Advertising Interviews

Daniel Morel

Chairman & CEO | 06 May 2011

Just because you can communicate, does not mean you should communicate. The whole debate about the notion of private and personal data, and about infringing into people’s personal space is a dangerous area to be in. I wish the industry will self-regulate quickly because if we don’t, then the legislation will come heavy handed and create situations, where we cannot do business profitably. The ‘Do not Call’, for instance, destroyed telemarketing business and it would be a shame if the same happened to mobile.

Daniel Morel, Chairman & CEO, Wunderman, who has been with the company since 2001, has to be one of the most technology-savvy CEOs of the global advertising industry. In fact, his office has a dedicated resource whose only job is to get Morel updated on every new device and any new gadget that can have any possible implication on the communication business. And hence, it was no surprise, when Morel asserted the role that digital will play in personal advertising, and in the course changing a lot about speaking to consumers as we know it today.

Wunderman’s operations are doing well, even better than pre-crisis, as Morel puts it, but one part of the company is dedicated to being future ready, and in this conversation with Noor Fathima Warsia, Morel speaks on Wunderman’s way ahead, personal advertising, plans for India and two things he loves best – clients and technology.

Q. From just the Rediffusion Wunderman operations, today you also have Wunderman International in India – so two set-ups. Can you please share more on how this is shaping up?

As you are aware, our overall business can be broadly divided in two sets of clients – you have a large number of international clients and they want their account to be handled in a particular way across markets. That requires a certain set of talent to do it. And then you have multiple local clients and it is useful at that point to have a strong local partner that can understand the local approach. We are, in fact, seeing, and not just in India but even in markets such as Japan and China, that there is a significant difference in what local clients want and what global clients want. So we needed a structure that could handle global clients with a similar kind reporting, use of global assets, standard measurement across the markets they are present in, and local clients who are interested in taking advantage of market condition, local talent and so on. In some markets, the structure is together with separate teams. But in India, it made sense for us to structure it differently, as both these sets of clients needed that kind of specialised attention.

Q. We have discussed this with Wunderman in the past, but just to see if you still feel the same – the agency keeps a very low profile. Do you think that is a good way to operate today, given the market competition and clients that like seeing their agency in the press?

We have a very hardworking and dedicated set of people, who can stand up on any stage and show the great stuff that we do. But we spend most of our time working for clients, as opposed to broadcasting or doing some chest-pounding exercises. That is our tradition, and that has not changed from the last time we spoke and is not likely to change any time soon. Our culture is firmly rooted in the heritage of Lester (Wunderman), who is the most gentle, modest and unassuming person anyone would have ever met. The entire company is trying to follow in his footsteps and working towards not doing anything that would probably displease him – not because Lester would say anything, he would not, he is 92 years old – but out of respect for the culture he has created, which is less of show-business and ‘me, me, me’ and more of servicing our clients. It may be inward looking, but our clients and our people care about what we do. Look at the management of our company – it is the same set of people, leaders in the business, and who are leading this company for the last decade now. We don’t like to be up there pitching and making statements. We are trying to do things and when it is done, we can talk about it.

Q. We have been reading quite a bit about Wunderman’s global operations and the performance in 2010...

The business is nothing short of being fantastic and we are happy about it. We have very good teams in all markets; 2010 was better than 2009, which was the case for most companies, but in our case, when we compare, we compare to the same month in 2008, and 11 months out of 12 in 2010 were better than 2008, so we have performed better than the pre-crisis levels. In fact, Asia is one of the contributing markets to this growth, and the changes in the global industry have played their role too. During the period of stability, many clients went through consolidation in their spends, and we benefitted from that. We also gained from the secular trend of spends moving from broadcast to more targeted communication given the growth in media such as mobile and newer media like the tablets coming in play.

Q. We are going to ask you more about mobile, but before we go there, we understand Wunderman in India is set for expansion – would you like to take us through the broad plan?

Right now, for us, India has a very important role to play, given its unique position, in putting together something new, which I believe would stay, in the whole aspect of content and customising content for a variety of audiences, and being able to distribute it across markets and media. India, given the smart, young and talented people with the uncanny ability to be able to understand what is happening in content once it is created, are well placed to take this forward. We are great believers of this and we are investing in that sector. Spends would be devoted to find a way of deploying customised content. And we are planning to begin an office here, beginning with Mumbai, this year.

