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Sunday 17 February 2013

At Aegis, digital, OOH big bets

Ashish Bhasin
An edited version of this Q&A first appeared in DNA Money edition on Tuesday January 29, 2013.

After 21 years with Lintas Group, an opportunity came by in 2008 from Aegis Media which had a struggling unit in the country – Carat. It had 50-odd people, making losses and wasn’t doing global standards of work. That’s when Ashish Bhasin took over as CEO for South East Asia and South Asia and Chairman for India. Since then, the company has grown to 500 people as of today and from one business to 11 different lines of businesses. He spoke about the agency’s overall business and the advertising industry in general. Edited excerpts...

How far as the Dentsu-Aegis deal reached since considering it was signed in the first quarter of fiscal 2013?

Dentsu is in the process of acquiring Aegis Plc and being a global deal it will take time to conclude.  The transaction hasn’t yet completed but once it is done we will be part of the Denstu family. We do anticipate that it should happen soon, but nothing is done till it is done. The situation is that the deal requires regulatory clearance from several countries. I am not very sure but my understanding is that approvals have been received from most of the key countries except China where it is work in progress.

How will both entities function after the deal is completed?

Our global CEO has very clearly said that it will be business as usual. Aegis Media will work as a brand by itself. What and how will things unfold is something that I’m not privy to but our understanding is that it will be an independent operation that will continue to run under the Dentsu umbrella.

The year gone by has been a very exciting one for Aegis. How was the business like for the Indian unit?

With a total of 150-odd clients all across in the group, it has been a very good year for Aegis globally and an exceptional one for us. In 2012, we crossed the Rs 1,000 crore turnover mark and the year has been a record breaking spectacular year both in terms of growth in revenues/billing/profits as well as number/quality of people etc.

Which segments have seen the maximum growth?

While all businesses have done well, digital and out of home (including retail) in particular are very fast growing verticals. That’s because more clients and volumes are coming in, in these lines of businesses. However, print and television continue to be large in India and hence are major contributors to the business.

Your company straddles the entire gamut of advertising and marketing services. How has the approach helped?

Clients today want the benefit of specialisation but are fed up of silos (an advertising industry jargon indicating various departments / divisions). Each one is trying to push their agenda. For instance, the out-of- home (OOH) guy will focus only on outdoor and scrap every other media. Clients today want a complete solution and not just print or television.  At Aegis, we have this system of ‘one country one P&L’. While all the departments / divisions have their individual targets, the profit and loss (P&L) statement outside India goes through one person.

For us, what really matters is doing things that are right for the client. As a result the client benefits from all the specialisation we offer and is saved from the hassles of siloisation. This philosophy has clicked very well for us. Having said that, we might only have an advantage window of around six months or so because others are quickly catching up to this approach of doing business.

With business growing exponentially, you must have a very aggressive expansion plan.

India is not really four metros of Mumbai, Delhi, Kolkata and Chennai, which is why we already nine offices and should be adding another one in Kochi sometime soon. The ambition is to have a minimum of 16-18 offices in two years from now. Reason being, there is a lot of business in tier II and rural markets. It’s more about touch and feel these days besides what may work in Kochi may not necessarily work in Chandigarh. One needs to understand the local market / media and related outfits to ensure best results and maximum impact of the client’s communications and initiatives.

Talking about rural demand, there are very mixed opinions in the market. Could you throw some light on the ground realities?

I think there is complete confusion. I can confidently say that having pioneered rural marketing in India by setting up set up Linterland – the rural marketing unit of Lintas – which was the first attempt any agency made to have a proper rural network. I am a big believer in rural markets. There are 100 ways in which one can touch and engage a consumer and touching, feeling, reaching out to them in person is definitely very important.

Despite phenomenal growth in the number of television and newspapers, there is a very large part of our population that is unreached by any mass media. Even if they are theoretically reached the communication isn’t effective because for eight hours in a day they don’t have electricity.

On the other hand, there is this largest gathering of humanity at Kumbh Mela with almost 10 crore people attending which presents a huge opportunity for marketers and brands to reach out to them. There is no option or alternative for companies to look at rural and reach out. Companies will have to find a way and as agencies it is our duty and a great opportunity to be able to deliver that.

What is your approach the rural markets? What activities are undertaken there?

I was involved in the launch of Wheel detergent powder for Hindustan Lever (now Hindustan Unilever Ltd - HUL) back in mid 80s to early 90s. When I started working as an account executive on the brand, first thing HUL made you do was to go for 15 days and live in Etah (a village in Uttar Pradesh HUL had adapted). So you literally lived the way villagers would live there. What you learnt out of that was really insightful. That’s why I insist my rural guys to go and spend some time in villages before they actually start talking about it. That’s where all of India. It is through these initiatives that we have tracked various activities for the rural market including drawing up a calendar of village supermarkets or ‘Haat’, ‘Mela’ calendars, van operations, planning and data mining for rural markets etc.

What are your plans for 2013 looking like? Could you tell us about the key opportunities for Aegis this year?

Our plans are largely based on the clients and opportunities in India. The key opportunities we see are in the digital and mobile space.  That is why we have made disproportionate investment in this space including acquiring iProspect. Considering a lot of search is now happening on mobile handsets / devices so digital will certainly be the name of the game. The OOH media will be huge and so will be outreach (touch and feel activation or experiential).
Print and TV will continue to dominate for a long time to come but agencies will have to discover new ways of handling it. 

For instance, there is complete lack of qualitative research in India hence as a result we have made the largest investment ever on a single source data. Imagine, despite having a 20,000-25,000 crore advertising market, we don’t have any large reliable single source data in the country. We have Consumer Connection System (CCS), which is a global Aegis Media tool and world’s largest single source data. It has more than 300,000 samples globally. We have brought that and are running it in India with a very large sample size across 18 cities which is a very robust plan. This initiative is giving us immense insights into how a consumer interacts, how s/he consumes media - you can actually take it down to a category and a brand.

Could you elaborate a bit on the digital and mobile space activities?

Digital is not about putting a banner advertisement on a website anymore. It’s about engaging the consumer, developing applications for mobile phones related devices. While Ipads and Tablet devices are not that big in India, with prices coming down gradually, the entire dynamics of the game is changing and very rapidly than anyone can realise. In such an environment continuing with just a print, television or banner advertisement will not help the client engage a consumer because s/he is moving much faster. Our entire focus on digital is holistic and there is no line or separation between creative and media in digital because it’s all one.

People earlier didn’t think that a large set of consumer will transition from desktops to mobile devices and advertisements were never made keeping mobile devices in mind. This is certainly a huge problem for marketers and brand managers. Interestingly, one of our verticals, Isobar enjoys a preferred Facebook page developer status and those are the kind of areas we will have to stay ahead of the curve and your job is never done here. By the time you’ve finished it, you become obsolete.

How do you deal with the related technology requirements?

We are putting together a large tech team including programmers, net developers – nothing to do with advertising – to be able to deliver the digital communication. One can conceive and create a great idea but delivering it will be impossible if you don’t have an equally great tech team. In a sense tomorrow, our competition could very well be a large information technology (IT) major because that whole line is blurring now. Currently we have 18 people and the plan is to at least double the number in the next few months.

Do you see the tech team getting bigger eventually?

If the approach really works one can easily look at a number of 200 people just doing tech because the business vertical will then be catering to the global markets and not just India. It’s like how the IT majors including Infosys, Wipro and TCS that do tech development in their areas globally. There is nothing that prevents advertising companies like ours to start doing it as well.