Category: MARKETING

Of the numerous verticals under the ambit of advertising and communications behemoth Ogilvy, the one that John Goodman is particularly proud of is Ogilvy Action. While it may be natural for him to favour the agency, given his association as President, Asia Pacific he in fact has a firm reason to share: it is the fastest growing agency in the world for the group.

Not a surprising statement to make given that in the last couple of years, Ogilvy Action has seen annual growth across Asia Pacific in the range of 30 per cent a year. That’s miles ahead of the growth number that the other agencies have managed to throw up year-on-year. And if Mr Goodman is to be believed, apart from the fabulous growth, what makes his agency a favourite is its ability to offer both the analytical and creative & implementation side of solutions.

In India to release and share findings from the survey Shop Talk, Mr Goodman takes some time out prior to the event and talks shop with Johnson Napier of MxMIndia. India, talent, emerging markets and FDI take prominence as Mr Goodman gets talking on these topics and more. Excerpts:

Could you take us through some of the findings from Shop Talk – the survey that reveals valuable information around the shopper-consumer?

The event is intended to announce the findings of the research that we have done into how Indian shoppers behave, how they act when they are in hypermarkets, what the differences are between what people think and what the reality is and then talk a little bit about the tools that we have developed to help people understand that and be able to use it to be more effective in their marketing.

You’ve concentrated on three important markets of Delhi, Mumbai and Bangalore for the survey. What was unique about these shortlisted markets; why did you leave out other important metros that could’ve lent you a wider perspective?

There are many important markets in India and beyond a point you have to draw a line on how many cities you want to cover. The hypermarket area is the most developed in these three cities of Delhi, Mumbai and Bangalore and therefore we thought we could get more useful information from these pivotal markets. There may be regional differences that could arise from a Chennai, Kolkata or Hyderabad etc but in general we haven’t seen great difference in behaviour from one city to another.

Is this the first such study based out of India? What relevance does it hold for your agency from an Asia-Pacific perspective?

We’ve done various studies on how people behave in stores and how it makes a difference to what brands are trying to sell. In the recent past we have done studies in China, UK, the USA etc and what you see is that people often change their decisions; they behave differently when they are in the store. We always talk about the difference between the consumer and the shopper; the consumer is fairly passive – they are sitting and watching television or out in the car or in the office and they may have seen some advertising but they are not actively making decisions. But when they are in the store whether in the hypermarket or mom-and-pop store or even online, they behave differently. They are thinking about what they are going to buy, they know they are going to spend money, they are engaged…they are thinking positively about what brand, what products and what decisions they make. Up until a few years ago people really didn’t think about it and they spent all their money trying to influence people when they are home or out through radio, billboard etc but so many decisions get made at the last minute when people are actually in the store or are just deciding to buy or whatever – you need to communicate to people and need to understand what’s going on in their mind.

What are your observations about the Shopper Marketing space in India? How have you seen it evolve over the years?

There is a lot of traditional trade existent in India; it is the smallest market for organised trade. It has changed hypermarkets, changed supermarkets, branded stores and so on…it has changed quickly but it is still much further away from say a China or Thailand or other developing countries. As a result the behaviour is different – people are coming to a new experience and are going to shopping malls, hypermarkets, which were not there a few years ago. And therefore we have to have an understanding of how Indian consumers react, which is a new territory because we often know how consumers behave when they shop in a mom-and-pop or big stores but how they behave in an organised trade is very different. Our research tells us that this will continue to be the trend; it is inevitable over the next few years that whatever happens with FDI or with local investment that the trade will become more organised because it works much better that way.

In terms of criticality, how has your focus around research / analytics grown over the years?

We put a lot of emphasis on research, data and insights and where we are looking at insights we want evidence whether those insights are correct or not. So if we want an understanding of how people are behaving in stores we need not just take a guess but research and analyse that data in order to have robust outcomes that people will want to use.

How has Ogilvy Action as a unit performed for you over the past one year, including India?

In Asia, this has been the fastest growing part of Ogilvy’s business. We are starting to see that take off in India as well. So we have a lot of clients whom we work with who are now coming to us for this kind of support and advice. Also, there aren’t many agencies in India who are doing this. If you look at traditional advertising there are a lot of agencies out there available to service you but that’s not the case in this arena. Though we have big competitors from other agencies who come here to India but we obviously have an advantage as we are the first in this space.

