'TV is a 2006 story with focus on branded entertainment. Who knows it might spin off into a side business?' : Ashutosh Srivastava - Group M South Asia CEO


Ashutosh Srivastava looks a man still getting used to the lonely at the top state he's been in since he took over from Andre Nair in October 2004 as Group M South Asia CEO. What he misses is the client - agency interactions and various pitches he spearheaded as head of MindShare India.

Since he stepped into his new role, Srivastava's mandate was to bring the individual agencies - MindShare, Maxus and Mediaedge:cia to the forefront rather than the holding company - Group M - hogging the limelight. At times the names Group M and MindShare have been interchangeable. This Srivastava feels has been harmful for the business and hence has started taking corrective measures for the same.

In a two part interview with Indiantelevision.com, he holds forth on the year gone by and what lies ahead. What he reveals is that one major focus area is going to be that of branded television programming.

Read on for more....

What has the year gone by been like and how has it been since you took over from Andre Nair in October 2004?

Broadly if I look back since I have taken over as Group M South Asia CEO, it is difficult to see any minuses.

Business growth, personal growth in getting into new things and challenges are by and large pluses. The minus is that this role is less client facing. This role is a lot more about internally managing business and talent and making sure that WPP's growth strategy is in place. Making sure that we are able to spot all opportunities outside of traditional areas and grow them and invest in the right ones.

Upsides are plenty: Transition was planned very well. We stepped into our new roles in October 2004 but we made the announcement in May.

Figuring out what clients want from media agencies. Start scaling up entertainment, digital, research and insight, micro marketing, data analytic. The seeds were all sown in 2003, in 2004 we were nurturing them and we saw the results last year. At that stage the role was to make sure that the initial plan was seen through to its culmination. That was pretty much the challenge last year.

The second was when we started in this country in the media business; there were so many conflicts between Ogilvy and JWT that we started with a two agency model from day one - MindShare and Maxus. So what got established was this overall WPP or Group M brand. It is very unusual because most of the countries where we have gone in, we have done so as a MindShare. Only in the last couple of years have the other agencies entered those countries and the scale is being leveraged. Here it was the other way round. One of the issues, which we saw and which we have begun to correct in 2005 is that Group M is not the brand that faces clients - it is MindShare or Maxus. We have put in concentrated efforts since last year to build our individual brands.

What are the brand differentiators between the four agencies of Group M - MindShare, Maxus, Mediaedge:cia and Mediacom? How would a client decide, which agency he wants for his brand?

As Group M, my real task in that situation would be to figure out what is the service need for this client. With MindShare it is pretty clear as the bulk of its revenues come from global clients. These are clients who basically look at an agency, which will manage their media with a lot of accountability. The agency is driven by clients such as Unilever and other FMCG majors, where their requirement is accountability. For them media is pretty much a science.

Maxus has positioned itself as a smaller boutique that is tailored to individual client needs. And its clients are very diverse like a Britannia, Hero Honda or Hutch, which are all poles apart and have different requirements. Each of them are heavily into creativity, being able to grab opportunities fast, being able to move very fast in the market and shut out competition even if it means paying more than them in order to gain that upper hand. So at Maxus, it all boils down to being street smart, creative and agile. The agency is totally in synch with all its clients' personalities. It has also has the huge buying clout of Group M so the clients are not really missing out on anything.

If we had to look at Mediaedge:cia, it still has to evolve. Globally, if I look at Mediaedge:cia, it is not as dependent on global businesses like MindShare is. MindShare's business model has been to go after clients and service them across. Whereas Mediaedge:cia still is dependent on local or regional clients. Its strength globally (which is what we are building here too) is great communication planning. However, the agency is weak on executing those communications in-house. But Mediaedge:cia does have an advantage of having Group M, which helps it in the execution. That's one reason why I expect them to be lot more successful here and grow much faster than they would have in other markets. Because again globally that non-traditional area of strength is there in India and a couple of other markets, but not across the world. More in Asia, less in Europe and very little in US. Consumer insight is the core of Mediaedge:cia's business.

In India, it does have a huge client base and hopefully at some point in time, the merger of TME will come through so that will further increase the client base. That will make Mediaedge:cia another large player in the market and yet different from a MindShare or a Maxus.

As far as Mediacom is concerned, we still have to understand the agency because by the time it integrates into Group M, it will be the end of the year. That's not a challenge that we are going to be taking on this year. It will be more of a 2007 thing. While we have begun to work along with them and help them in what are the Group M strength areas, the real integration will only start next year.

