Recession lessons well learnt, but worst may not be over, caution Apurva Purohit, Ashok Venkatramani, Suman Srivastava, Tarun Rai, Vikram Sakhuja, Srinivasan Swamy
The exchange4media Conclave 2010 in Mumbai on June 11 concluded with a ‘Power Panel’ comprising Apurva Purohit, CEO, Radio City; Ashok Venkatramani, CEO, Media Content Communication Services; Srinivasan Swamy, Chairman, RK Swamy Hansa Group; Suman Srivastava, CEO, Euro RSCG, India; Tarun Rai, CEO, World Wide Media; and Vikram Sakhuja, CEO, GroupM, who shared their learnings from the slowdown. The session was chaired by Anurag Batra, Chairman and Editor-in-Chief, exchange4media Group.
The annual flagship event of the exchange4media Group, the Conclave is special this year as it marked the commencement of the Group’s 10th Anniversary celebrations. The theme for the Conclave this year was ‘Rebooting the Indian media and advertising industry’. The exchange4media Conclave 2010 was presented by Dainik Jagran. CNEB was the Associate Sponsor.
Anurag Batra opened the session by asking the panellists four very specific questions – what were the three lessons they had learned from the recessionary times; one thing they would like to change in the industry; a book they would recommend for all to read; and the one person who had inspired them the most.
The ‘Pavlovian’ reflex
According to Vikram Sakhuja, the chief lesson to learn from the downturn was that adex needed to correct itself and correlate to the GDP in a downturn. There would always be a ‘Pavlovian’ reflex to the downturn, but the effects would never be that bad in India. “There would be volatility,” he added, but it would result in learning. “The proliferation and fragmentation was a source of concern, but through the downturn, I have learnt to embrace it for it gave the scope of planners and buyers to increase,” he said. According to him, the two most important things for a market experiencing the downturn were – reach and superior targeting that would increase premiums by adjustability and technology. He believed that print and radio needed to re-evolve their value propositions so as all mediums could seamlessly move within each other.
For Ashok Venkatramani, in a recessionary market, any business that added value to its clients, customers and shareholders, would without doubt succeed. He believed that the agencies should never stop going to smaller towns and cities for business customers as a large chunk of these oft ignored areas were keen to enter the TV. The main focus, he said, should be the building and the strengthening of the brand. “Safe guarding is a necessity, but the agency should also be open to exploring other mediums and take some risks in the process. One needs to stretch the money to give better value, the lowest possible cost does not automatically mean the best possible value,” Venkatramani noted.
The worst may not be over
Tarun Rai, who had moved from the advertising industry into media, agreed with Venkatramani on the issue of value. He said, “During the recession, one had no option but to look at the value offering.” He maintained that his company did not compromise on its value offerings during recession. The next guideline, according to Rai, was that one needed to look at their own business model – were they sufficiently edged to handle an economic downturn or not. Most media companies in the US and some in India were too skewed towards a booming economy, thus when the downturn hit them, they were in trouble. Rai’s World Wide Media was strategically placed between different ventures that brought returns from all angles and salvaged the situation when recession hit.
Rai, however, warned that the worst might not be over as “in England people are talking of a serious double dip”. “It is okay to be cautious, but a knee jerk reaction leading to a drastic change in the business strategy could be detrimental to a company,” he said, adding, “The third thing that I have learned from the recession is that there is always a more efficient way of doing business. During the recession, we were forced to look at ourselves and take out all our inefficiencies. And the final thing that I have learned is – don’t panic. You might be driving the vehicle a little more slowly, looking around, being cautious but it is stupid to change your strategic direction.”
In reply to Anurag Batra’s question on his move from advertising to media, Rai said that he had moved from the message to the medium and that media agencies would soon be calling themselves communication agencies, but media was surely a bigger playground. Rai concluded that technological advancement was inevitable and one should make the best of that opportunity.
Build the client’s business well
Srinivasan Swamy, who had been part of the exchange4media Conclave in Bangalore last year, had said that clients were not the only ones to fire agencies, agencies fired clients as well. The three lessons that Swamy had to share were – one, businesses do not always move up, the break that the industry saw from the 15-20 per cent growth during the downturn showed that businesses could move both ways.
According to Swamy, the only thing that one could control was the cost and never the revenue. And finally, the only option we had was to build the client’s business well even during the downturn for everyone was looking at revenues, and if one could ensure that he serviced the client well, then he was bound to succeed even during an economic slump. Speaking on the policy that his company followed, Swamy said, “No client was allowed to be rude to the agency. A client could disagree, but not be disagreeable. If the client was rude to any member in the agency, then the client could go. We do business on our terms. It is not possible for an Indian enterprise to take root today and make it big. It is no longer a small man and a small business game. What could happen is that agencies could be available for purchase or acquisition and grow.”
When asked whether crowd-sourcing would reduce the agency, Suman Srivastava replied, “Crowd sourcing would not reduce the agency. Take the example of YouTube, a lot of content on YouTube is derivative of the work done by professionals from different industries. The famous Euro RSCG Avian baby commercial saw thousands of spoofs taking off, which proves that crowd sourcing is basically imitative, but there are only a handful of people who can create good content that is actually a big opportunity for the agency. The world is now looking at short form content, entertainment in one and a half or two minutes, which is an advantage for ad agencies to create entertaining messages.”
Restructuring and invention
The three lessons he wanted to share were that there was a difference between Bharat and India. While there was a recession happening in India, there was also a Bharat out there, and the clients who knew that continued to derive business and do well. For Srivastava, the recession was a great excuse where the smarter agencies cleaned up their homes and did the necessary restructuring. Finally, the recession had cut everything down to the bone, it had also exposed the tremendous capacity of the agencies as it pushed them to do things that they didn’t know they could.
For Apurva Purohit, what the recession taught the media agencies was to run the business efficiently, a lot of cost got cut and they had to strategise and plan for growth, though with a flatline budget. The second thing that she stressed upon ran along an old saying that ‘necessity is the mother of invention’. Purohit pointed out, “Recession taught us to be far more innovative. For example, the Radio City School of Broadcasting was set up to internally train employees and cut costs.” The third thing that she mentioned as a lesson was very important from the HR perspective. She said, “Prior to the slowdown, corporate India was really breeding a generation of grasshoppers – over-promoted, overpaid, under skilled managers and executives. The recession placed a well deserved slap on their faces. Today, there is a lot more realism in the way employees approach an organisation. Subscription revenue has always been defocused and media owners have always stressed on advertising, but today, advertising revenue is under pressure.”
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