35% of our total revenue comes from non-traditional sources: Tarun Rai

The Chairman & Group CEO of Wunderman Thompson, South Asia, Rai says that the dynamics of the JWT-Wunderman merger in India was rather easy compared to some other parts of the world

e4m by Misbaah Mansuri
Updated: Mar 25, 2020 9:44 AM
Tarun Rai

It was last year around February end that the global merger between J Walter Thompson and Wunderman came into effect in India under a new entity called Wunderman Thompson India. South Asia, which includes India, became the second region to implement the new identity after the US. So when JWT, a 90-year-old agency which saw some of the greatest advertising minds, merged with Wunderman, one of the youngest ad agencies in India, Tarun Rai – Chairman and Group CEO, Wunderman Thompson, South Asia had a huge task ahead of him. In conversation with exchange4media, he speaks about his big takeaways from the one-year journey of Wunderman Thompson, its focus areas and achievements from a P&L perspective, new businesses standpoint and more.

 Edited excerpts below:

When you look back at Wunderman Thompson’s journey through the last year, what are the big takeaways that it has taught you about agency mergers and navigating through the turbulent landscape?

The most important takeaway is that while we were busy with our mega-merger of two organisations - 20,000 people, across 200 markets and a host of capabilities - we had to remember that we needed to stay focussed on our clients.

In fact, we were changing engines – or in this case, adding a new engine – while flying high. We didn’t have the luxury to park the plane in a hangar for repairs.  There is a danger for organisations in the midst of their own change to become inward-looking and take their focus off their clients. We were extremely conscious of this and made sure that our focus remained on our clients and their business while we built our new company.

In India, our merger was quick and seamless. We were lucky that Wunderman was already collocated with us in New Delhi and Mumbai due to real estate reasons. Compared to JWT, they were a much smaller team here. The dynamics of the merger, therefore, were rather easy compared to some other parts of the world.

It is because of these reasons that the Wunderman Thompson brand was launched in India only days after the launch in New York which was the first office to launch. We announced our new, merged company and identity by the end of February.  We, therefore, had almost the entire year to manage the transition and business, and also to build a robust, new culture.

It helped that the merger was received by our employees with lots of enthusiasm. We were now the biggest agency in the world. With new capability came reskilling of our people and a lot of attention and resources devoted to training. While it is still WIP and building a new culture is an ongoing process, we are well on our way.

 What according to you helped the agency grow despite the economy struggling due to the slowdown? What was your strategy to tackle it?

 In an economy that has slowed down, it is important to look for both organic and inorganic growth. With the new capabilities that came with Wunderman, we could cross-sell better to our existing clients. We, as a result, got a lot of ‘new business’ from our existing clients. The new capabilities and our unique positioning also helped us get inorganic new business. We won over 100 new assignments from our clients in the year which is quite an incredible achievement.

What’s the biggest cultural challenge in bringing together a creative and digital agency?

 People make culture. And the biggest challenge is reskilling and retraining our people. And, very importantly, to be able to get new talent with new capabilities into the organisation to act as catalysts for change. This is not easy. I have always maintained that people like to hire people like themselves. It is easier and is comfortable.

So when you have a very large number of so-called ‘traditional’ staff, to get them to hire ‘non-traditional’ people with new capabilities is not easy. I have been putting a lot of emphasis on this and, together with my Leadership Team and our head of Talent, we agreed that for every new job we will try our best to hire people from non-agency backgrounds. We have been met with success but are continuing to pay close attention to it.

  What was one of the most surprisingly difficult things to navigate about the merger?

 Change is good but is never easy. While both organisations are from the same group, they have distinctly different cultures. It also has to do with the nature of the two companies’ businesses. And also their heritage. One is over 150 years old and the other much younger. Therefore, it needs work and attention. The challenge also was to prevent the organisation to get too internally focussed at the cost of taking the eye off our clients’ business. I believe, we managed that very successfully.

 How does the merger resonate culturally today?

 It is still WIP but a strong new culture is already evident. Our people realise that we have a unique proposition compared to our competitors and that we are genuinely a ‘new breed of agency’. That we can truly offer an end-to-end solution to our clients. For our people, we are a fantastic place to learn strategic planning and brand building and also, be trained in the latest developments – from e-commerce to MarTech. It is a great place to fast track careers.

 How much business is added by your digital wings Hungama Digital Services and Mirum in the overall business of Wunderman Thompson Group in India?

 Our digital business has been growing at over 25 per cent CAGR over the last four years. This is a fantastic pace, especially when the economy is not in the best shape. Overall, 35 per cent of our total revenues, now, are from non-traditional sources and I believe we will be at a 50-50 ratio in a couple of years.

 From a revenue and P&L standpoint, how was 2019 for the agency and is the expected growth for 2020?

 We had got used to 20 per cent growth in revenue and profits so, in comparison, 2019 was a bit muted due to the economic slowdown. But we made up by aggressively going for new business, and the 100 new assignments are proof of that. 2020 started off extremely well for us and we were on target to achieve double-digit growth. The Coronavirus put a spanner in the works and we will have to wait to see what its impact is going to be on business and our targets for the year.

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