Starcom in India is on a winning streak, pocketing large clients and setting up umpteen specialist units, and this has got the media fraternity abuzz. Starcom Mediavest Group CEO South Asia Ravi Kiran takes some time out for Indiantelevision's Renelle Snelleksz and Sujatha Shreedharan to explain, "The method to our madness."

Excerpts:

Following the launch of several specialist divisions including Relay, Enhance, Xpanse etc (there are more coming), what have been their deliveries and have these units contributed to overall growth? Do they match up to the manpower and investment that each of these separate divisions require?
Although we gave them a strong push at launch we have not been able to keep you informed about their progression and that would account for poor marketing on our part, but the truth is that there is a lot that has been happening.

Let me give you example of the outcome of introducing multiple specialized units. In 2003, if we made Rs 100, 0.4 per cent came form our specialist units. Then in 2004 which we launched Star Sight, Relay and re-launched Starcom IP that figure moved up to 4 per cent. In 2005 it went up further to 17 per cent and in 2006 we have just closed at 31 per cent contributing to the overall revenue. For 2007 we are targeting a 40 per cent contribution from these business units.

There is a method to our madness even in launching so many specialist agencies and I think we recognized two or three years ago that 'consumer attention' will be at a premium in the future.

Some of the innovations that our units have come up with to grab 'consumer attention' include Xpanse, which has recently patented a technology called 'Wall Tattoo,' which replaces hand paintings and revolutionizes the way rural outdoor is being done, giving it a vinyl like finish.

While on the other hand, for our client Western Union we decided to use a mobile application by which customers are pointed to the closest outlet through an SMS. As you can see its the smaller clients that have been most receptive to innovations.

You've talked about the innovations by smaller clients. At the same time most media agencies are either taking on bigger clients or opening specialist agencies for large clients…
We have been asked this question very often. But the fact is that size is just one criteria that we look at when we partner with our clients. Moreover, it constitutes only 20 per cent of the five different criteria taken into account while partnering with a client. Take a look at the upcoming sectors - Insurance, finance, telecom - they are all what we call tomorrow ready clients. But they are by no means small clients.

What we usually ask ourselves is whether the client has the right marketing orientation? Clients who genuinely feel that an agency is their partner. I think 'partnership' is the most clichéd word in our business. Most people are of the opinion that 'if they say you are the partner, then it means that you take the command' but it doesn't work that way.

I think I have been quoted on this in the past as well - We have never been known to drop our prices in our six years of existence. Never! If we had done that, we could have been much larger than we are. I must also say that in the last three months alone, we must have added about 70 per cent volume to our mainstream divisions. I must also mention that for the last few months we have had no speculative pitches. Simply put it means, we ask our clients to choose us based on our past work instead of pulling out our existing resources to create an idea for a potential client.

We get clients purely based on the work we've done, and not because we are ready to open new divisions for them. We sit down with our clients prior to the pitch in a sort of informal meeting after which either party may decide not to pursue the pitch further. This meeting is important because here's when we decide if we can be long term partners.

In the past, most of the planners, us included, might have made the mistake of being part of a partnership for which we have no respect. It's ironical how everybody talks about long term partners and then conveniently change agencies every two-three years. All the more reason for us to say that in the last three years we have not lost a single client. I think clients really see value in the through the line recommendations we make. I am not denying that there have been problems, but we've always managed to come to the table and thrash it out.

What criteria do you keep in mind while launching a division like FutureWorks? Does the size of the client dictate the need for a separate division?
Like I have mentioned, the size of the client or account is just one of the criteria. And you must understand that taking on a large client is sometimes a risky exercise. Many agencies won't talk about it, but taking on a large client is dangerous because they tend to convert an agency into a factory churning out assembly line work and mindless plans. We are very careful about the large clients we take and we should know best. We have some of the biggest clients on board. The FutureWorks division is actually based on our International General Motor works division with 500 people. It is one of our largest clients with a billing of $ 3.6 billion.

Everybody wants large clients and why not! But if you are not careful, very soon you'll be regretting that the agency is not doing work that it can be proud of.

To us FutureWorks is not just a large client's unit. It is very clearly a retail focus unit. If it wasn't Futuregroup or FutureWorks, it could have been any other group providing multiple services.

But let me emphasize, the focus would have been on 'retail' not on 'large'.

Starcom has been actively looking at setting up offices in Pakistan, Bangladesh and Sri Lanka to extend its footprint. What is the progress on that front and what does the market in these places look like?
We set up our office in Sri Lanka at the end of January 2006. We took a different path there and instead of taking any business that came our way; we waited for the right clients. The media there is in a very different phase of evolution, so we had to train our staff there accordingly.

The Pakistan operations took a bit of time since we had to get about two to three agencies but it will be launched in about 2 weeks from now. We are waiting for our visa clearances.

The Bangladesh office has also been set up and you should hear about a formal launch soon.

The truth is that these are very small markets. Having said that, many of our clients are now basing themselves here, so it has become imperative to be there ourselves - either on time with them or before time.

How will Starcom's business be split vis-à-vis print/ TV/ FM/outdoors / Internet, etc?
Take these as estimates. Last year, 31 per cent of our revenues came from specialist divisions. (Of the remaining 70 per cent) We are fairly television heavy at 55 per cent, print would be around 30 per cent and radio, cinema, etc would be at 15 per cent.

