The Hindu Business Line : `Branding has moved to the boardroom'

IT'S a languorous morning at the idyllic Taj Malabar hotel in Kochi. The kind of morning where you would like to knock back a couple, put up your feet and watch small tourist boats to mid-sized steamers and large ships serenely chug by through the great backwaters that's cheek by jowl with the Taj. But Shelly Lazarus, CEO and Chairman of advertising powerhouse Ogilvy & Mather Worldwide, has other things to do this morning apart from taking in the picturesque sights that God's Own Country has to offer. Over 150 senior executives of O&M from 16 countries in Asia-Pacific have descended on Kochi for the agency's bi-annual regional conference.

Lazarus, who's flown into India from Davos, where she attended the World Economic Forum, is busy taking in the internal presentations being made by a cross-section of O&M executives, including one by O&M India's Executive Chairman and its top creative honcho, Piyush Pandey. Between meetings, appointments and lunch, Lazarus spoke to Catalyst at length at the Malabar's coffee shop made to look like a `kettu vellam' right on the backwaters. The languid setting ensured that Lazarus, who has spent almost three decades at O&M, was relaxed enough to speak on a wide breadth of issues confronting O&M, on 360-degree branding, the agency's backbone, and on the main trends in advertising. John Goodman, CEO, India and South Asia, O&M, sat in on the interview as well. Excerpts from a 45-minute exclusive interview:

You came to India from the WEF; what's the feeling about India at Davos?

There's great optimism about India and a lot of conversation about its outsourcing skills; there's a great sense of the potential. I was telling some Ogilvy people here that when people got depressed talking about world issues, they would say, "Let's talk about Asia," and invariably, it veers towards India and China and what they represent for the future.

Where does Ogilvy India figure in the scheme of things? You've referred to it as one of the stars of the network.

The work that's coming out of Ogilvy India is outstanding; people are paying attention to it all over the world. It inspires people all over the network. I remember getting a phone call from the President of Cannes and he said we should have a president from Asia and the obvious candidate is Piyush Pandey because of the work he's done, the awards he's won — we saw it this morning when Piyush did a presentation; charm and delight can't describe the reaction of our jaded audience to the work that Piyush does, it's just the best.

O&M has been a strong proponent of 360-degree branding. How effective has it been for your clients?

I can't assess varying degrees of effectiveness, but Steve Hayden (O&M's Vice Chairman) just showed the new work for Dove that's being shown all over the world. It's had a remarkable effect on brand sales; it's a campaign for real beauty. It's all about celebrating women as they are rather than the stereotypes they are portrayed as so often. The campaign goes everywhere. There's a huge PR component too; when the ads broke in London, one of the models was featured in the Time magazine, with a whole article about how these models were chosen. People were invited to a Web site where women can talk to each other and exchange views. They've set up a fund for young women, to help communicate to them that however they are it's beautiful enough, they don't have to aspire to have flawless skin or long blonde hair ... so it goes all the way and they've had a surge in sales. IBM is a huge success when that brand turned around. American Express, Kodak, Motorola, they're all examples of successful branding.

With the emergence of specialist `brand consultants,' agencies are perhaps not the brand stewards that they would like to be. How do agencies resolve this? Do brand consultants pose a threat to pure-play advertising agencies?

We have a different point of view; our view is that when you bring people of different experiences and specialisations and when they come together and think about a brand, the solution is much better than ideas in bits and pieces. So far, we're doing well.

Are clients buying into it, the 360-degree branding concept?

CEOs buy it. When you get to the CEO, he usually wants solutions; he doesn't want 15 different people calling on him, giving him different piece parts. Usually we are called in when the CEO wants to transform the brand, which is a large admission they don't think in terms of PR and media. He wants people to figure out what to do. We get these large global assignments because we can execute them the 360-degree way.

What is the one significant trend that you see in advertising across the world?

It's almost expected now that an agency will bring a solution that is not just advertising. It's happening everywhere and even though they may not eventually do it, they want to be stimulated by it and I see that happening in more countries. Every thing is getting more textured and complex and I think it makes us better, our jobs more interesting and I think it intrigues clients too — they are more involved in seeing all the pieces. Earlier, advertising used to come into the marketing department, but now it's broader. We are now presenting to the boards of directors as the first presentation because they want to see what's happening with the brand.

Are WPP-owned agencies in the country working without any disconnect?

