In a landscape where acquisition of standalone digital agencies by large enterprises is the order of the day, it pays to have played the game of differentiation at an earlier stage. Not to be outdone by what’s transpiring in the digital arena, traditional digital agencies functioning out of full-service media agencies are putting up a spirited front in fending off threats from new market forces. As is the case with Mindshare Digital, which has been delivering steady growth numbers year-on-year and also managing to win more hearts (of clients) in the interim.
According to Nick Seckold, Head of Digital, Asia Pacific, Mindshare turnarounds of such kind is what inspires the agency to keep delivering more. True to his saying, Mindshare India has had a good 2012 by posting a positive 20-25 per cent growth over the previous year. Much of that growth has come from waking up to realistic expectations of clients in an era where something new transpires everyday while also ensuring that digital continues to remain the topmost medium to go-to for clients than be a last resort.
On his trip to India, which also coincided with the announcement of a new Digital Leader for Mindshare India in Siddharth Sethi, Mr Seckold gets talking to MxM India’s Johnson Napier on how his agency continues to remain a favourite for clients, on his ambitions for the country from an Asia-pacific perspective and how he is pulling out all stops to make sure that talent no longer continues to be an issue for the agency. Excerpts:
It seems to be an exciting time to be operating in the realm of digital, especially in a fast-paced market like India. Would that be a fair assessment to make of the domain at the moment?
There’s no doubt that India is emerging very quickly in the digital space. If you see the online space, there are about 140 million people who use the internet which is roughly about 11 per cent of the total population, making it the third largest behind the US and China. Clearly, there is an audience out there on the medium which will naturally see advertising investments follow. But what is not happening as quickly is adoption of technology, and access to internet doesn’t necessarily follow the same path as market investment. So while adoption of technology is at a pretty steep curve, the advertising investment is pretty much flat where growth is concerned. The challenge for India is that while the investment is increasing, the question is whether it is increasing at the level that it should. According to me, it is not. But that’s also a normal event because advertisers too have to be confident that when they put money behind channels in the digital space there is an ROI on the back of that and that they have to achieve the KPIs, whatever they be.
But despite the huge buzz, the advertising pie from digital is still a far cry from touching the two-figure percentage mark. Is that something that worries large players like Mindshare Digital for an otherwise promising market like India?
You can argue that advertisers are not as aggressive as they should be when it comes to digital but there are reasons for that. As I said earlier, confidence is a big thing and they have their KPIs to achieve, sales figure to achieve… and if you ask me whether they are going to put all their chips in one basket which is something they are learning about, I would suspect no. What I would like to see though is a bit more experimentation and making some big bets in certain areas. For me, it is not about taking money or stop doing television; it is about optimising your channel mix and making sure that you are giving the digital channels an opportunity to complement what you are doing in traditional media.
Of the three screens that are touted to rule our lives in the future, a lot of expectations are being laid around mobile to emerge the best and most popular of the lot. What is your estimation of the medium from a growing market like India?
Mobile in India is at an interesting phase. That’s because in a lot of markets when you think about mobile you straightaway think of smartphones. But in India, a very small percentage of the mobile audience use smartphones (about 8-10 per cent). It’s a huge volume of people who are using feature phones on a daily basis and obviously the opportunities for mobile advertising from these devices is a little different from smartphones. Also, India is a very different market with different classifications like Tier 1, 2, 3, etc and what you do in Tier 1 is different from what you do in Tier 3 and so on. But mobile has to be a part of any communication plan and can be used in different ways.
Complementing mobile and online in its growth is social media that has been a go-to medium of late for brands from all quarters. Is social media as big a phenomenon as it is being made to be?
Social Media is nothing new and the platform has been around for quite some time now. It’s only now that we are starting to understand the power of social media. In our view, social media is not a channel necessarily though we do talk to clients about their social media strategy. For us, social media is much more than just having a presence on Facebook; it is a culture that brands need to understand and is not something that you can turn on or off like is the case with television. One can actually support promotion-based marketing with social media but once you engage in a conversation in the social space there is an obligation to carry on that relationship with the consumer. The conversation can change but if brands want to really resonate and build a meaningful conversation with their consumers it is important that they understand the medium in a better way. In my opinion, the brands that do the best live and breathe social media. So social media is huge in India and it is one of the Top 5 Facebook markets around the world. In fact at last count, five-six of the Asia-Pacific countries made up the Top 10 global Facebook countries. I think the challenge for brands coming onto this medium is what is the reason that they want to be on that medium? It is about why you have to be there and what is the long-term strategy that you want to communicate to the audiences. It is also about how do brands create social-by-design thinking. So when they are thinking about a broader marketing strategy, the emphasis has to be on how they can use it on the social space.
Are you happy with the performance of Mindshare Digital in India?
