Ogilvy Worldwide’s CEO Miles Young tells Noor Fathima Warsia that the next frontier of growth for the agency is our capital city.
What is India’s advertising hub on the lines of what New York is to the United States and London to the United Kingdom? The obvious answer is Mumbai, but for some global leaders, the answer is not so apparent. Changing dynamics of markets such as Delhi and Bangalore are seeing marketers restack their markets of priority, and in the process, new advertising centres may be emerging. At present, Delhi seems to be receiving more than its usual share of attention. And it is here that IMPACT caught up with Ogilvy Worldwide’s CEO Miles Young, as he made a Delhi-only visit.
For Ogilvy India, the next few months will see the agency’s Executive Chairman Piyush Pandey and the NCDs Abhijit Avasthi and Rajiv Rao work with the Delhi management a lot more closely than they have in the past – the objective is to grow the creative output and the market share of the agency in Delhi, which Ogilvy terms as the next frontier of growth for the agency. In a candid conversation, Young speaks further on the reasons why Delhi and Bangalore have become this important in conversations on creativity and communication. Excerpts from our conversation with Young:
Mumbai is, and has been, an important market for advertising in India. And Delhi has been growing for a while too. Bangalore is an important digital market already. From an India viewpoint, how is this contributing to the overall India growth story?
When we look at India now, there’s a very local point, which is Mumbai, and then there are two global points - Delhi and Bangalore. We see Delhi playing corporate headquarters for many global multinationals. The trend seems to be that if MNCs are important, you have to be in Delhi. And while the minority in Mumbai is disproportionately important, particularly to companies like us, it does not mitigate the trend. Delhi is close to the government. Many companies are here for the same reason, just as they are in Beijing as opposed to Shanghai. Most of these companies need to be here because they need to be aware of what is going on in the political debates.
The third element in the triad is Bangalore. Bangalore is not just a digital, but a strong global hub for us. We are creating a huge amount of global work out of Bangalore, for clients such as Unilever, Lenovo, IBM and SC Johnson now. This is work happening in India, but for the rest of the world, and hence globalising India in a different way. We are developing marketing programmes for countries in Africa, but it is being created in Bangalore. Because of the Bangalore hub, in a sense, India is directly a part of our GBM, the structure that manages our global clients.
The last time we spoke, digital was big on Ogilvy India’s to-do list. How has the progress been on that?
There has been progress to a degree, but not enough. But that is more of a market problem. I have met quite a few clients here, and while they embrace the concept of digital, the money is not on the table. This is extraordinary because there is no other country in the world, where clients are so reluctant to recognise the absolute importance of digital. If consumers are spending time on digital platforms and if this time is growing, clients also need to evaluate this medium seriously. If you compare the development of India with China, there are areas of strengths and weaknesses but there isn’t a huge gap in any aspect. This is because India has developed so rapidly. But in digital communication, the gap is massive. I don’t understand it - there is a lag in India and it is not a consumer lag, especially when young consumers in India have adopted digital probably quicker than some of the other markets. India is the biggest market for some of the social media platforms already. Clearly, there is a marketer lag here, which I think is at its worst in Mumbai. In attitudinal terms, Mumbai is yet a TV-dominated advertising market.
Could it also be because TV and in fact other traditional media are still growing in India?
They are still growing in China as well. There is a whole different degree of growth in that market. But the opportunity here is that maybe global clients would help lead this digital shift. In fact, markets such as Delhi will have an important role to play too. At present, the same global clients here in Delhi, who are sitting in other key markets too, set targets on what their global spends on digital would be. In India, average digital spend is much lower for these same clients. We are talking numbers like 2% for some clients in India, when outside it is 15-20% for those same companies. Delhi is still early in the development stage as a market - Public Relations is undeveloped in Delhi, it is informal. If you went to Canberra or Beijing or Washington, there is a very different PR system there as capital cities. There is potential for a second generation PR system in Delhi, and similarly for digital. Ogilvy Delhi has its own digital team. The training of people has already begun here, and we are hiring. Part of my discussion with Sanjay (Thapar) is how we can fast-track digital in Delhi.