How have you been able to quantify this fast growth into absolute numbers?

In the last couple of years we have seen an annual growth across Asia Pacific in the range of 30 per cent a year. We think we are in a good position as we are able to offer both the analytical and also creative & implementation side of solutions. While there are others who are either good in creative or analytics but not in both the disciplines. That has been our point of difference. We can tell you what to do and then we can do that for you too.

Do you see India leading from the front where growth is concerned?

I expect in India the business to grow very quickly as I expect the client to firstly wake up to the trend and secondly, the advertising market is quite cluttered so people are looking at new ways to reach out to consumers. Also, the trade is becoming much more organised and as that happens these kinds of services become more important.

In a normal scenario, clients would prefer to wait and watch then reach out to their purses during an economic slowdown. Did you see that happen with your agency?

We operate in an interesting area because we combine with three parties: client, retailer and the consumer and we have to come up solutions that make all three happy. That’s because retailers won’t co-operate with us if they do not feel it is going to build their business, clients want to see things move in their store and for the consumer it is about better information and choices. So things go up and down in the Indian economy but generally we see a lot of growth to come from this market. It is such a huge country that it’s potential for growth is limitless.

What is your observation on the current state of affairs where FDI in retail is concerned?

This is one of those situations where it is one step forward, one step back. It’s like they decide on something, and then they change their mind. It’s difficult to predict. From the point of view of the client, it is both an opportunity and a threat. Opportunity because they can deal with fewer consumers and bigger networks but the threat is that retailers tend to control the retail environment. If you’ve invested in a big network in a hypermarket the retailers are in a very good negotiating position with the manufacturer and therefore the manufacturer has to demonstrate value to the retailer. It becomes a very competitive environment for the manufacturer.

Any other challenges you foresee for the sector in India?

The politics of it is really very worrying because as I said if the FDI becomes less controversial and if people see the benefits it brings to ordinary people, then it will continue to keep growing. The fact is that in organised retail the consumer benefits the most, more than anybody else. They get better prices, better quality of food, good hygiene standards and so on. At the end of the day it is the consumer who is going to win.

How has your Rural Marketing division been performing over the years?

We were the first ones to develop a rural marketing agency, started back in 1995. We work extensively with clients like Unilever and Castrol in terms of reaching out to villages, rural areas, small towns… and it is really an exciting part of our business. Also it is very challenging as we get faced with infrastructural issues and the fact that you are dealing with a huge number of people who are very diverse and spread out. But it’s an interesting part of the business because the messaging has to be very different. While the urban audiences tend to be more sophisticated and good at decoding messages and understanding communication, that’s not the case with rural audiences for whom the communication has to be different.

As you move forward, what would be the core areas of focus for Ogilvy Action?

There will be a growing emphasis on digital and data that enables clients to get a much better understanding of the big picture. We are now in a situation where the client can stop to build up data and digital contact with a much bigger reach. So from the technology point of view, it is helping the way we work. At the same time the rural area is still underdeveloped, and if you see the size of the rural population we have barely managed to scratch the surface where reaching out to them is concerned. So the sophistication of data and rural contact are important for the Indian market, and when the two come into contact the connections become better.

What about growth from the Asia Pacific market – how has it panned out for you?

For Asia Pacific it is difficult to say because what happens in Japan is different from what we do in China or Malaysia etc. But at the end of the day, the client wants to reach out to the shopper, wherever they are. That’s where the decisions get made.

Any emerging markets that you are aggressively considering tapping into, moving forward?

I think Indonesia will be a huge opportunity because it has been a sleeping giant for long now. It is the third largest country in the world but it has remained quiet so far. That is all set to change, I guess. Similarly Vietnam, that has a large rural population and is also a very dynamic market. A place where we have just opened an office is Myanmar, because with the political situation changing and with the country being open to the West we saw a good opportunity there. We are the first ones to enter that market.

Are you content with the talent situation in your agency or is it still WIP?

Talent is the most difficult challenge we face. To be quite honest, it is easier to find a new client than to find new talent. We are trying very hard to train, to develop to get new talent from outside and move experienced people from one place to another, but the demand for talent is huge and if we could find more people who are good at what we do, we would grow quicker. While we are not worried about the leadership issue in Mumbai, we are looking at positions outside Mumbai including Delhi, Bangalore etc where we are seeing good traction in the business. We hope to appoint new people in these markets soon.