Martin Sorrel (WPP's Chairman) calls it the kiss and punch strategy. So we compete for the same accounts and often compete in the same businesses. The real strength of WPP is that it has these strong operating companies in its fold.

Do you see India emerging as a BPO to the rest of the advertising world? What is O&M planning to do about utilising Indian skills in India to service the world?

Once you start to think globally, any place can be a resource for a creative idea. We have had various countries in the world where a creative idea originates. I can't think of a creative idea that starts as a global idea, it usually starts in some country and then you look at it and say that it can be adapted and has relevance everywhere and then it starts to migrate. We don't start from the beginning and say we will source this idea out of India. But one thing we are indeed doing is that since everything is electronic now we are seeing if we can use India as a studio for the world, outsourcing certain things which India can do more efficiently. The problem is emotional, even though it's electronic, and creative people are more comfortable if they can grab someone by the collar and say, `Where's my work?' We keep thinking about it and I'm not giving up on it.

What kind of work will be outsourced?

Creative work is a very intimate endeavour. So, I think it's more on the production side, getting materials ready. There's a lot of studio and production work which is huge. We did start on it, but didn't get any scale. We did some work with IBM — we adapted the software needed for reproduction in Europe; we just want to be absolutely sure that clients are comfortable and it's reliable and nobody feels loss of control.

O&M India has created some memorable advertising in recent times. Especially the Hutch boy and dog ad. Would the Hutch creative be used elsewhere?

I ran into the new CEO for Orange in the UK at Davos... he hadn't seen it, but there's no reason why that symbolism can't work anywhere. Soon as I get back I'm going to send him a show-reel.

How equipped are ad agencies today to handle emerging new media and technologies which demand different skill sets altogether?

We are, because it's a part of our philosophy; being able to execute brands 360 degrees, we've made a practice of it from the very start. We were into interactive space even before the Internet. We just had a belief that interactivity was the goal and even that time there were very clunky and unsophisticated ways of interacting. We had a person, who heads New York Times' digital media now — he worked for years leading the thinking on interactive. We had Ogilvy One, which was Direct at the time, which was engaged in the new ways of direct marketing to individual consumers. We were ahead of the game. And once you get into the mode of understanding new technology and applying it, as new technologies come along, it's natural for us to see how we can use it. In Japan, mOgilvy helped us all understand how to use the mobile as an advertising medium.

But, what about brands in the Net space, brands like Google, which come up from nowhere and become a big brand? Is there a strategy to tap that? How do you build brands which exist purely in the Net space?

You build it the same way that all brands are built. Each one is idiosyncratic. You have to figure out where the audience is. But, I've worked on my share of Net brands which didn't get big till they advertised on television. Ameritrade, which is a big online trading brand in the US, is a great example for me, which came out of nowhere to compete with Schwab and the likes. But, the conventional wisdom at the time was that it's the perfect model. By definition, it's online and interactive, so why bother to go to any other media that's outside the Net space, because it's so efficient. So we did all this Net advertising to bring people to Ameritrade, and then we all sat back and said that if we wanted large volumes, we needed to go to mass media that attract more people. We had the founder's blessings and went mass media and then it boomed, and then we went on to discover time and again that if you want large volumes and you really want to drive people, nothing drives people to a Web site like television.

So, you mean the dot.com ad spend will come back?

That's for sure ... but the fact is that even if you're selling Net brands, don't assume that you should have a totally Internet ad strategy, because it doesn't give you the volumes. I think Net advertising is definitely back and I was not popular at the time when the dotcom boom was on because I said that one day it will be an enormous advertising medium. But right now we don't know how to use it as a medium. I kept saying that it's the interactivity of it which makes it so powerful. It's only now that we know how to use it as an advertising medium. We're ready for it, we have a separate division, mOgilvy, which works on new media.

Corporates today are more quarterly billing-driven; they are keeping an eye cocked on the stock market and living for the short-term quarter. Does this scenario help agencies retain their focus, and do companies take a long-term view of brands?

That is true, they have to make quarterly projections, but the real difference now and say three to five years ago is that clients are really coming to understand what a remarkable valuable asset a brand is and this is not something you stint on; it's something that drives your enterprise and is not something that is nice to do. There was a time when you had enough money, you would pop out some corporate messages on the brand, but now it's gone to the centre of what they do because it's not just advertising, it doesn't require a huge incremental discretionary budget. I would say brand building is all about the product, the nature of the packaging, how it's distributed, what the sales force is like, what the showrooms are like. We tell our clients that as long as you're paying for the packaging it might as well reflect the brand. We've been working with Coca Cola on vending machines; that's a great billboard, their delivery trucks. Those are moving billboards, now if that's the philosophy of the company, then the brand is not the thing you do when you have money left over; the brand drives everything that you do as a company.

