India is a remarkable market with enormous potential: Stephen Allan

Stephen Allan, Worldwide Chairman & CEO of MediaCom, and Dr Annurag Batra, Chairman & Editor-in-Chief, exchange4media and BW Businessworld, discussed the road ahead for media agencies

e4m by exchange4media Mumbai Bureau
Updated: Sep 27, 2019 3:28 PM
Stephen Allan and Batra

The e4m Conclave 2019 concluded the day with a very special discussion titled ‘Is this the era of Specialisation or Consolidation? Role of Media Agencies post 2020’. The audience latched onto to every word of the session given that the person at the centre of it was none other than Worldwide Chairman & CEO of MediaCom Stephen Allan. As an industry veteran, there could have been no one better to take the audience through a journey of where it all began for media agencies and what lies ahead. And asking all the pertinent questions was none other than Dr Annurag Batra, Chairman & Editor-in-Chief, exchange4media, and BW Businessworld. 

Dr Batra began by asking the question that is on everyone’s mind – in the debate on specialisation versus full service agency, where was the trend moving to?

Reminiscing about the 37 years of his professional life with MediaCom, Allan explained when he started, media specialism represented only 5 per cent of total advertising spends, so 95 per cent was going through ad agencies. He shared how he had spent the early part of his career trying to persuade clients about why specialism was the way to go. But when an agency called Zenith debuted, it changed everything because it then became the norm. And as the years evolved, virtually a 100 per cent media started going through a media specialist of one kind or another.

The reason for telling the story, said Allan, was because he is often asked how he is still around after all these years?

“I have constant sleepless nights because I’m always thinking and worrying about what do we need to do next, how do we remain relevant?” confessed Allan, adding, “Basically, what I have witnessed is, even if I go back even 20 years, it was simple. We had TV, radio, newspapers and a little bit of Out of Home. And then along came the internet that gave birth to a whole new generation of specialists, search specialists etc. Then, as it evolved, we saw specialists in social, specialists in mobile, and every time it was a wakeup call that reminded us that we needed to be better to specialise in these areas. And what you saw often was these companies selling or merging into the holding companies. Today, holding companies represent about 42 per cent of all advertising investment globally. So, the way I would describe it is integrated specialism,” shared Allan.

He further explained how one needed to put the customer first, and what clients were really looking for more than anything else was simplicity. And since different clients operate in different areas, there is no one size solution that fits all.

Pointing out how today, media agencies were not only competing against other agencies but big consultancies as well, Dr Batra then asked Allan about what was his view on how clients have started to look at Big 4, not just for investments but advice and consultancy.

Allan explained, “If you look at agencies versus consultancies, I think consultancies are at an earlier stage in their journey. If I take MediaCom, we have 120 offices in 85 countries, 9,000 people who are really totally engaged in finding the best and the right communications for our clients and implementation. And execution is vital and also specialist knowledge.”

Speaking about digital transformation as a present day buzzword, Dr Batra asked Allan about what MediaCom had done to be a partner for digital transformation?

“We are delivering incredible results for our clients,” said Allan. Citing the example of Peloton exercise bikes, which is about to fetch a valuation of 8 billion dollars, and how the company was not only thinking about how to make a better bike but how to make a better customer experience, he added, “It’s not technology for technology’s sake, it’s about what you do with technology and data.”

Given the tremendous draw India holds in the global market, the discussion then moved on to how well did Allan think India would do, and having seen growing markets, what did he think was unique about the country?

“I think India is a remarkable market with enormous potential,” said Allan without a moment of hesitation, adding, “There are several things that strike you. First of all - your GDP growth, even if it has slowed down in the recent months, it still makes you the fastest growing major market in the world. You’ve had a GDP growth of 7-8 per cent in the last few years.”

“The second thing is, if I look at the advertising investment as a percentage of GDP, in this market, it is 0.33 per cent. In a market like China, it is 0.7 per cent. So I think as agricultural areas and other people come into your consumer economy increasingly and come on to ecommerce, that’s going to help too. Then I think about digital penetration, in UK, 60 per cent of advertising investment goes online, in US, it’s 53 per cent, in India, it is 22 and a half per cent. You are still in the middle of a digital revolution.”

The session concluded with Dr Batra asking Allan for one prediction for the future of the business. Offering an interesting insight, Allan said, “All media will become addressable, which will mean that all addressable media becomes programmatic."

On whether that was a good or bad thing, he replied, "I think it’s good and bad. It’s good because anything that automates and takes boring stuff away allowing our people to be more creative is a great thing. There will be more innovation, more great campaigns. It is only bad in a sense that we know that machines can play tricks, so we have to invent new machines to control the other machines. But overall, I think it’s a good thing.”

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