Michael Kahn, CEO of Performics Worldwide, was in Mumbai recently. We caught up with him to get his thoughts on the changing nature of performance and digital marketing. He spoke about his belief that e-commerce platforms such as Amazon and Flipkart would compete with media publishers for eyeballs and share of ad revenues going forward. Kahn also spoke about the future path for Performics and the evolution of search marketing. Excerpts:
What are the guiding principles of Performics?
We are a performance marketing company and we will be celebrating our 20th anniversary next year. Our goal is to capture consumer demand wherever it is expressed across media and content environments. We serve biddable and programmatic, social, mobile search and display programs. We create content assets for SEO and marketplace visibility and at the end of the day, we help brands connect to consumers to understand their purchase decision journeys, to create demand for our clients and then to convert that demand into revenue.
How important is the Indian market for Performics from a global viewpoint?
The Indian market is incredibly important for us at three levels. The first is that there a couple of hundred folks as part of the Performics capability in India so we have an extremely large and diverse team. It is actually one of the top performance marketing groups in India. Secondly, it is a fast growing practice, growing, in terms of client acquisition and the size of the business at 30 per cent YoY for last couple of years. It is recognised as a market leader and has won a number of awards for marketing efficiency and brand storytelling and the team here is really strong because it serves, both, local clients in India, but it is also a high performance hub for our global clients who might the need the talent that is available in India. So, India is really important to Performics overall, which has 2600 employees in 57 countries.
In terms of revenue and team size where would India rank?
It is one of our top 5 markets. It is absolutely at the top of the list of countries we are present in and a priority location for us as well as being a dynamic market in terms of the work being done here.
What do you think is the future potential in the Indian market?
I think India right now is the fastest growing economy in the world. It also has the fastest growing population in the world and, at some point, it is going to have a population more than China. It is a place where you have all kinds of talent doing great performance marketing work, for local and global clients. The upside for the team here is huge because in the Indian marketplace digital has become more important, performance marketing has become more important, leveraging data and technology has become more important and I think that our Performics team is well suited to deliver on these points.
Could you tell us what is the kind of work you would like to see done in India?
The sort of work that Performics is doing in India includes paid search campaigns, programmatic display campaigns, mobile campaigns, creating user experiences and SEO and content solutions as well. The practice here is driving strategies and recommendations across paid, earned and owned media to connect with the consumer and drive outcomes that we want for the client. The other thing about the group is that they are working with all types of industries, whether it is travel brands, BFSI companies, etc. There is a massive number of brands that they have won here and they are serving the major brands in all these categories. This is what the group is doing today.
The vision of the future is that our entire business is based on something we call demand and response management. The whole thought of this is that we are driving performance across all media channels, online and offline. We are leveraging the data from the traffic we generate to create personalised user experiences and to take the demand that we have created and convert it to a revenue outcome. So, the vision for the business is to create end-to-end performance solutions for all types of media and content and we are building the capabilities to do that.
How do you determine the efficiency of offline content?
All the research today has shown a very high degree of relationship between TV and search in particular. People see something on TV and they immediately pick up their phone or laptop and do a search as a result of that stimulus. The second thing is that there are all kinds of tools and data available right now to help in attribution. What we are seeing is that the mass media has a direct impact on online media that someone uses it to complete a purchase. So, now the goal with our practice is to understand this behaviour and then go to work leveraging all those offline media investments to tie them into the online strategies to drive measurable outcome. There is measurement (for offline media) but it is available through media mix modelling and then through attribution measurement from one channel’s impact on another channel and the data exists to do this now.
Attribution seems to be something Indians still struggle with. What is your take on this?
Part of the journey of digital is the maturing of the marketplace and India is so dynamic, so entrepreneurial, so energetic, especially with all the new talent coming into the market. So, I think that attribution is just about the maturing of the marketplace. With all the smart people and tools available here, attribution will be a capability that everyone will understand more about. In other more mature markets, attribution modelling is a part of every engagement.
