Covid second wave & IPL suspension came as double whammy for the industry: Shashi Sinha

As the second wave of COVID 19 starts to wane, we interview senior industry leaders and their 'Resilience Story' in the pandemic

e4m by Naziya Alvi Rahman
Updated: Jun 22, 2021 10:21 AM
The Resilience Story

In our inaugural session of 'The Resilience Story' series, e4m editor Naziya Alvi Rahman speaks to IPG Mediabrands' India CEO Shashi Sinha about understanding volatile consumer sentiments in the pandemic, charting the agency's recovery plans and going beyond business when the times are tough. 

Q: The second wave was more damaging in terms of personal loss and the overall sentiment. How much did it impact the ad industry considering that there was a general sense of despair for over two months?

Last 45 days to 60 days, we focussed more on our people. I'll come to the business part later. As you correctly said, it's affected people everywhere. So in our case, also, we had unfortunate situations where we have lost three employees and 20 plus family members. So, ensuring that people are taking care, that's been the focus.

To answer your specific question, Jan, Feb, March was alright. April was when the second wave hit and as IPL was on and is a big investment of advertising, April was originally alright. But May has been a collapse and was bad in 2020 too.

But this time, we're just pulling off a moving average from March and April. And I think June started off also with a lot of issues.

Q: Talking of COVID, we learnt that in IPG there was a specific COVID team that was created to help employees. If you can tell us more about the initiatives that you as an agency took to keep the trust and hope of your employees intact?

We have a large backup team, which does a lot of work for us all over the country. People were having problems of hospitalization, getting beds and oxygen. So, I realized that it's not enough because people were reaching out to HR.

 Every organization has large and good quality HR teams, but that's not enough. You need senior management intervention. So we created this COVID team. It doesn't matter whether you're looking for digital or offline or whatever, phenomenally resilient people who could actually reach out to their media partner media, contacts and help those in need of hospitalization.

IPG also gave us some money because there are times when insurance is not enough; everything was too expensive. So IPG also created a fund for us, where we were able to go in without questions being asked. So I think, all in all, it just about some support for people.

Q: Coming back to the business there's been a sense of despair and uncertainty. Did it prompt many brands to suspend pitches or simply extended their contracts with the incumbent agencies? How did you tackle the challenge of adding new business?

A lot of pitches have been paused. I don't know whether they will extend contracts. I suspect a lot of what you said will happen there. I understand the problem is only a specific one and all markets are not as badly affected. So they're certainly focused on taking care of our people, and ensuring people will come out of it.

At one point in time, we had 200 plus people and their families affected; it's come down to about 30- 40 or so. But I worry about mental health issues.

To answer your question, I think priorities in life are more important than business. But obviously, we have to get back to business and pitches. Some big and small pitches are happening globally.

Q: Going by your global results, you have still done fairly well. In the last quarter, your revenue increased by 2.8%. Your global CEO said that the company is positioned to deliver full-year organic growth of 5% to 6%. Now, what is India's role in this? And these numbers were predicted before the second wave. How much is it affected now?

So, IPG is a very strong American-based company. The American economy has actually bounced back, and therefore they have seen 3% to 5% growth. We saw that it was a very good position to be in.

India has always been a hybrid market. My CEO spoke to me about the COVID situation and I believe that they also have a mindset that India has been strong for them and this is the time to reach out.

The country needs certain support both not only physically but also psychologically. So, I think it’s very premature to talk about numbers and how we will support it, but I'm reasonably sure that India will bounce back. I think hopefully when people get vaccinated, things will start to stabilize for India and IPG.

Q: IPL is one of the big-ticket events for most brands, and it was called off midway, how much and in what ways did it affect the overall industry business?

IPL was a very good start for the industry. We as an agency bet big on IPL as we genuinely maintain that we believe in the power of IPL cricket. So it did hurt us.

May was a double whammy because not only did IPL go off for the right reasons, in my opinion, but also brands stopped advertising.

The good news is that the IPL is coming back in September around the festive time. I think like last year the last quarter was a jumpstart because of it and I suspect that will happen this time also.

I don't know about the whole world but I can speak for myself. A lot of our clients have promised to support and come back. In fact, some have promised enhanced support. I think IPL will actually drive the momentum.

