The Hindu Business Line : `The media business is too transactional'

"Not enough have seen the true value of really smart media planners. Too much time is spent on the transactional side of the business. We add value to strategic planning," says Dominic Proctor.

Dominic Proctor, Chief Executive of MindShare, a WPP company, launched the group's operations in 1997, when the media specialists of JWT and Ogilvy & Mather merged. With over 5,000 employees and over 70 offices across the globe, MindShare is today one of the world's largest media planning and buying companies. Proctor is closely involved with the operations of Group M, the umbrella for WPP's media specialists business, covering entities such as MediaEdge, MindShare, ATG and MCI. Last week, WPP signed a $1.3-billion deal to gobble up Grey Global Group, which will bring Grey's media business MediaCom under the Group M banner.

Proctor expects fast-growing economies such as China and India to influence the worldwide media business activity in the days to come. In an interview to Catalyst, Proctor talks about the media business in the country, the need for new media vehicles outside traditional platforms of print and television for the benefit of clients, besides responding to unsettling fears among rivals and media house owners about Group M's increasingly menacing size. "We certainly want our clients to enjoy the best prices. But we want to develop new opportunities with media owners. We fully expect the media owners to consolidate more and more. So that we can meet strength with strength," Proctor says. Excerpts:

You had forecasted, almost 18 months earlier, that the "overall balance of worldwide media business activity is shifting towards China, India and other developing markets." How significant is the shift, and what is the update on it?

It is not a dramatic change, these things happen gradually. We see growth in India's media rates and prices (media inflation) at 15 per cent year on year. It will definitely put the market share of these countries much higher as most of the other big markets — the US, Europe and Japan — are pretty flat. There was a five per cent worldwide upturn last year because of events like the Olympics and the US Presidential elections. This year will be quieter at about three per cent.

India and China will see big increases. The general economy is in good health, and most businesses here are good. More and more companies are discovering marketing communications. There are more media outlets, and, in fact, it is difficult to keep a hand on the changing media scene here. There are about 200 television stations and God knows how many thousand newspapers, local and provincial. So the whole industry is growing, but still a long way from being mature.

So the growth does not necessarily mean the media business here is becoming more sophisticated.

India always, despite its relative smaller size, has been very much more sophisticated. There are some of the best media planning techniques and statistical analysis, which are quite ahead of the market in some ways. We (Group M) have a big global analytical centre which is a facility for our companies all over the world to send in their problems and data analysis requests and econometric modelling requirements to Bangalore, where they turn it around and send it back. That level of sophistication in India has been there for sometime. As the market grows up it will be a more sophisticated market in the region and in the world.

How is the Indian media business scene different from other markets? And what are the opportunities you see here?

It is interesting because media in almost every country is a local business. Media execution is a local affair. Media planning techniques and strategy can have a global shape. The actual execution, that is media buying, is always a local thing. Here it is different because the vastness of the country and the population means that you have all these fantastic arrays of different channels; fragmentation is already a major issue here. That makes it difficult for companies like us as we have a lot of media to evaluate before coming up with plans.

I think it is also different here (in relation to certain Western countries) because mass media/ television is very dominant. Television viewership is very high and the film and entertainment industry is massive here. Much bigger than the advertising industry, interestingly.

It is unique that way. I can't think of any other country where the film/TV production business is bigger than the advertising business, and here it is double the size. It is extraordinary. It is an under-exploited asset, we believe. A lot of our attention in the coming years as we develop our company here is to forge much closer relationships with Bollywood, studios and film production specialists. That kind of opportunity to connect clients' brands to consumers through films, not just product placement, may be through funding movies or using it as bartering. There are lots of questions and answers to it, but we know that film production business is something which we need to look at more closely.

I guess what we are saying is the role of a media agency is becoming more upstream, less executional, less transactional, less just about buying. When we started the emphasis was on strong buying and negotiating rates. That clearly is of importance but the value we add to our client beyond that is of potentially more importance.

Do you agree with the perception that Indian advertisers prefer a conservative approach to their marketing investments?

It is true. It is a relatively narrow market here. That is because mass media have always dominated the consumers here; I think it is because we haven't yet exploited Bollywood properly as a media vehicle. Sports marketing, which is increasing its share in other countries, is still quite narrow here because sports obviously means only cricket. That, we believe, is going to change with young talents coming up in tennis and Formula One. They have arrived in the public arena here. We will be expanding our sports marketing capabilities to take advantage of that.

By and large, the industry here has been narrow and conservative. I think it is for companies like us to bring in new interesting channel vehicles to our clients. Cricket has reached saturation point. In the current series against Pakistan, I think we bought almost 70 per cent of the inventory available for our clients. My view is that it is difficult to cram any more commercial messages into the coverage of cricket without becoming bored. It does come to a point where it is difficult to get a breakthrough. We have to be very careful not to kill the goose that lays the golden egg.

