Digital is growing at a very fast pace in India but the base is quite small compared to other markets
Television is not TV anymore; it has become video. People are consuming video content through multiple screens
New Delhi: Stephen Allan, media industry veteran and worldwide chief executive of WPP’s agency Mediacom, was in India recently to meet senior leadership and key clients. With $2.7 billion worth of new business won in 2018, Mediacom managed to bag 20 brands in India last year including Chinese handset maker Vivo, its biggest account in the country. “India is certainly in a different position than many other markets and that is because country’s economy is growing furiously," he said. With over three decades in the media industry in his pocket, Allan has been heading Mediacom globally since 2008. In an interview, he talks about agency’s growth areas, millennials’ obsession with digital videos and why Facebook is not a competition for the agency. Edited excerpts:
There are two things that will drive growth -- our existing clients growing their businesses which will throw up opportunities for new assignments along with increased investments. Winning new clients will drive this growth further. Last year, in India, we won many local clients including a big account of Chinese handset maker Vivo. Mediacom India was also an important partner in helping us win global business including Mars, Adidas-Reebok and Hilton.
In 2019, India’s GDP growth is expected to be around 8-9% which we don’t see in other large markets. We expect media investment to grow by 13%. There’s an enormous population here, with many who have not entered consumer economy yet especially in rural areas. Therefore, I’m extremely bullish and optimistic about India.
Do you think digital media is becoming profitable?
In India, last year, just under one-third of our clients’ money we invested in digital media, which is double the national average (15%). The national average is low when compared to other markets such as UK where it stands at 51%. Meanwhile, Mediacom, as a firm, is growing at 30%; so we are ahead of the curve.
Digital is growing at a very fast pace in India but the base is quite small compared to other markets. India has over 300 million smartphone users with consumers spending an average of three and a half hours watching television and over three on their smartphones. The interesting twist to this is often the two are happening at the same time.
Television continues to be a strong medium in India. Do you see that changing?
In the short term - No. Television is still growing and increasing its revenue so that is healthy. To be honest, globally television is still doing okay but the press has been the medium which has suffered a big deal. What makes India really different is print is still growing, its share has slightly slipped but it is still taking one in three advertising dollars. I can’t think many other markets where print advertising is still growing. Indians love their newspapers and magazines (smiles).
How can brands create more engagement online?
In digital, we focus on reach, relevance and eliciting reaction from consumers. I believe agencies and advertisers are not thinking enough about relevance of the message. We need dynamic creatives on digital which are customised for each individual, but we still see so many advertisers and agencies who take a television ad, cut it down and put it on a Facebook feed. I don’t think a young user will pay attention to it especially when he/she is looking at it with the sound turned off. As advertisers, we just have five seconds to catch his/her attention and we call it being ‘feed ready’ content which should be relevant to these users who are scrolling through social media feed constantly.
Isn’t there a squeeze in margins and increasing competition for media agencies today?
I don’t see Facebook as a competitor, rather an important partner. It can have direct relationships with brands some of which can be our clients. Facebook and Google are not service businesses; hence, they are not built to provide agency-styled solutions. I think it’s fair to say that advertisers and marketers are under pressure. In my opinion, there has been perhaps too much focus on bottomline as well as costs. I would like to see more investment in growing the topline. I believe in the power of brands. Yes, we do have more competitors than before but in all honesty, we won $2.7 billion of new business last year. So, we are doing ok.
Are there any interesting media trends that make the India market unique?
Television is not TV anymore; it has become video. People are consuming video content through multiple screens. Therefore, digital and television are actually merging especially the video streaming platforms. Brands are figuring on how to reach consumers through video either through a 30-second TV spot or a five-second long ad on YouTube or Instagram. It’s all about video and not static inventory.
With this trend, it becomes important that mix data (time spent on digital and television respectively) starts emerging so that we can plan and target customers better. Currently, it is being done on trial and error. There’s a huge debate happening in the media industry as to how we target the consumers.
Mobile is exponentially growing, leading to increase in media consumption on devices. Not just video, even news content is significantly increasing. India is also skipping a lot of cycles unlike the UK or the US where people have moved from newspapers to news websites. People in India, who have not had access to newspaper, are now consuming news on their phones.
Everything is at our fingertips now and that is why you cannot fool the consumer anymore. Consumers are getting very smart and evolved; brands need to be honest about what they stand for. They need to tell a story that is believable. The rational part of the consumer is becoming dominant.
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