Online media has to show it’s effective in building brands: Dominic Proctor
Dominic Proctor, president, GroupM Global, has been with the WPP group for the last 30 years, having spent the last three at the helm of the media agency. Proctor was in Mumbai and New Delhi to speak to the firm’s employees on the group’s future direction and plans. In an interview, he spoke on the challenges of digital media and the company’s acquisition plans. Edited excerpts:
How much media does GroupM buy globally?
We buy media for just more than $100 billion. In 2014, we went over $100 billion, so that is a big responsibility. That gives us a 31% share of the global market. In India, is it higher at 43%. By the way, the market is defined by the media that is bought by the advertising groups. That does not include those who buy direct or small, local classified. For us, it includes all our media brands—MediaCom, MEC, Mindshare and Maxus.
Which media—television, print, digital—is getting the largest revenue share globally?
It varies enormously. In some countries like the UK and Sweden, digital is the biggest media type and Google is the biggest media owner. So that is around 50% market share. In India, digital is more like 10%. Obviously, it is a slower start here because the penetration of broadband wasn’t so deep. So the move to digital has been based on mobile platforms.
As head of GroupM globally, what are the broad changes you have seen in the media landscape?
The biggest changes at the macro level have been driven by technology and by geography. All changes have taken place around digital media and the use of data. Geographically, there has been a shift in the media marketing landscape more from the north and the west to the south and the east.
The most fundamental shift has been in the use of digital media with different screens. That would be the main driver for changes to come.
What kind of digital properties and content are advertisers looking for?
The simple answer is, anything that breaks through. Digital media environments are usually quite cluttered. They suffer the same challenges as broadcast or print media; you need content and formats that really break through.
Newspapers are struggling to figure out what works online. Are advertisers coming online in India?
In India, the printed medium is still quite important and still in pretty good health, compared to countries where print is really on its knees and has lost its market to digital media. Print has declined in the US, the UK and western Europe where the growth of digital, because of broadband penetration, was quicker and deeper.
We think advertisers are coming, though there are not many examples in India yet where they have really built a brand online. So, typically, online has been used for specific targeted campaigns or as a way of repeating a message that has been established offline. The challenge for online media to take more of the money from offline is to prove the effectiveness of that media type in building brands. That is still the holy grail and still to be proven online.
Does serious stuff or long-form writing work online?
It works if it is good enough. In the end, quality counts. If there is a particular writer or columnist that absolutely meets your interest, you will stay with it. Actually, one of the challenges is for, perhaps, individual journalists and columnists to be better branded themselves so that when they change from offline to online and when their stories get spread beyond their control, you could find them wherever they are. So, actually, the parent newspaper or magazine to which they belong perhaps becomes less important as a brand, than the journalist or the columnist himself. That is an interesting paradox.
Is native advertising growing?
It is bigger, but it is still quite slow. In most parts of the world, editors are careful not to try and deceive people. It is not in anyone’s interest to try and deceive the readership. But the day the editor is trumped by the publisher, is the day the medium begins to die.
Are so many digital news brands sustainable?
They are sustainable because they give you what you want immediately. Their challenge is that their user numbers are growing much, much more than their revenue. So the eyeballs are there. The rupee is not yet following at the same rate. So the challenge for the publishers is to demonstrate that advertising that will follow will be effective.
Eyeballs are moving from television to digital media, is there a conflict?
Eyeballs are moving but there is no conflict in the sense that people don’t even make the distinction any more between TV and other screens, particularly the digital native generation. If I ask my kids what they watch, they remember the programme but not the distinction between smartphone, TV or laptop. The distinction between screens is becoming quite irrelevant.
With media incomes shrinking, how are you maximizing revenue?
Most of our revenue is from fees from clients. The commission system, though not completely, has been replaced by fees. So one way we increase our fee income is by broadening the company.
So we are building an e-commerce business. Because that is the future for many of our clients. We need e-commerce specialists to integrate them with our agencies. So we have a division being set up in India.
Another recent one in reference to India would be sports marketing. So we launched here ESP Properties. That represents both sports rights owners and entertainment rights owners to our clients and brands. That is a new activity.
The sports market is growing much faster than traditional media markets. We have seen growth in sports marketing to 15% against the general media 2-3% inflation growth. We think sports will continue to grow with major, live sporting occasions, whether in the stadiums or broadcast, being big opportunities for advertisers.
We are a big supporter and investor in the cricket league here. We just managed the biggest sponsorship deal between Paytm and BCCI. Paytm is a Maxus client but ESP Properties put the deal together. It was their first project in India. That was a good example of connecting a vibrant sports property with a brand.
Have you made global and local acquisitions in your last three years? Are you looking for more companies in India?
Most of our growth has been organic. The acquisitions we have made have been rather small in scale and important in type. Because when we invest in companies we bring in special skills. We are open to small specialist companies broadly in digital, programmatic, performance marketing and e-commerce. Companies in this space are few and far between.
Which are your high growth markets?
The scaled ones are India, and China, in spite of the gloomy news in the last month, and some Latin American markets are reasonable bets. Then there are smaller countries in Southeast Asian markets and new markets like Myanmar, Iran and Cuba.