I am largely happy with the way we are progressing in India but if you ask me are we perfect, the answer is no. There are areas for us to improve. We have grown quickly on the back of the clients that we have and the team has been doing a good job in maintaining that momentum. It is also about the infrastructure challenge that we have, about retaining people in the tribe as digital practitioners are very demanding… we are in a business that is full-service and we are moving towards is integrated planning. So when we talk to clients, we do not talk about online or offline or that you need a digital strategy – it is just ‘you need a strategy’ which then has to be accessed across mediums. The next phase of challenge for us is to merge the online and offline teams much more closely.
While on talent, it has been an issue confronting Mindshare Digital for some time in India. You’ve just hired Sidharth Sethi to lead the division a long time after Ashok Lalla left the firm around a year ago. Why the delay?
We are very picky with our talent. I guess the team has struggled to find the right personality to lead the business; the role is anyways very challenging as you have a very large area to cover in India. We needed someone who had a technical understanding but was also able to lead the agency, have a strategy, handle clients, speak at events comfortably…it’s not easy to find people in digital that fulfil these criteria. Sidharth has been around in the business for some time now and suits the role perfectly.
How does India stack up vis-a-vis the other important Asia-Pacific markets for Mindshare Digital?
It’s difficult to comment because it doesn’t necessarily reflect the market. If I look at Australia as an example which has grown pretty quickly over the past two years, it is because they have gone through the few changes that we have discussed above. Their client profile is slightly different – if you have clients that are predisposed to digital thinking and operate in an environment where infrastructure is good, where there are enough consumers, where there is a willingness from advertisers to invest in the medium… so, from my POV it is more important for me that the team is putting the building blocks in place that move them in the right direction and build a sustainable product in the long term. We are in a people business and we sell services to clients. The challenge for us is to have a product when people leave. It’s about building in processes and having checks in place to make sure that when people leave the others who come in are able to take on the responsibility in a more capable manner.
We can safely assume that India is amongst the Top 3 markets in terms of size and growth for Mindshare in Asia Pacific.
In terms of revenues, how have the numbers grown from the digital division in India?
In terms of billings, digital as a division has been delivering about 20-25 per cent growth in India. There are some clients that are investing adequate amounts of money in digital whereas the others have a long way to go and need to think about investing in opportunities around the medium. What I like about the Asian market is that the market is not saturated in a lot of these areas and if you do things in a right manner you can stand at pretty quickly and you can steal the march on your competitors. What I’ve observed, especially in South East Asia is that there is a culture where certain markets are risk-averse. It’s about experimentation and ring-fencing certain amount of investment on a regular basis to experiment with new channels which then go on to become core channels. It’s about the 70/20/10 rule where you do 70 per cent of the stuff you know works, 20 per cent is doing something that you know is different and 10 per cent is doing something new. As you learn and grow and develop you then push the 10 per cent to 20, the 20 to 30 and the 30 to 70. If advertisers are not adapting to that line of thinking they will never find out what’s around the corner.
Acquisition of digital entities by major enterprises has been the order of the day in India. Is it a telling sign of things to come in India?
It’s a sign of the times. While do we have our eyes on how the acquisitions are coming about in the Indian landscape, but I think it pushes us to do more. In fact WPP has a strategy where it looks at the acquisition route as a means to scale business pretty quickly. The challenge in this business is to have the ability to integrate them. What it also does is give us access to a lot of specialists in a lot of areas. But overall, competition is indeed good for the growth of this industry.
What is the growth number you are looking to achieve in 2013?
Our global ambition is to clock a 30-35 per cent growth over the next year. Where India is concerned, it is definitely moving in the right direction. If we can get to that level globally and if we are doing well – I think that will change anyways organically. Just with the growth of this sector and clients too have a big ambition to invest more in this medium.
Going forward, what are the new avenues that you’d be tapping for growth in India?
When you say future growth in digital, for us it is about helping clients understand the value of online video and optimising the channel mix across that opportunity. Also, we need to do a lot of work around our people – making sure that they learn and develop skills and about making sure that advertisers get a holistic view of the medium. Also, we’ve got to maintain specialism and make sure that our people are capable of dealing with situations across verticals. Also, mobile will be another medium that we would be laying huge emphasis around.
On a lighter note, Sir Martin Sorrell was quoted as saying that Twitter is more of a PR medium while Facebook is used more for branding purposes… do you endorse that view?
Absolutely! If Sir Martin says it then it must be true. He’s the head honcho and he has a slightly different view of the world. But there have been a lot of brands that have done well using Twitter as an advertising medium. Is it a standalone? No. Can it be used for everything? Absolutely not! I think the challenge of Twitter is finding the right way of using it. To put it aptly, advertising on Twitter is the conversation string and the challenge for brands is to find a way to infuse a message into that space. I am sure everybody is talking about it and it is great PR for WPP. That’s what makes Sir Martin so special.