Though O&M believes strongly in the fee structure, the bulk of Indian advertising is tilted towards the commission system. Do clients favour the fee system; are they getting to be more comfortable with it?

John Goodman intervenes: There's a move towards fee and I can say that now 50 per cent of our revenues is fees. Personally, I prefer moving to fees as I think it's a sensible way to build a relationship with a client when we're not totally dependent on what they have to put in mass media. It also helps the 360 degree offer because we can assemble what's needed rather than being driven by getting something on TV. The trend has been in India to move towards fees. It's a sensible way to get reimbursed for the work you do.

There was the recent case of ex-Ogilvy executives going on trial on a charge by the Federal Government. Would that be a negative against the fee system?

One of the issues of hourly-based billing is you have to spend a lot of time being very vigilant on our side; the one thing that preceded this trial is that we were scrubbed clean as a company and we were found to be clean, there was no question of wilful deceit. In the agency business, we're not great at time sheets. Lawyers live by it; because we've come off a commission system, I think it was just some sloppiness but it raises an issue not so much of people being honest but the discipline you need.

The Federal Government has extremely strict rules to fill time sheets. We had a limited amount of timesheets filled out, not to Government standards; rather than negotiating on it, we just told them that we will take it off the table and that we didn't want to be paid for it. We admitted it was our mistake.

So, are there adequate safeguards now?

(Laughs heartily) We paid PricewaterhouseCoopers $1 million to teach the New York office how to fill out timesheets. We know now better than any other organisation how to fill out timesheets!

What kind of talent would O&M seek from other professions like marketing or hospitality to bring into the talent pool at O&M. Like many software companies seek out "domain expertise" of pros from other industry, would O&M look for that?

We are open-minded about who can come into advertising. We just want curious, talented people. They can come from anywhere. David Ogilvy once said that advertising is a wonderful business because anything trains you for it. We have an ex-chef and an ex-jailor working in our creative department in Mumbai. We have professors of art history, of comparative history. In China, we have a few doctors. It's very open, and that's why we are so creative; this allows us to come up with interesting solutions for clients because these people come with no pre-conceived notions of how you do things.

How will the P&G-Gillette merger impact O&M?

I don't know, it's too early to say. WPP is acquiring Grey and they are a big P&G agency. We do Duracell, but we have more local assignments. For the moment, I don't see any major fallout on O&M. As businesses are consolidating, you find that clients don't ask us to maintain exclusivity by company, it's almost impossible, they ask us to maintain exclusivity by category, and so if it's okay with other clients that we handled Gillette before Procter acquired Gillette, I don't see any of our clients having a problem with that.

Do clients follow all your recommendations in your 360 degree branding strategy?

They never implement it all — once you get a group of people who are thinking about ideas, they go so far that no one can implement everything; so we make it as rich as we possibly can and clients can pick what they choose to do. Also, Ogilvy doesn't have to execute everything because very often clients have pre-existing relationships and we don't have any problems working with these companies. The important thing is the central brand idea.

What was the genesis of the 360-degree branding?

The first step of starting Ogilvy Direct eventually led to 360-degree branding. David Ogilvy was talking about brands way back in 1955. When we started Ogilvy Direct in the late '60s, it was really to help American Express, and they asked us to write a letter for them which they wanted to send to people inviting them to apply for the card. The fulfilment was such that the secretary to the VP of marketing of Amex saw her desk overflowing with applications; then they asked us to help handle the fulfilment and when we finished with it, Ogilvy Direct had been born, and we realised that there's a direct marketing dimension to many advertising campaigns. Once you went to a second discipline, it was easy, so if we could put the two together you could put the same idea in the one-to-one communications. Both were so much stronger. Then we moved that to PR and then it builds on itself, and then suddenly you have a philosophy of touching a consumer at various touchpoints with a brand and then our business plan writes itself out. Then we say if there's value to clients in helping them interpret the brand at each touchpoint, we should start a company that helps them do just that.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Price pyrotechnics

Dead man selling!

A profile of the rural consumer

`Branding has moved to the boardroom'

Mr Speed

Direct to consumer

Enter the corporate brand

The easiest thing is to go with a trusted brand