Shashi Sinha, CEO, IPG Mediabrands talks about digital ad spend pie, the progress on BARC, e-commerce explosion, video consumption trends and more…
The last quarter of 2014 saw ecommerce players aggressively contributing to ad spends; do you see this as a long term phenomenon?
E-commerce all over the world is known to pump in via customers. India is a large country. Whether it will last over ten years or not, I cannot say. Definitely over the next two three years I see ecommerce playing a valuable role. It is going to small towns. Distribution is getting sorted.
Whilst there has been a lot of conversation on digital spends increasing; what is the ground reality in your view? Is digital today the core of media plans?
It is very fashionable to talk about digital. End of the day digital is still 8-10% of digital adex. It is growing very fast but it is never going to become like UK or US where in the UK it is 50% and in USA it is 30% of adex. But it may get there five years down the line. But at this point of time I don’t see that happening for variety of reasons. There is a particular momentum to digital. India is a large country. Penetration of digital is still not in place and there are infrastructure issues. Digital is a great medium and fast-growing but if it will ever become at the epicentre of the media plan, I am not sure. What’s happening today is people are realising that digital plans need to be integrated into mainstream plans. So there is a lot of focus on it and even by large FMCG companies, which may not be large spenders on digital in percentage of their spends.
What is your take on GroupM’s prediction of print adex reducing and OOH and digital increasing?
Digital spends will go up. That it will be the fastest growing among all media, is a no-brainer. But any other medium declining in India in the short run, I don’t agree with. In case of print there will be an alignment, there may not be additional value coming in to English press in big cities, but in regional print the surface has not been scratched. I have always maintained it still has a long way to go. The effect of digital will take a long time to penetrate those homes. All said and done, the future growth of India is in small town and rural India. I am not sure whether print will decline. I am a big believer of print as a medium. I believe it still has a lot of credibility. While digital is a great medium, unfortunately, it doesn’t have credibility to the extent that print has. That’s not going away from a country where source credibility is very important. India is still a growing economy. I don’t think there is going to be any decrease in any medium.
Are media agencies equipped to deal with second-screen adoption?
It will be unfair or stupid to say that we know it all. I think the medium is far more evolved internationally than in India. Mobile of course is going to be a great opportunity because India is going to be a mobile country which will throw up its own challenges. It is fashionable to say that we are ahead of the curve. We take support of a lot of small enterprises who understand digital better but on a large scale for ramping up on a big campaign, I don’t think anyone is that equipped. But the advantage we have as big media companies, when a client wants something we will learn quickly. We are doing a lot of things for Coca-Cola which may not be big digital spends but at the cutting edge.
What do you think of video consumption becoming the next big thing?
Visual content will always remain big in India. Local content will remain big. Whichever screen it is played on, content will remain powerful. Video content in the short run will definitely do well. The power of digital is about CRM. Performance on digital is something that people have understood, but CRM is far bigger than performance. Finally, the last frontier on digital will be that. It will not be just video.
Is content still the king?
The issue is how to turn out hundreds of bits of content at an effective price. For digital you need to repurpose content. The whole shift is not understood by people, including us, how to ensure seamless streams of content coming out in an affordable way. That mindset and business model has to be still worked out.
Optimisation of content remains a challenge. It’s not the capability which is the problem, it is how to do it in an effective way which is meaningful to the client and at the same time offers value proposition is a balance to be struck yet.
How does programmatic work in a scenario like this?
Today with clients there is a fair understanding of media basics. Digital as a medium allows you a lot more data and analysis. That further gets compounded in digital. Programmatic buying is real-time buying. It’s on a software and it is not left on human interpretation of data. But understand that when something works, a stage comes where it will bottom out. Finally it is collecting data from various sites and analysing it. It will even out eventually. The issue with programmatic buying is transparency. i.e. how does it work, what are the mechanics, the issue is not about the effectiveness of the product.
Is BARC is set to launch in April?
We are in good shape. We have already started meter seeding and monitoring. But there are a few check points that will come. But I am confident we are in good shape. Publicly BARC has not put out a date, I don’t know what the formal BARC stance is, but as far as I am personally concerned, we are working towards an April launch date.