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Sunday, April 14, 2013

GroupM top boss says India is a good short- and long-term bet

This Q&A first appeared in DNA Money edition on Thursday, Mar 14, 2013.

GroupM, WPP's consolidated media investment management operation, has a 40% market share in India and expects a double-digit growth to top that this year, Dominic Proctor, president, GroupM Global, told in an interaction.

It’s been a little over a year since you took over as president. Can you share some highlights?
We have been concentrating mainly on 2-3 things. First of all, we are putting a lot of emphasis behind our digital practice around the world and in India. As the whole business changes from an analogue to digital, it requires a lot of investment in people, technology, infrastructure etc. So we are paying a lot of attention there. On the trading side, we are optimising the clients’ expenditures, finding the right media to spend it on and making sure they are getting value for money. So, ensuring proper return on investment (RoI) is another area of focus. We buy approximately 30% of the global media. This gives us a strong market positioning and we are also working on developing our leadership positioning in some of the other markets globally.

How does India fare in your focus areas?
India is developing and strong market for GroupM with over 40% market share. Of the $90 billion global billings, India contributes around 6%, or $5.6 billion. We are very optimistic, and expect double-digit growth this year as well. Overall, I think India is a good short- and long-term bet.

How do you view the Indian advertising, media and entertainment sectors?
We are very bullish about India. We think that the marketing or media and entertainment (M&E) sector in the country is growing and will continue to grow ahead of the general economy. The government’s general economy forecast is round about 5% growth this year, over 2012, and we think the M&E sector would double in 2013, growing round about 10% in 2013 on a cautious note and I wouldn’t be surprised if the growth exceeded that number.

What is the key challenge for Indian M&E players?
I think, in a financial sense, India is fairly strong and growing ahead of the global averages, which is very great for the media business here. One of the challenges with content in the Indian media business is that it’s quite introspective. By that I mean, if you look at the strength of the film business here it’s wonderfully strong. As a proportion of GDP, it is the strongest in the world. But it is very much focussed in the Indian population or the diaspora. The same is probably true with the music business and sports, which is dominated by cricket.

How is GroupM dealing with challenges of digital media?
We are bringing in talent that’s very focused on the mobile. We have business called Madhouse, which is a joint venture with our Chinese business. And the challenges Madhouse and our agencies have is how to take the vast numbers of hours being spent eyeballing mobile devices but the dollars or rupees haven’t yet followed. So basically the way we tackling it is by investing in the talent to bring the clients to the opportunity.

Does GroupM have any plans to look at inorganic growth in India?
Most of our business growth has been organic / internal, which is in some ways is easier to control and culturally consistent. We certainly have a very open mind to looking at acquisitions. Most often it is a question of pricing and because we are the biggest players in the market, we might not have the need to make expensive acquisitions compared to other who have smaller positions in the market and need to spend often over the top to bolster their resources. While we are very careful about that, we are not closed to the idea of making acquisitions in specialist areas like digital, content, mobile, analytics etc.

Follow Ashish K Tiwari on twitter @ashishktiwari

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