Mumbai: Over 25 years in the Indian advertising industry and a bypass surgery later, Sam Balsara , chairman and managing director of Madison World, the largest independent media company in the country, says why he’s not ready to hang his boots yet. In an interview, he talks about his experience working in partnership with a formidable competitor and why he isn’t ready to sell Madison World, which celebrated its silver jubilee this year and rakes in gross billings of Rs3,000 crore. Edited excerpts:
You are considered the most influential person in the advertising industry. What makes you that person?
It’s a bit difficult for me to say. The label has been given by newspapers to keep their columns busy as people like reading about people. These are just clever devices to make newspapers more readable and attractive. I don’t take them too seriously... But who am I to question it?
You are in partnership with a formidable competitor, the WPP Group. How has the relationship worked out? (Madison owns a 51% stake and WPP the remaining 49% in media buying and planning company Mediacom.)
Today’s business world is complex. It is no longer the simple environment it used to be. To succeed in today’s world you have to collaborate with some, you have got to cooperate with some. We are learning that it’s pretty important to figure out ways and means of doing this. The old simple model where “you owned everything and controlled everything” doesn’t necessarily work. The experience with WPP and Mediacom has been very good. Mediacom has in a short span of five years established itself very well and I think, if I may say so, both the shareholders are very happy with Mediacom’s performance.
You could have sold stake in Madison a long time ago. What is it that excites you about being India’s biggest independent media agency?
It is certainly challenging and certainly trying, and I wouldn’t say that it’s an easy or comfortable ride. But we didn’t create Madison so that I could sell it or take it easy. I created it as a company that I could be proud of, a company that I could be happy working in. And I don’t think my working life is over. I’m not one of those people who say I will hang my boots when I turn 40 or 50. That’s not part of my persona.
As I was telling someone the other day, I don’t recall taking long holidays. Now, 25 years later, if there is no Madison what else would I do? I know it is never too late to start something new. I believe my friend Captain C.P. Krishnan Nair at The Leela started his first hotel at 62. But I guess this is my life. Madison is my life. I’ve invested time and money over the years. Today, our total gross billings would be at Rs.3,000 crore, we’re about 1,000 people and we operate in nine functional areas, one of which is media. We are, of course, mainly in India, but also in Sri Lanka and Thailand.
There were rumours that you were in talks with WPP Group or Dentsu for a stake sale.
We have maintained that whilst we are not open to a sell-out and exit the business, we are open to a collaboration and a joint venture. We said this 15 years ago, so what I’m saying is nothing new. If there is a proposal that can make Madison stronger, we are open to it. The one strength that a collaborator can provide is a window to the world. All said and done, our view is restricted to India. It’s a large, wide and a broad view, but nevertheless it’s India. To get learnings from other markets which are ahead of the curve and bring them to bear here is possibly the only major reason we would look at a collaboration. That is fundamental to take the group to the next level.
Everyone talks about media buying. Is the planner extinct?
Not at all. Media planning is growing a lot more in importance. Media buying is also important, but in today’s fragmented world with so much media proliferation—600 television channels and hundreds of digital media options—planning has become even more important. So I wouldn’t agree with you there. Of course, media buying is also important. As the competitive environment in which our clients operate intensifies and as clients’ margins come under pressure, they are under pressure to save every penny they can and that is where media buying gains in importance.
Ad rates on television have been stagnant, a pet peeve for media companies.
I have a view on this. My friends in the media make the mistake of assuming that the media industry is not growing because media rates are not increasing. This is not a correct perspective. Advertising budgets are not decided on media rates. Advertising budgets are by and large decided by brand sales and targets, and company sales and targets. So the key determinant of making the advertising market grow is that you need to make the return on advertiser’s investment grow. If we can make that happen, the advertising market will double and triple in the foreseeable future. You can’t make the advertising market grow just by increasing rates. It may work temporarily.
But eventually, if advertisers don’t see a return on their investment, they are going to cut their advertising budget. That is determined essentially by the volume of sales.
If not an advertising guy, what would you be?
(After a long pause) If you had asked me that question in the 1960s I would have said a chartered accountant, if you had asked me in the 1970s I would have said a marketing person. But since the ’80s it has been advertising.
Frankly, I haven’t thought of it. I’m not that kind of person who evaluates his options in that fundamental a manner. I evaluate options within the chartered territory. I haven’t thought of approaching the BMC (Brihanmumbai Municipal Corporation) to build a bridge or hotel.
What advice would you offer Lara (his daughter Lara Balsara, director, Madison World)?
I think you have to take calculated risks. You can take stupid risks and rash risks. (But) as long as you have evaluated the risk, examined the downside as well as the upside, and get in with your eyes open, then you should be fine. Especially in a growing economy like India.
What is the one brand that has been closest to your heart?
There are two. First, the launch of Cinthol Lime, because it happened within the first year of Madison. I was intimately involved in the entire process and it was a roaring success. The second would be Procter and Gamble, because they were the ones who I would credit for discovering our media strength. They were the first to appoint a media AOR (agency on record). They chose us from among four agencies because they believed that we had something that their other agencies, who were possibly more focused on creative, did not offer them. I guess, of course, subsequently there have been many, many stories, but these are among the oldest stories which are close to my heart.