Friday, December 14, 2007

Dialogue@Exchange4media.com

"The Indian consumer and culture have changed. They have become more remixed, where we are taking some aspects of Anglo-Saxon and mixing it with Indian culture. I believe there isn't any other agency that is doing brilliant work of consistently talking to this new remixed consumer. Our opportunity is to be this agency that talks to this remixed consumer in the most relevant way and offer creative solutions based on the insights that we get from the remixed generation."

Suman Srivastava, CEO, Euro RSCG


Suman Srivastava, a graduate from IIM Ahmedabad, is the CEO of Euro RSCG India. He joined Lowe in 1987 where he spent eight years. In 1994, Srivastava moved to SSC&B Lintas and was instrumental in building the agency. He left SSC&B Lintas to join Euro RSCG in 1996. Since then, he has been spearheading the agency's India operations.

In conversation with Rishi Vora of exchange4media, Srivastava talks about the challenges facing the advertising industry. Excerpts:


Q.

You have been in the advertising industry since 1987. How do you think has the industry evolved since the days you started your career in advertising?



A.

The biggest change that has taken place in the industry is that we have moved from the commission-based revenue model to one that is fee-based. Today we have more focus on integrated communication rather than purely advertising. Plus, unlike the earlier days, there are a lot of young people today who want to get into the industry, and thus the position of advertising as an industry has changed, in terms of scouting talent. Today talent is available and you just have to recogise, groom and retain.

Another big change is that Indian agencies now have integrated with their global counterparts, unlike before, when a local branch of an international agency had nothing to do with the operations of its parent company. There is much more equity ownership today; we see a lot of interaction with global network CEOs who are now visiting their India offices on a regular basis. To put it precisely, I think the importance of India in the global network has increased.


Q.

I understand that the market in the early 1990s was emerging, and since then there has been a lot of changes in the industry. Has the industry matured to some extent? Where do you see the revenue curve of the industry going?



A.

I don't think the market has matured. I think we are in the early growth stage of our development. If you look at any parameter that gives you an idea of ad revenues, we are way lower than even our neighbouring countries like South East Asia or the Middle East. Plus, if you compare the industry with other emerging markets, you would see that our spends are comparatively lower. I think the industry is growing pretty rapidly if you look at the ad spends of last two years. I think our industry has a lot more years of growth left before we can call it a matured one.

The industry is more multi-dimensional, and I think we are only getting more professional in our approaches. The quality of our work over the years has improved dramatically. Most importantly, we now have an Indian way of advertising that is not a derivative of an American or Anglo-Saxon way. But there's so much more to understand, like the insights into the Indian consumers. I am saying this because there have been a few examples, which are not really Indian insights but are adaptations from the West. I would argue that most advertising professionals are not bothered to go out and meet consumers to get insights.


Q.

As you say that ad spends are less, do you indicate that ad rates are lower in the industry as compared to international standards?



A.

That's true. The rates are much way lower. Forget the US, the ad spends that we have in India are lower than even the Middle East. Also, the reach of our media is inadequate and low. The rates are lower, the compensation agencies get is lower, and hence the overall spending is also low. These are early days of development of the Indian economy, and as the economy develops and competition increases, the Indian communication industry will get larger and professional in approach.


Q.

What is the average agency compensation in the industry? How much is yours?



A.

For us, more than 70 per cent of the total earnings come from fees, while the remaining comes from production. The media commission and the share of creative agencies have become very small. Also, media agencies are working on flat fees rather than commission. This is the change that has taken place in the industry, and I think it's a good change.


Q.

There is a rift between media and creative. Do you think the two should merge? What do you think is good for the industry?



A.

I think this rift will continue to exist for a long time. But if you ask me what is good, I certainly believe that both media and the creative have to merge, and there is no other way out. We keep on saying that integration is a big story. But the biggest integration that clients want is that of media and creative. When will this happen is a difficult question to answer. But I am sure this will happen with some changes. Let's say that Euro RSCG in New York has a designation such as 'Creative Director-Media' and his job is to think of innovation in media. So clearly if you break up the media function, there is a strategy part of media, a creative part, a trading and negotiating part, and then the operations part. I think strategy and creative parts of media is something that creative agencies have to offer their clients.


Q.

Do you think the buying pattern of media will change over a period of time?



A.

The buying aspects of the media, whether that too comes back or goes to a client, is what we have to see. For instance, when clients start buying from media channels, transactions become cleaner. You may never know that we may have a completely different set of model in future.


Q.

What do you think are the major loopholes for a media agency in India?



A.

One of the big issues for a media agency is the amount of 'outstandings' we have in the industry today. If one client defaults, then there is complete chaos for the media agency. So may be in the future there will be some way to ensure that there are no losses from the outstandings. Would there be brokers, financial companies or insurance agencies that would step in to ensure media owners and media agencies against non-payment? One doesn't know how things would evolve.

I think it is naïve to think that we will go back to the kind of an integrated agency that existed 10 years ago. However, I don't think the agency structures have ceased to evolve and there will be more changes as we go forward.


Q.

How have you seen Euro evolve and grow under your leadership since 1996?



A.

