After a three-month long restructuring and realigning exercise in India, DDB Mudra Group presented itself in a new and refined avatar to the world on Tuesday. Having found its saviour in Mudra to expand its foot print in to India, DDB Worldwide is ready with a formula and a team that it promises would shake up the Indian advertising and media market and make it a force to reckon with in the coming months.
Representing the group to make this historic makeover, John Zeigler, Chairman and CEO of DDB Group, Asia Pacific, Japan & India was a picture of hope and accomplishment as he presented to the gathering his views and expectations from the alliance.
As the leading voice, and overseeing markets that span 21 agencies in 16 countries, and more than 2,500 employees, Zeigler is a great believer in reinvention and what it implies for brands in this global, think local, market. In conversation with Johnson Napier of MxMIndia, Zeigler emphasises on India’s role in the APAC market for DDB Mudra Group, on how rival agencies like WPP are taking a cue or two from his agency and what the agencies of today need to know to stay ahead of the curve. Excerpts:
Q: How would you assess DDB Worldwide’s growth story across the globe, especially in the Asia Pacific market led by India?
Across our businesses worldwide, we are looking to achieve a growth rate of 15 per cent. With the kind of businesses we have in India, we should be able to achieve a growth rate of 25 per cent plus. As for our other agencies across Asia Pacific, we had a compounded growth rate in excess of 30 per cent year on year.
Q: Having upped your stake in Mudra recently and post the overall restructuring exercise in India, it seems to be an affair that was heavy on the investment front. Your comments.
I would say the investments have really been in terms of people, training, exposing them to the rest of the business operations that we have and we are doing that dynamically every day. From another investment point of view, we see the opportunity to jointly grow our businesses which doesn’t require any investment other than time, talent and people.
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Q: Do you see Omnicom further raising its stake in Mudra anytime soon?
That is something that will be really dictated by the equity partners comprising of Reliance Group and Omnicom. It is something that will echo with the passing of time. From our point of view, it should happen as quickly as possible.
Q: You have all along emphasised the importance of emerging markets for the DDB Group. Have you identified any new markets that you plan to tap in the near future?
We are going to scale up our growth soon in the market of Vietnam. We have just wrapped up an acquisition deal there and will be starting a new business soon. And the other key country for us would be Indonesia. But we would be able to tell you more about these markets only later.
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Q: While the emphasis of the group is on providing 360-degree integrated solutions, it is creative that is stealing the thunder to a certain extent in India. What do you derive of this sentiment? Where does digital fit in this matrix for the group?
In terms of social creativity, what we have learnt is that the connection of creativity across digital and traditional – there is no wall. We have to look at it as a complete communication opportunity to capture the consumers’ interest and intrigue, the ability to pass it on and for them to become the media. So we are going to be growing digital but not as an exclusive digital entity alone; we’ll be growing digital within the core business as well as specialty part of the business.
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Q: How would you assess Omnicom’s growth story against those of WPP and Publicis Groupe who have also heightened their interest around the Asia Pacific market?Â
Omnicom is very anxious to grow inAsia. We have demonstrated that already. If you look at the last five years, you will see Omnicom has had much greater organic growth than WPP. This organic growth has been complemented by some strategic acquisitions and you will see Omnicom continue to grow much faster than the other groups. Again, our goal is never to be the biggest, it is just to be the best. In fact, WPP has also now changed their slogan to say that being best is better than being the biggest. But that’s only because they have talked about being the biggest, that they are understanding the importance of being the best – like we always have; so they are trying to take an element of that positioning from us.
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Q: Though a sister agency, how has BBDO been growing in India and in Asia Pacific?
We work differently and therefore I cannot comment as such, but I would say that they have been doing well in India. Obviously we would like to support them and help them sell their services to their clients through the existing base from the DDB Mudra Group. We do share some clients, like for instance we both service Johnson & Johnson, Mars, and others. So we compete and collaborate with BBDO where it is relevant for our client.
Q: Though not as grave as its predecessor, the slowdown has impacted the growth of the industry to an extent, including in India. What are your views on the global media growth story going forward?
Most of the agencies are trying to fix the economic crisis situation by leveraging money – making money spread thinner than it should. That’s one of the reasons why banks got in trouble because of bad business practices. I think a lot of people are struggling with the economic crisis because they have tried to cut their cost structures down so far that they have actually started to cut into the value of their corporations. I don’t believe that cost-cutting, mergers and acquisitions, and the availability of finance will help the rest of the world reinvent itself. But I do believe that creativity applied to a business will give any business that uses that well, a competitive advantage. I believe that those firms which access and leverage competitive advantage best will win. I think the countries that are leveraging competitive advantages are winning today. Shanghai, Hong Kong, Singapore are leveraging their strategic expertise, their positioning, their competitiveness and they are benefitting from other areas that aren’t doing so well. But all this has to be seen from a country and a geo-political level, and would, therefore, differ across markets.
Q: Has this sentiment aroused the apprehensive levels of clients?
They are very apprehensive as they often ask how we increase our share of returns to our shareholders. There comes a point where the only way to do that is to gain a point from the competitors. And you can only gain more points from your competitors if you are more creative.
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Q: Worldwide, there is a trend of companies opting for CMOs to drive the growth for the organisation. Should ad and media agencies look at this trend as a means to beating the recession blues?
We don’t have a CMO as such at the top as we work in an executive committee collaborative fashion and we do not believe that one person can manage that through the complexities of all brands and offerings.
One of the things that agencies have more trouble is that clients have more focus in cutting the cost of an agency then they have put in to understanding how to get best value out of the agency. Until that changes, we cannot reinvent ourselves because we are running on very thin margins, we are trying to be creative and inventive, but we are being constrained by financial controls.
The first thing that many clients do when they come to an agency is, they say: we do not pay for senior management involvement; that is agency overheads… some clients even come and say: I want to know how much time of your senior management I’m going to get and then we’ll negotiate the rest… those clients are smart because they are buying the best expertise and not just buying heads to do functions and processes.