Would you agree, though, that the creative output from Delhi is below par compared to Mumbai?
As a creative market, Mumbai is at a higher level than Delhi, and we reflect that ourselves. But the reasons are obvious – Mumbai has been the centre of Indian advertising, it is linked to Bollywood in a way, film production skills are there and also the localness of the clientbase has encouraged creativity and out-of-the-box thinking. A client like Cadbury is a great example of that. It behaves more like a local client that has put a premium on insights and local engagement through creativity. All this has contributed to the growth of creativity in that market, and the likes of Piyush Pandey have pushed Mumbai to bring it to global standards of creative excellence.
But a comparison may not be fair for a number of reasons. Delhi has not had the same adrenaline in the past. To me, it is the next frontier. Part of the reason for coming here was to evangelise this message. Piyush is here too and he and the NCDs will spend more time here. We are very happy with the creative department in Delhi, but we need to raise expectations. There was a time when Mumbai’s expectations also had to be raised, which is what Piyush did. And now is the next step, when we open Delhi to this divine discontent. Delhi needs to be put on the global creative map. It cannot think how it can be more like Mumbai – it has to look outside of India, directly to the rest of the world, and not through Mumbai – it has to make this psychological break.
Do you think Delhi is making this psychological break?
We have only just asked them now, so I hope they do. They have to start thinking about what is happening in Singapore, New York, London, and how to win at Cannes, not just at GoaFest.
There are at least six big global agencies, including Ogilvy, that are doing well in Delhi. Some of the biggest clients are here, but we still don’t see as much great creative work coming from here.
Most global agencies are headquartered in Mumbai, so the mindset is formed through the lens of being there. I am not sure that Delhi is top of the list for people, who sit behind desks in Mumbai and prioritise from there. That is another reason why I applaud Piyush, because it was his idea to spend more time in this market. It may have felt a bit like a placid reservation in Delhi, but we have got to turn it into exciting rugby, or cricket, pitch. And that is what Ogilvy would be doing.
Have you set any targets for your people – changes you want to see by this time, next year?
I don’t believe in those kinds of targets, because they are rhetorical in a manner and you cannot make anyone accountable like that. In Delhi for instance, we know that there is a big gap between us, and perhaps a JWT, so there have to be some targets. But no matter how we grow, at the core, it is still about creativity. The target also includes digital penetration and market share, but these are realistic targets. We are not going for quantity at any cost. It has to be a quality growth – and it would take some time for the industry on the whole to evolve. The one opportunity that Delhi has is that it might be more open to new ways of working – 360-degree here is a big opportunity. Wherever you have government, social media tends to grow and PR has opportunities. The kind of clients that we are speaking about have some drive to explore the new communication world, so it need not be as TV-dominated as Mumbai is – that is an opportunity for the market as a whole in Delhi.
Perhaps not the best question, but conversations about slowdown keep cropping up. What has been your experience so far?
We are in a strange period right now because around the world, there are positive feelings. To be honest, we have not seen any slowdown in the US or in Asia. We have seen some bit in the UK, France and Germany and when you look at the debt problem in Europe, there is a huge element of risk there. There is a sense of fear, but we don’t know what we are fearful about. The way Sir Martin Sorrell puts it, caution is the new order. And I would say caution with a mild dose of paranoia would be our approach. This year, we have globally grown 6-7%, and we have grown in market share too, so it has been a very good year. But we would not be too optimistic when we go into our budgets next year. We would not take too many risks. In India, you are seeing some amount of slowdown, in some of the sectors like insurance and automobiles. I don’t think it would be that severe, yet you couldn’t look at next year, and say we will just sail on – it would be a nerve-wracking time. I don’t think there is any reason to panic, but a bit of healthy paranoia is not bad.