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Laura Desmond

Global CEO | 24 Dec 2009

There is no doubt that the game has changed with this recession, all of a sudden all of my clients such as P&G, General Motors, Coca-Cola, Fiat, etc., have changed their conversation. I have to pursue growth and growth is in Asia and the growing markets. I think it’s not about power shifting for big companies, because they get only 15-20 per cent from the growing markets, which means 80 per cent still comes from the developed markets. But yes, Asia features in every single conversation now as never before.

One of the youngest CEOs to lead a global marketing services company, Laura Desmond commands a staff of nearly 6,000 team members across 110 offices around the world, partnering with leading brands, including Nintendo, Oracle, Procter & Gamble, Samsung and Walmart since becoming SMG’s Global CEO in June 2008. In addition to her SMG role, she also sits on the VivaKi Board of Directors.

Prior to her appointment to Global CEO, Desmond was CEO of SMG – The Americas, where she managed a network spanning the US, Canada and Latin America since 2007. Responsible for leading media agency brands Starcom, MediaVest and Spark, Desmond also tapped into the need to reach multicultural consumers by launching SMG Multicultural and the creation of 42 Degrees at MediaVest to operate alongside Tapestry.

From 2003 to 2007, she held the title of CEO of MediaVest, where she tallied up new business wins from Coca-Cola, Mattel and Wendy’s, among many others, ultimately earning her the title of Media Executive of the Year from Mediaweek as well as Adweek Agency of the Year. In 2000, she was tapped as CEO of Starcom MediaVest Group Latin America. Not only did Desmond help double the region’s revenue, she landed new business assignments from Kraft and other iconic brands. While she has spent her entire career within SMG (and previously Leo Burnett), Desmond has worn many hats, including filling in for the client as the Media Services Director for General Motors and moving overseas to serve as International Media Director on major brands, including Kellogg’s.

In conversation with Noor Fathima Warsia, Desmond speaks about her journey as Global CEO and SMG’s plans for Asia, especially India.

Q. How has your journey as Global CEO been so far?

India is a strategically important market for us. I have an excellent leadership and management team. I have been Global CEO for only a year now, in this time of global crisis, it’s important to be a leader who dedicates and empowers the management team to do the things that they need to do. Secondly, it was very important for me to be more strategic and focussed with how I spent my time. I have tried to be more flexible on various issues and have been very thoughtful about the way I divide my time among all our various markets.

Q. In last one year which markets have been in your focus?

Our business is really focussed on our big 20 markets. These are the markets that we get our revenues from. Of these 20, the first 12 are what we call ‘dynamic markets’ where we see high digital and media penetration, are high in experience, and have highly trained professionals. In this domain, the markets that I have spent time thinking about are Australia, the US, Canada, the UK, Germany, France, and Singapore.

Our second priority is emerging markets with lots of developments, digital penetration, high growth with high opportunities. However, the needs that we have to meet there are very different. It is more about training and development, more about capability building, and about infrastructure launching in these markets. They occupy a potential amount of our revenue because we have a very big growing market. India, Mexico, and the Middle East are such markets, where we are among the top three. In the Middle East, we have a 35 per cent market share, while in Russia we have a 36 per cent market share. We are very pleased about our position in the emerging markets. I fundamentally believe that winning the future does not depend on the US, but on these emerging markets. We have a dominant position in the US, where we have a 42 per cent market share. Most would say that we are one of the top brands there.

Q. So, do you think there is a strategic shifting of power from the West to the East? Or do you think this shift is overestimated?

There is no doubt that the game has changed with this recession, all of a sudden all of my clients such as P&G, General Motors, Coca-Cola, Fiat, etc. have changed their conversation. We are not going to get growth from the developed markets, growth is there in the developing markets. I have to pursue growth and growth is in Asia and the growing markets. I think it’s not about power shifting for big companies (GE, Warner, etc.), because they get only 15-20 per cent from the growing markets, which means 80 per cent still comes from the developed markets. But yes, Asia features in every single conversation now as never before.

Q. What about India and China?

I think we need major disruption in China and India in terms of standard of living and buying power. In 5-10 years, we will continue to see incredible, steady and exponential growth. But it totally depends on the buying power. In long term, look at the population growth in these places, there is no doubt that living standards will rise. Shift of attention and mindset have surely changed now.

Q. The Chinese market is said to be 5-6 times bigger than the Indian ad market...

India has both rural and urban markets. Strategies for both the markets are different. Marketers see India very differently. The Indian market is more sustainable. It’s true that China’s increase is very steep, whereas India’s is not that steep, but the Indian market is more sustainable.

Q. Quite a few media brands are mushrooming in India. Is that a concern for you?

I actually think the launch of these brands is a good sign for India.

Q. Do you think there is place for so many media brands?

I think it shows that the market place is only marginally penetrated and there is place for a lot more growth in advertising.

Q. Will Starcom compete with MediaVest the way it competes with ZenithOptimedia, which is also a sister brand?

Starcom and MediaVest can pitch for business individually and win and grow without hurting each other.

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