Like I said, the challenge has been that we do not want to keep Group M as the brand and in the public face. We want to scale that down and make it more like the holding company, which has two - three key functions. The financial structure remains within Group M, the investment and development of capabilities in all the growth areas of the future, Group M is the driver. Once those resources get developed, they move to the operating companies because the clients are sitting in the operating companies. Group M is more the incubator for developing all kind of new expertise and strengthening each of the four agencies.

We have been trying to correct the balance since last year so as not to have Group M but the agencies under it in the public eye. The feedback we received from the industry is that Group M and MindShare names are interchangeable, which is harmful for the business, so we are taking corrective measures.

In the WPP fold, Group M is really the star operations for the last couple of years be it in terms of client acquisitions or revenue growth.

The nontraditional activities of Group M started delivering since 2005 in terms of quantifiable revenues. What is the kind of growth you have seen last year and what is your projected growth for Group M by the end of 2006?

Yes it would be right to say that last year our specialist units starting contributing substantially in terms of revenues. There are a large number of advertisers today who have gone beyond television and print and hence there is a need for a service that can deliver beyond TV and print buying. The critical mass is there in the market and the tipping point came in 2005.

In 2005, in terms of the overall numbers we grew 25 per cent as a company, which was built on the media business. As a share of revenue, all our specialist divisions accounted for almost 20 - 21 per cent of our topline. In 2006, we expect it to close at somewhere closer to 30 per cent and our overall business to continue to grow at about 25 per cent this year too. That's because the market is expanding and we have acquired a whole lot of new clients who want all kinds of services and not just traditional TV and print buying. And on the back of those there is a huge growth coming because if we just went by market growth and inflation, then we will be stuck in the 10 - 13 per cent growth rut.

From the specialist units, there are ATG and Broadmind. If you had to split these into the kind of activities that we can expect from them in 2006, what would they be?

We are going to focus on two - three areas this year. The first is what we define as entertainment, sports and partnerships. These are both in the area of content as well as managing of sponsorships and a whole lot of 360 degree communication around it. That is under Suku's domain (Broadmind). Analytics, which is what we call business science is under Balu (ATG). These are the two big stories.

On the entertainment side, there are three growth areas. The first one being movies, which comprise both Bollywood (90 per cent) and Hollywood (10 per cent). A lot of work started here in co-marketing and co-promotions, scaled up quite a bit. Some of it has gone into integrating brand messages or product placements and there are a host of these that are lined up in the next 12 months.

We have close to 50 - 60 movie projects in hand wherein we have in-film placements, joint marketing, brand promotions along with the movie and a lot of spin off business from that. We are not going to get into representing celebrities but we will represent brands. It is not going to be a huge business but we will at least 10 - 12 such deals in a year.

We have commissioned IMRB to do a study for us called Celeb Zee, which tracks brand personalities of each of these celebrities. We have 300 clients across the country and there is always requirement for celebrities and we would use that study to match the brand's and celebrities' personalities. It is a growing business and is a spin-off of the foray into entertainment where the primary focus is to put brands and films together in various ways.

On the television side, we are doing similar stuff. Last year it was not on a large scale as most channels were worried that if they go the whole hog it creates problems. So we will have about 10 projects in a year.

It takes six months for concepts to actually get into production. We are working on all new original formats. We will also be exploring other platforms for our formats in the near future as and when the technology develops. The aim is to bring brands and entertainment together starting with television and moving on to other platforms.

At this point there are about six clients of ours like HLL, Britannia, Glaxo Smith Klein (GSK), Hutch, Hero Honda, Motorola and Pepsi who are all very kicked about it and talks are on with them at various stages around branded entertainment.

Before venturing out in the Hindi entertainment space, we have been experimenting with some of the concepts in the South market for the last couple of years. It started with GSK's brand Horlicks, with a couple of shows. Hero Honda wanted to enter the south because TVS is a big brand in the south, so they created a big event - a talent hunt show on television - in search for a 'hero' with Sun TV. It was a huge learning experience for us.

Television is a 2006 story with branded entertainment but as we learn the ropes we might get into pure commissioned programming as well because the capabilities are all there. I'm not ruling out that we won't get into pure production at some point in time but the focus is branded entertainment. Who knows it might get spun off into a side business.

The third area is brand activation. Again the question is whether a media agency should be getting into this or is it the domain of a creative agency? What I feel is that it doesn't matter because at the end of the day, it's just another way of touching the consumer. We are approaching it as developing some more communication channels.

We have not scaled it beyond five - six clients because we want to get the model right.

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