Optimism is a fine thing. It inspires some marketers and ad men to discover the silver lining in a slowdown, which they see as an opportunity to improve fiscal discipline and organizational efficiencies and take sharper strategic decisions. It inspires a global ad chief to get “excited” rather than nervous about the meltdown, since it pushes his network to pare costs and leverage scale to help clients. It also encourages the network to think about seeding new companies, entering new markets or winning new clients.
Do our own ad chiefs like anything at all about the slowdown? Well, it’s definitely inspiring some of them to axe dead wood or non-producing assets, units and staff—just as top guns are doing across sectors. Some see this as an opportunity to exchange mediocre talent for higher calibre talent at a reasonable cost. Others are thankful that the insanely high salaries of yore have settled to more reasonable levels. And many say they won’t stop strategic investments to achieve their business goals.
Ranjan Kapur, country manager, India, WPP Group Plc., says that a lot of slack has built up over the past five years, the golden years in Indian advertising’s history. This is a nice time to pull in the reins, he says.
Not everyone is wary about putting money into new ventures. Several ad chiefs say they will start new revenue streams or acquire companies in fast-growing media areas. Colvyn Harris, CEO, JWT India, tells me they’ve always been very balanced in their approach to expenditure and are still open to acquisitions, particularly in digital and brand activation businesses. Acquisitions help the cause of growth, and valuations are much more sensible now, he says.
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Sharp fiscal discipline is clearly on everyone’s radar. Piyush Pandey, executive chairman and national creative director, Ogilvy and Mather (India) Pvt. Ltd, says the agency is looking to improve cost efficiencies in processes and cutting ancillary expenses such as travel costs. Meanwhile, merger and acquisition dialogues continue. There is a definite revenue opportunity in digital communications and a slowdown would generally accelerate the process of getting new business streams, Pandey says.
The obvious motto is, grow your client’s business to grow your own. M.G. Parameswaran, executive director and CEO, Draftfcb+Ulka Advertising Pvt. Ltd, thinks a downturn is the right time to focus on “how to add value” to the client’s business.
“For one client who is focused on international business, we understood that they have figured out that the time to grow (the) India business was now, and we are working on cost-effective ways of generating leads for them.” This is also a good time to focus energies on evaluating internal talent strength and taking steps to improve it. And it is also the right time to get systems and processes in order. So a thorough systems audit is in place, Parameswaran says.
Madhukar Kamath, managing director and CEO, Mudra Group, sees the slowdown as a great opportunity to review every single business of the group. For starters, he hasn’t pulled back on investments to achieve set goals and Mudra has hired senior executives in the past few months. Even amid a slowdown, he has been seeding new units such as Terra for integrated rural solutions, among others, he says.
Kamath is also taking a second look at business costs and process efficiencies for every single business. This includes automation of business: To speed up delivery on one business, for example, they put in large-format scanners. They will also look at the forced attrition of lower performers. His goal: “By 1 April, we will be a tighter organization with relatively less people working for more clients.”
Most ad chiefs are looking to push for closer collaboration across units and member companies to provide seamless integrated solutions.
Kamath, for one, has a senior person in place heading Mudra’s integration and strategic initiatives, and a new matrix system of functioning, which offers reporting by function and geography and aspires for more accountability. The aim is to offer fresh and total solutions to the client. So what’s there to like about a slowdown? Plenty, it seems.
Marion Arathoon is Mint’s advertising editor. Your comments are welcome at email@example.com