Performance has historically been associated with search. Is this something that you see changing with the new formats available today?
The agency started off in search, both SEM and SEO. Today we package all our solutions as performance media solutions, which is again creating and converting demand across mobile, social, display, search and offline channels. There is a huge amount of interest right now in marketplaces and commerce environments like Amazon; that’s a whole new channel to sell in now. And then equally on top of that, we are running all these capabilities to do things in content on owned and earned media. So, we have moved from what was once a search agency to a full service performance agency, in some respects, using all creative assets and media just like a general agency would do but applying direct response principles to it. So this is what we call demand and response management and the goal is to make this the cornerstone of the Performics business going forward.
Are acquisitions on the cards in India?
Performics has been growing at a double digit rate year on year. We have made acquisitions in the past which has helped us become the company that we are today. We made two in India ---- Resultrix and Convonix. They both serve global customers and they also serve their regional and Indian customers. So, right now, I would say that most of our growth will be organic growth coming from the teams that we have in place and the build up of new capabilities like demand and response management, offline media management for direct response outcomes, commerce and marketplace environments, etc. We probably will always think about acquisitions but we are very large right now and it will be more about taking advantage of all the teams, the talent and the assets that we have in place today and continue to grow at a fast pace.
Hypothetically, if you were considering an acquisition, what type of agency and what capabilities would you want to bring on board?
I would say it firstly it would be in the analytics area because we cannot get enough of talent to help us make sense of all the data that is available and how to leverage it for marketing performance. So, I would say analytics for sure. I would say capabilities that allow us to manage all types of media or create personalised user experiences on the other side would be interesting acquisitions as well.
So entities that can help us with our full media capabilities, entities that can help us serve personalised user experiences to the consumers, we are connecting with.
So there are always going to be an opportunity to think about acquisitions but I will tell you one thing about Performics now is that we are blessed to have amazing talent and capabilities so I think we will always look out for it (acquisition) but in a place like India, we already have all the assets in place, now it is about seeing those things brought to life and enhancing what the teams are doing today.
What are the trends you are seeing in the performance marketing space?
One is that everyone is focusing on performance marketing. So, even if you are a brand marketer, you are thinking what is the performance I am getting from my TV or outdoor campaigns.
The second is that we grew up as a performance media company focusing on search and today search has taken up all new forms. Obviously, mobile search has overtaken desktop search. You know have these commerce marketplaces like Amazon that are becoming huge environments to sell in. The future will now include voice activated bots that will sit in people’s homes that become an interactive way to do search and buy products in a different way. So search is going through a transformation and the way brands are found has gone beyond just a Google and that kind of historical search is now going in a very different way. So much of the marketplace has been focussed on media solutions and I think more and more the focus will be on content solutions and how owned and earned assets can be leveraged to drive a purchase decision. For Performics, the aim is to build an end-to-end revenue generation engine for our clients, a demand and response management system where we are capturing demand across media environments, content and serving personalized experiences that lead to a satisfied customer relationship.
You mentioned commerce marketplaces a number of times. How big of an opportunity are these?
Over the last few years, starting in geographies like the US and China, entities like Alibaba and Amazon have become huge environments for consumers to transact in and to find the products they want to buy, rather than to go to a search engine or to a website. Today, in many instances, consumers are starting on these platforms to find what they want to buy. So, these platforms have demand and consumer eyeballs. We got in early with Alibaba and Amazon to build our marketplace capabilities, which included advertising opportunities, content and SEO opportunities, etc., which has enabled us to drive our clients’ sales on these platforms. In many cases, because these are buying environments, they are performing better than other channels.
India is going to be a hub for these capabilities. In our world, there is all the search, social and mobile we have done as a performance company, there is offline that we spoke about and I think the center of the storm going forward will be these marketplaces and we think these will one of the fastest growing parts of our business and so we are making major investments in this area.