Euro has done very well. From 1995 to 1997, we doubled; and when I took over, I had informed the media that my target was 2x3y, which was to double the revenue in three years. We have actually done it 2x2y –we have doubled in two years. Now whether we can keep this momentum on is something we really don't know. But frankly, we have been lucky that we have grown while there was tremendous growth in the industry and in the economy.

On the side of the creative products, I think we have done well in the last year and half. We have done several pieces of work that I am proud of, like the Voltas campaign, our works for Red FM and Cobra, the ongoing Mac Lubricants campaign with Dhoni. We have just released a campaign on Volvo, which again is very interesting.

At Euro, we have also changed the way we practice. We now have only one P&L for each of our regions –Mumbai, Delhi and South – and all services now report to the Director of the respective regions. The marketing and PR services offer true integration to clients. Moreover, our 'Bunty Syndrome' is an example of how new things create thought leadership in their respective category.


Q.

What was your vision for Euro RSCG when you joined the agency? How far have you reached in achieving this vision?



A.

This thing called vision scares me a little bit. I don't think I took this job to change things. Euro RSCG was performing well those days and it was a question of just continuing the good work. But there were a several things we needed to do. We had to grow and improve our creative product. We set ourselves short-term targets and we have achieved some. The biggest thing that we have done is improved the image of the agency. Our reality is much better than our perception. I think this is good in a way, but that is one area we are working on.


Q.

Euro RSCG is big internationally, but not so in India. Your comments...



A.

While we are one of the largest agencies, we actually have an image problem in many parts of the world. The reason is that in many of the developed markets, we were not known as Euro RSCG since we grew by acquisitions in countries like South East Asia, New York and some others.

It is only a few yeas ago that we made the transition of being known as the Euro RSCG network. We are still a teenage brand with 16 years of international presence and having completed 12 years in India. If you compare this with other big agencies in India, most of them have been in existence since 50-60 years. Euro started in France and Europe, and is very strong there. But in the US, we are slowly and gradually moving towards being one of the best agencies there.


Q.

What is the Euro India philosophy?



A.

We are trying to evolve what I like to call 'remixed philosophy'. Twenty years ago when I started my career in advertising, good advertising was a derivative of the Anglo-Saxon and the very English kind. Subsequently, Indian advertising has developed what I would like to call 'Hindi idiom', which at least becomes our own medium.

The Indian consumer and culture have changed. They have become more remixed, where we are taking some aspects of Anglo-Saxon and mixing it with Indian culture. I believe there isn't any other agency that is doing brilliant work of consistently talking to this new remixed consumer. Our opportunity is to be this agency that talks to this remixed consumer in the most relevant way and offer creative solutions based on the insights that we get from the remixed generation.


Q.

Euro positions itself to be different internationally. How do you differentiate from your Indian counterparts?



A.

Globally, our philosophy is 'future first'. We can predict the future and because of our tools like 'Prosumer' and other such studies, and because these tools tend to predict the behaviour of consumers in future, we can help our clients in targeting their consumers in a better way. We are taking this same philosophy forward in India, and this is how we are differentiating with our Indian counterparts.


Q.

We have not seen a star rising from Euro RSCG India like we have a few in the industry. Your comments...



A.

Stars take some time in making. Prasoon took 20 years, so as Piyush and others. Ogilvy took many years in order to change itself from a middle-of-the-road agency into being the creative machine that it is. Lowe was certainly not considered as a creative hot shop as it is considered today. All the big agencies that we see today have evolved over a period of years. I am sure that our stars will come from within, just the way Piyush and Balki were born from within their respective agency structures. I am sure we would be able to reach a position, say after a few years, when people would say that the best stars are produced from within Euro RSCG.


Q.

Please give your comments on the trend of creative people taking the top position...



A.

I don't think that it is about saying that the top job needs to be for someone who is in creative, a media planner or anybody else. Finally when you get to the top, you need to be everything. You need to have the respect of everyone in the agency, and be able to motivate employees. There is a set of leadership skills, and the best person would be the one who has the ability to perform in all the roles.


Q.

There is a lack of creative talent in the industry. How do you ensure retaining your employees?



A.

We are doing a lot to attract and retain. Finally, people blossom when you train them, give them responsibilities and more opportunities. Euro people are valued in the industry and people pick them on for higher salaries in terms of both strategic and creative abilities.


Q.

Please give your views on the new media and the digital landscape...



A.

To me, new media is not just Internet and mobile. For me, malls and multiplexes are the most exciting new media that India has seen recently. The Internet is important for prosumers, and for the mass, mobile and mediums like malls are more important. The way Indian consumers would react to new media is different from the way other markets have. We would continue to be on traditional media like print and TV, but at the same time we would also look at the other new media.


Q.

What are your contributions going to be to ‘Leap’ and ‘Life’?



A.

There are people who want strategic recommendations, who at this point are not interested in integrated solutions; they may be looking at brand architecture, corporate identity and solutions. 'Leap' does all this very well. Similarly, 'Life' looks at the healthcare industry and other opportunities that it can create within the healthcare industry. There are various sectors like retail that are growing in India. On a broader note, the idea is to identify these sectors and offer specialist solutions for those who are looking for it.



This is an interview that I gave to Exchange4media.com. This appeared in the week of December 8, 2007.

1 comment:

Ajay said...

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regards,

Ajay Kumar Khaitan
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