Advertisers are talking about going beyond the mass media and touching the consumer. Considering that India has a vast rural population, how are your various outfits equipped to tackle the rural dimension?

It is getting better equipped now. We have honed our rural marketing expertise and skills. There are teams that can get into the villages with messages. Often, the trouble in talking about India is that we are focused on urban markets even as there are vast populations in rural areas. We have to find partners, joint venture partners, who can get into the rural local communities. Grassroots-level partners who can touch the consumers there. We are not going to expand our geographical spread beyond the cities we are in (Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad). There may be a little bit for business to be had in a few more cities. So, we will have to look for joint venture partners for better rural marketing specialists.

The media-buying industry has seen a lot of consolidation. They say that India is one of those last big markets where the media houses still manage to dictate terms. So, as Group M goes on consolidating, is there an uneasy equation emerging between you and the media houses here?

Not at all. It is fantastic (laughs heartily). I wish we had this level of market share in every other country (our share of pie in the measured media is only about 25 per cent, maybe in some media it is higher and in some media it is lower). Every time I hear about our competitors complain about our market share, I am confident that we are on the right track. Does it give us an unfair advantage? Yes, I hope so, against our competitors. Does it give us unfair advantage against media owners? No, absolutely no. We firmly regard media owners as our partners. We certainly want our clients to enjoy the best prices. But we want to develop new opportunities with media owners. We fully expect the media owners to consolidate more and more. So that we can meet strength with strength. And also we can look at multi-platform deals. For example, with TV houses getting into print, we can negotiate more broad marketing platforms with those people. What is happening, I think, is that it is becoming a more normal market. Before, the buying side and the selling side were too fragmented. It is good for the business. When there is a fragmented sellers' market, you are not able to invest in strong products. One small newspaper and one small rural radio station making a living alone is very difficult. So, I think a degree of consolidation and foreign ownership on the sellers' side is good for the market.

There is optimism in the Indian economy. But the country has undershot performance in the past. Is there a concern?

We are cautious. We don't make extravagant claims about growth. But we do think the marketing business will grow faster than the general economy. So I fully believe that if the growth of economy is between five and six per cent, then the growth in investments in marketing will be around 10-12 per cent, which is healthy. While we support the development and growth in media and marketing investments, we would also like to see that our client's media inflation is kept to the minimum. If the client's media inflation is higher that the general price inflation, it is more difficult for them to invest in media. Media inflation could hit the smaller clients hard as they could find it difficult to advertise on mass, national media, and they could get squeezed out. But, overall, the signs for the marketing business in the country are pretty good.

What is the Indian advertiser looking for?

Clients everywhere understandably want high levels of accountability in their marketing expenditure. They want high levels of return on investment that are measurable. That's fine and that's the bedrock of what we do. If we are not careful, that can lead to a more narrow use of the media (going back to our earlier talk about conservative approach to media). Because if you are using the media that is correctly measured then you are not using a lot of the new media platforms that are much more intuitive buys. So, we are in favour of focusing our resources on measurement systems and analytics through our company at Bangalore. We want to develop these other channels which are measurable and therefore take some decisions which are intuitive. It is a tough balancing act to be both an ROI agency and one which takes up imaginative and risky executions. It's both an analytical and creative business.

You talked about positioning the media agency upstream and making it less transactional. How are you placed in that respect in the Indian market?

We are probably not even halfway there. We have come a long way from where we were two years ago. I think the media business in India is still too transactional and executional. Not enough agencies and clients have seen the true value of really smart media planners and thinkers and strategists - they spend too much time working on the transactional side of the business - which is important because if you haven't got it then you haven't got the business. Where we add real value is further up in the strategic planning areas, about how to split budgets between different brands and different cities, between different months and between different seasons. How to use different vehicles to reach the consumers, and not just traditional media. In bringing real insights based on research about how people are using the brands. It is a hugely expensive enterprise and all of these insights are based on research. And we are doing more and more of our own proprietary research to drive those kinds of insights.

How will the acquisition of Mediacom, the media buying outfit of Grey, help your business in India? Will Group M add more divisions under it here?

I don't know the people in MediaCom in India yet, but I believe that they do quite a bit of government business. Now since WPP has signed the deal with Grey we have to talk on how we can be mutually beneficial. After all, we are now part of an extended family. I think we will see more entities particularly in the areas I hinted at - entertainment and sports. There may be some acquisitions we can look at in those areas; there may be some new companies or brands that we can start specialising in in those areas. I think we need some more launches as we need to strengthen our position in entertainment and sports domains.

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