travelling and can make a brand choice even in the toilet. The challenge lies in how you keep in constant touch with him.”
‘We can afford to be media agnostic’
You have managed to turn things around quite a bit. But there is still a huge gap with leading agencies; how do you plan to catch up?
Yes, there is a gap in terms of size with many agencies as we are relatively late entrants... groups like WPP, IPG have been around for 70-80 years... What we have been very successful in closing is the gap in terms of quality and people. In many areas, we are now leading and our advantage is that we don’t have the legacy of old creative agencies to pull us down. We can afford to be truly media neutral and media agnostic. That means we don’t have a creative director who says ‘I want to make a TV commercial, so can you put in a TV commercial into the plan’. We don’t have baggage from the past so we can give correct emphasis to the new media.
If you had to list strategies 1, 2 and 3 to grow business, what would they be?
First thing is to understand the consumer. We are studying it in a tool called CCS, which we will announce by the year-end. It will be the largest single source study done in India. This model has worked in 30 or 35 countries. We are trying to customise it here. That will give us in-depth understanding of consumers. Second, good quality thinking and planning, which are truly integrated. I make sure that my media planners spend time with each of the businesses. A media planner must be able to attend an Isobar digital meeting. We have focused a lot on training, sending people abroad to pick up the best practices. The third important thing is that we should be in a position to offer all clients what they need without compromising on specialisation.
Most of your clients are not big spenders, Do you want to remain a small specialist shop or compete to get into the big league?
We are not a specialist agency. We wish to reinvent the way brands are built. We are likely to launch later this year the biggest single-source research ever done in India called Consumer Connection Survey or CCS. It is a huge investment. Talking of big spenders, we have got three clients which are above Rs 50 crore each -- Philips, Reebok and BMW. We have got a host of clients in the Rs 10 crore, Rs 20 crore and above range, but we want to retain specialisation because I believe that a person who is a search specialist may not be able to offer you the best outdoor site. We want to be mega. Posterscope by itself will have 100 people and 15 offices by year-end. It crossed Rs 100 crore last year only in its second year. We hope this growth will continue. Some of them are small today because they have just been launched so it will take time.
What are your growth focus areas?
One is digital. The second area is OOH and that includes activation. If a consumer today is going out to malls, accessing the Internet more, then we have to adjust accordingly. These are areas which we will be driving very aggressively. They are also growing themselves. For example, a Vizeum client who used to spend Rs 3 to 4 crore is now spending Rs 25 to 30 crore. We have to keep pushing for it.
There has been a lot of consolidation in the market and recently launched agencies have grown very fast. How do you plan to take them on?
To us, big or small doesn’t matter. We like to work for clients who value us. Of course, it has to do with profit as ours is not a charity business, but one thing which works for our clients is our unique operating structure. We are able to give world class specialisation in an integrated office, and that is our biggest USP. Clients are fed up dealing with 30 people all at once. The moment they find somebody bringing it all together, it becomes a huge relief for them.
Are you trying to bring back clients like Cadbury that Carat had lost?
Cadbury was a Carat client 5 or 8 years ago. We would love to have them and any other client back, but we have more specific plans. At the moment we have had such spectacular growth that I don’t want to bite off more than I chew because we have more than sufficient business. When I took over, we had 40 people. Today we have 200 people. We will be very happy to work with Cadbury or any other client as long as they value our services but there is no specific plan of going back to client A, B or C. If your offering is good, clients find out about you. You don’t have to be in that game of exaggerating that I have got Rs 2,000 crore of billing or Rs 1000 crore. We pitch very little but and when we pitch, we always win because word of mouth spreads. We may not have the world’s most famous clients and therefore we are not in the headlines, but we are very comfortable.
What has been the percentage rise in billing in the last three years?
I cannot share the figures as we are a UK-listed company, but in the last three years, we have had an 800% growth in revenue, which is spectacular. We cut down losses in 2009. We will be quite profitable from this year onwards. By next year, we will be at the industry level profit margin. I am very clear that our margins and profitability are higher than that of the industry because our product is premium so we should be able to charge a premium for it. We had a backlog, accumulated from 2008, which we fortunately cleared by 2010.
Did you go into why the whole situation was the way it was when you joined? How will you make sure that it doesn’t happen again?
I have spent less time on post mortem and more on planning because it is a huge challenge, and the focus is on the future. I don’t think the group had the right people, they didn’t invest enough to get the right talent. But my specialisation has been turn-around. I have turned around SSC&B Lintas, Initiative Media, Lintas Madras and so on. So the challenge to me was that it was in such bad shape. Now, we have set up a solidly growing professional organisation, so chances of it happening again are miniscule. We are over-cautious.
Do you prefer education or experience when it comes to picking talent?
Usually a combination of both. Even more than these two things, I look for attitude, because in our business, people don’t realise how resilient you have to be. We want people who have got passion. Passion is infectious. That you can’t train people for or inculcate. Of course you need skillsets, you need experience, but one thing you can’t change easily is attitude. If you look at the people who report to me, they are a group of friends. Most of these people have worked with each other and with me for close to 20 years. When you spend a lot of time and get to know each other’s weaknesses and strengths, you become a team. That’s key for us.
As a consumer, which vehicle of the media reaches out to you the most?
Outdoor and news channels. I am a very avid news watcher and newspaper reader. Then I travel a lot, so outdoor advertising gets to me.
Feedback: srabana@exchange4media.com
