BackLaurence J Boschetto | We are open to acquisitions in India
Laurence J Boschetto | We are open to acquisitions in India
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Laurence J. Boschetto, chief executive of Interpublic Group-owned Draftfcb Inc, expects television to continue to attract the bulk of advertisement spending, contrary to popular perception that the Internet and social media will soon take over the top spot.
New York-based Boschetto, who was in India to to kick off the golden jubilee celebrations of its local unit Draftfcb+Ulka Advertising Pvt. Ltd, is looking at potential acquisitions in the country as part of a global plan to double the size of the company. Edited excerpts from the interview:
The cricket season has begun and it is a huge media property for India. What are the big media properties in the US?
We have the Super Bowl. That is the largest athletic event. The Super Bowl is probably equivalent to cricket here. A 30 second ad spot on Super Bowl costs $3 million. It is the largest televised event which gets the greatest number of eyeballs. And people watch it not just for the game, but equally because it is the venue to premiere all new creatives. They watch it as much for the advertising as for the game.
But then we also have major awards shows, Academy, Grammy, People’s Choice awards, the Golden Globe awards… these are the major promotional entertainment and arts events. Huge advertising money goes into these.
But isn’t above-the-line or and below-the-line advertising moving to digital media?
No. In 2007, Advertising Age declared television is dead. Television is alive and vibrant and growing faster in every country, especially the emerging countries, than any other channel or discipline.
When they talk about growth, they talk in terms of percentage. So, from 0 to 10% you have grown 10 times. So, is digital growing? Of course, it is growing. Is social media growing, of course it is. But it is not replacing television, the area that is getting hurt is print. In the US, television is still number one. The UK is the fastest growing digital market. It is nearly 30% of all spends. In the US, digital is 18%. In South Africa, it is less than that.
Have advertising growth rates in the US improved post recession?
In 2008-2009, advertising was down about 8%. Last year, it grew by 3%. In 2011, advertising industry is supposed to grow at 6-7%. So if we take the rolling average for the past three years, it is now flat. It is very much the same as it was pre-August 2008 when the floor fell.
In earlier interviews to Indian media you have said that DraftfCb +Ulka is among the top five or top three agencies here. But the ranking is not audited by any independent agency. Could you share its revenue figures?
We do not share numbers. But to do a relevant ranking, we take a look at our clients, their spends and media. We also take a look at our competitors, their local business, the composition of their global business and their media spends. When we talk about being among the top three or the top five, it is all of Draftfcb and its properties rolled up.
So is Draftfcb+Ulka profitable?
When the rest of the world faltered and went down and the industry as a whole was down by 8%, we, as a network, were up 10%, and our Indian market was no different. They pretty much stayed true to form on year-on-year growth. They did not grow as much in 2008 and 2009, but they were still positive and very profitable. I attribute that to the fact that they have got long-withstanding relationships with their clients (Hero Honda, Amul, Zodiac, Castrol).
They come at their businesses from a strategic sensibility, and the ideas are nothing but solutions to address those business needs. Whereas other companies may come at it from a pure ideation point of view not necessarily found in consumer insights and data analytics.
So you believe in market research?
That is the cornerstone of our go-to-market proposition. To us it is all about the balance in accountability and creativity. Customer intelligence is the cornerstone of every programme we do—who is the customer, what is his behavioural understanding, what does data and analytics tell us and how do we let that out through quantitative research that is measurable and projectable. That, then, springboards into writing the strategic brief. We look at statistical accuracy, especially since today clients are looking at greater efficiency and effectiveness as a procurement. So one of the things they are asking is how do I know you are going to get it right the first time.
What is the way forward for your India operations. Are you looking at organic or inorganic growth?
It’s never one or the other. It starts with the basic question—who are we in India, what do we represent and who are the organic fits for us. We need to be open to certain acquisitions. We are migrating into a highly digital world.
We need to make sure that we are bringing in talent that lives in that new world, is savvy and is fluent in that language. If that means bringing in talent or finding an organisation that is fit for us, I am open to both. Last February, I had my entire lead team in New York where I asked how do we double the size of our organization in the next four years. Two days ago, we were in Mumbai, discussing the potential acquisitions in the market.
We are going through the business rigour and discipline to get us to that point.
In India, top talent from large agencies is quitting to launch their own businesses.
There is always movement. In today’s day and age, there is a sense of nimbleness and speed-to-market urgency that you must have. Smaller agencies are bit more liberated to offer that.
The problem is that they do not have the band strength of talent to draw from. When I look at Draftfcb, I look at local managers and say I don’t run your business, you run it. You need to be as nimble and fluid as a small shop down the street.
Any recent ad you think your agency should have made?
The Super Bowl ad for Chrysler. It said “Imported from Detroit". It introduced the new Chrysler model. You must keep in mind that the car industry was severely hit in Detroit and Detroit was going through deterioration as a city. The spot made you feel proud of Detorit and Chrysler and I felt I would have liked to have done that one. It was done by Wieden+Kennedy. But don’t give them credit (laughs).
What do you do when you are free?
I like to read and I like to exercise. When I turned 50 years old, I bought myself a baby grand piano. I put it in my living room. I have this 80 year-old women who comes to my house every Saturday morning to teach me. The saddest thing is my next door neighbour asked if I had adopted a kid. I asked why. “We keep hearing the same pounding on the piano over and over and over again," he said.
shuchi.b@livemint.com
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