Q: Which sectors do you think suffered the most in the second wave?

Almost everything was hit by from around 20th April until now. Much like last year, e-commerce was affected because they wanted to close down deliveries. Even consumer durables and FMCG were affected as the distribution companies were impacted last time.

This time, the distribution was better but the overall sentiment was low. There was so much narrative around positive cases and deaths so I think consumption came down. But I'm sure the consumer durable categories will bounce back faster.

However, I am worried that consumer sentiment is going to be affected badly since consumption is all about psychology. Because last time, people had not seen the pandemic this close, but sadly, this time they have. There was no one I know who's not seen any casualties.

I hope and pray I'm wrong, but I feel luxury categories will take time to come back. Who would want to go on holidays or buy expensive cars?

Will this dwindling consumer sentiment also impact the festive season?

It will in certain categories. Last time, everyone talked about revenge purchases. I think this time people will be careful because jobs are gone and uncertainty might last longer. So social insecurity is going to affect people. 

As someone who has spent more than three decades in this industry, what kind of consumer behaviour changes have you seen in the last one and a half years?

There was a rise in digital consumption even before the pandemic. However, I think there was a huge barrier in people's minds on shopping and e-commerce. This has definitely reduced. I think a big revolution will definitely happen. As I also referred to earlier, there was conspicuous consumption, which in the next two years will be moderated.

People may not spend on fancy socks, fancy holidays and all that. Society will ensure that there’s a certain amount of moderation. Indians have always been very value-conscious. I do think that the combination of being careful, with consumer consumption and digital e-commerce, is a very deadly intersection point. It allows us the privacy of the homes, where you can make purchases without others looking at you and evaluating your choices, and not be seen as flashy. So I think that's going to be great.

Post pandemic due to mental stress, there will be a fair degree of trauma. Hence if you give consumers some kind of relief, (some escapism) from the negative side, they will be able to make mindful, empathetic choices.

Q: Cannes was cancelled last year, and this year, we have it in its first digital version. How actively do you see agencies participating in the upcoming event, in the backdrop of what has happened in India in the last few months?

The awards are all about celebration and joy, but it (Cannes going digital) can also be construed as the awards for the sake of awards. But the worth is not realized as much, so this looks very flippant in my mind.

It’s one of the reasons why we cancelled the Goa fest. We could have easily thought about doing an online event but I felt this is not the right time. This is the time when people have so many challenges. That's one of the larger issues.

You are celebrating the work of a time when the country is going through hell. I personally don’t think it is Cannes but our mind-frame that is not ready for awards yet. 

Now that we are anticipating the third wave, how are you preparing your agency and your clients?

Health in my point of view is the most important thing. Vaccination is the first measure we're taking. As I said, we are encouraging people to get vaccinated. You won't be surprised about the views on vaccination in this country. In fact, before this meeting, I was on a call with my HR head. As the last round of vaccinations is tomorrow, I asked him to give me a report of how many people have gotten on board with the vaccinations and how many refused. And to see if I could possibly make a pitch to them so that they would be ready to come on tomorrow. To prove a point, I held back my vaccination and got it done on the company campus.  I wanted to show everyone that I'm doing it myself. 

Talking of business, you have to take it as it comes. But like I said, I worry not about a third wave but I worry about the larger sentiment -- what the second wave has done. All of us know people, friends, family, colleagues who have been affected. And that will have a lasting impression. That will take some time to go away. So third wave or not, we have to be careful. 

If you had to sum up your resilience story of the last year, what was it that kept you going? How did you survive this phase?

In times like these, you realize that we have a lot of people who have worked with the company forlong. Some of us have been here for more than 30 years in the same company. So the leadership team is very well bonded. Fortunately, our client relationships are also very long since you know everybody. We all rallied around each other. 

My favourite story comes from Delhi where one of our senior members Arun Sharma went out of the way to help our young colleague whom he had never met or even spoken to.

Her father-in-law needed oxygen, and Arun, in the peak lockdown drove almost 20km to pick that up and deliver it to her. It is a small story, and many people have done it. But it shows that someone he has neither met nor spoken to was ready to help in this hour of crisis.

I think it helps that we stay closely bonded, we know each other, we may not be “chuddy buddies”, but we definitely work with each other tightly and that we can relate to each other.

 

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