Q. Now, let’s speak about mobile...

...We are very bullish on mobile. Where we are sitting right now, around 33 per cent of all mobile handsets in the world would be smart-phones. If you have to see the history of any product, once the 33 per cent mark is reached, the product gets enough scale to make a difference. The same will happen for mobile as well. With this penetration, some real marketing can take place. Everyone has been talking about mobile marketing for five years, but I think this year we would see some substantial action. The kind of interest that healthcare and retail has in the medium is significant. At Wunderman, we have done a lot of the work in that space and we are well positioned to service that demand when it takes off.

Q. You have said this yourself -- mobile has been a talking point for five years and yet, there is time before it takes off...

But that was true for the web as well. People would talk about anything new that looks promising, so mobile became a very strong talking point. The other thing about mobile was that there were several technological points that needed to be resolved before it became a medium of communication, in particular, the variety of screens. We have a database of 5,000 different phones and you have to work a way where a message can be formatted to these different screens quickly. It took us a while to get there. Just about two years ago, you had to manually reformat the message according to the phone. That was not the case for TV or laptops. The second aspect was the chip behind the phone – it could not just be about remembering contacts and last number dialled, it had to do a lot more and now we have reached a place where even that barrier is being worked out.

Mobile gives you the famous magic wand – when and where the user is, and you also have information on what they are looking for. It puts you in a position to offer a more precise message. We are in a sweet spot right now – somewhere after the geek and some point before the dentist. The geek phase is one where the penetration is low, the edges are rough, and so you can keep trying, but you may not get anything. The dentist phase, on the other hand, is when everyone is in the same space, doing similar things and the margin of the business becomes much lower. But this is also where as an industry we need to get more careful.

Q. In terms of the way we communicate, you mean?

Yes. Just because you can communicate, does not mean you should communicate. The whole debate about the notion of private and personal data, and about infringing into people’s personal space is a dangerous area to be in. I wish the industry will self-regulate quickly because if we don’t, then the legislation will come heavy handed and create situations, where we cannot do business profitably. The ‘Do not Call’, for instance, destroyed telemarketing business and it would be a shame if the same happened to mobile. It has to be handled carefully otherwise there would be a public outcry. Also, we need to be very clear. It is not true that we know everything about everyone. Our phones capture a lot of relevant data from a marketer viewpoint, but it is limited data, and in most cases, data that the phone user wants to share. If your BBM is not on, or you have not opted to show your geographical location, then that information will not be captured. The information is also divided in so many parts that it is difficult to truly know a lot about any one person. People don’t want to live in isolation, but as a marketer we should be careful that we listen to what people are telling us, pay attention to the kind of information they are giving us and information they are looking for. I am a great believer in self-regulation. There are people in the industry who understand and follow this, but it takes a while for a majority of people in the industry to be thinking in the same fashion.

The other barrier of sorts is that there has to be some uniformity in what can be done across markets. Today, a lot is global -- many marketers are present in more than one market and it is complicated if you have to change the rules of what you can do with a medium, depending on the market you are in. A level of some standardisation should come in. Look at the situation in India – Blackberry is under request from Indian Government to divulge the algorithm and the way the data is kept. One understands the desire for an even-playing field and safe environment, but everyone has to be aligned on what is absolutely essential and what is needed for doing business.

Q. As we end this interview – as an industry, we say direct marketing, digital marketing, but isn’t digital a form of direct after all?

Digital is direct indeed – it the same thing, but these are things that happen when new businesses and new ways of communication are formed. We are in the business of creating conversation, a two-way dialogue, listening very carefully and paying attention to data to know what people are saying, what they want and then being able to respond to that, as quickly as we can. All this started with print, so there were print ads and coupons. Then it went to phone and then to TV. Digital is the new medium now, with the added benefit of real time, so the response time has compressed now. It was a mistake in a way to call this medium ‘direct’ in the beginning. The right word was ‘personal’ advertising. If you had to speak to Lester Wunderman today, he would tell you that was the word that had to be used back then. Personal advertising mean it is tailored and targeted in a way that broadcast is not, to be interactive, and we have been ‘interactive since 1958’.

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