Could you describe the current media scenario in India? Are clients showing an inclination towards new media (digital, internet, mobile and retail) or do they continue to be comfortable with traditional forms?
I would like to turn the question around to focus not on the clients and media but rather on the consumer. Consumers are quickly changing and have less attention today than ever before, having greater choices in brands, services and media, thus putting them in control. Although people argue that India is nowhere in comparison to developed markets, however the media changes over the last couple of years reflect the behavioral changes of consumers. The core challenge that marketers have today, is to trap and retain this consumer attention. However, we often tend to lose ourselves in the system and forget the cause, but this is the cause and everything else will flow from here

The fact that there is more media fragmentation, consumers are more flirtatious than in the past, advertising and communication fatigue also seems to be setting in, and advertisers are no longer content with the traditional ways of reaching consumers. This is the outcome of limited consumer attention. The way of communicating to the consumer has evolved with what is called the 'exposure' model, to expose the communication to the consumer in the most cost effective manner and stretch the rupee. However, we as communication practitioners are now trying to move to the next level of 'engagement,' to expose the commercial to the consumer when he is most attentive and receptive. The outcome of engagement is liking or experience to create a connection with the brand so that they can interact in a preferential manner. We are thus moving from 'counting' the number of consumers to 'connecting' with them.

In fact, it is now well documented and there also a book titled the Attention Economy.

While TV and print continue to dominate in our media mix, consumers want to do more than just that. Recently, the biggest shows on TV have been dropping in their average ratings and if you think that it's mainly a Star, Zee and Sony game, truth is, its much bigger than that. If consumers are moving all over the place and we put our spots only on TV it does not make sense. This is why we started putting together these separate units to develop core competencies to tap consumers wherever they go.

With the same objective of reaching the consumer at every possible touch point - Doesn't this only increase what you call 'consumer fatigue?'
Well fatigue means boredom, so one part of the challenge is how we deliver and present the communication to the consumer. We are convinced that then future is about 'creative engagement' and therefore it is about how you use the medium. The communication must be contextual so that the brand message is heightened within a particular context or time.

It is however, to create our own game which aims to be able to deliver engaging consumer connections. If you want to deliver a function you have to have talent to do that. If we had continued to take up people from media alone we would have failed because media people are coded to think in a particular mathematical way, so we had to induct people from a broad spectrum of fields to be able to deliver that product.

In about 2001 we saw that while one could negotiate a lot based on the game of volume, size and the bigger is better policy, if you are negotiating the wrong thing, in any case your days are numbered. That's why we want to be known as a company that attempts to understand how consumers take decisions about brands, how different contacts can influence their decision and be ready with skill sets that are required to impact that decision. In 2004 we mainly started the other new units that would help us deliver connections in a world that we believe is today and tomorrow. The most scarce resource in this context is not money and material but consumer attention.

As a media planner how do you view the emerging radio scenario?
I don't think we are biased towards any particular media. If radio allows our clients to reach out and connect to audiences, we will look at radio. Radio's potential to be more local and interactive needs to be explored more. What also excites us is radio's ability to allow consumer's to imagine a product. So that we can create a perception for our product more easily on radio.

But my problem with radio is that currently most of it is "undifferentiated". So you look at clients who view the various radio options in front of them and haggle over prices before moving on to a cheaper option. I find that kind of marketing absolutely naïve. So first of all radio stations need to start differentiating. Identifying or judging their differentiations is not my job, nor my agency's job. And no, radio needs to understand that it can't differentiate based on RJs alone.

Compare radio advertising in the developed markets. Apparently a study says that it takes about 8-10 seconds to actually sink in the message of a radio spot and about the same time to assimilate it and move on. That leaves the advertiser with about 8-10 seconds in the middle to actually capture listener attention. Therefore in the West, you have radio spots with 60 to 90 second duration. Long enough to be heard. We don't do that yet in India.

In India, radio advertising itself has to evolve. We tried an innovative concept with World Space and Lage Raho Munnabhai for an in-film placement. But if advertising agencies still come up with some 70s film line like 'mere paas maa hai, tumhare paas kya hai' in 2007 - that is ridiculous.

The debate over aMap has been heating up in recent times. What is your take on it and how has the industry responded to a dual currency of measurement?
I don't know about the general reactions, but I can say this much - the response has not been as aMap would have liked. I am being cautious here in my assumptions though. aMap does not seem to have either been cowed down or deterred by market reactions. I think it boils down to a struggle as far as the industry is concerned. We are asking ourselves should we have more than one way of measurement and the answer lies between A and B.

What is the scenario like Internationally?
Internationally, there are different approaches. For example in a country like Singapore, there are two currencies both completely funded by the media owners. Besides I don't think there's one right answer. It's a case of what each market prefers. For instance we do have two currencies in readership measurement.

The IRS and NRS. But that itself has been the cause of endless debate?
As far as we are concerned, IRS works better for us. There was a time when we used both of them. But we found the IRS more consistent, innovative and transparent.

Coming back to aMap, I am not sure if agencies are buying them yet. Or if they are, it is in conjunction with Tam and more as a reference point. But the truth is that it has brought about competition especially with its daily reporting of KBC ratings.

A broadcaster could need that kind of overnight ratings in case he needs to fix something quickly. But as of now agencies don't have to do that kind of quick fix measures.

Also, we need to actively look at measurements based on demographics alone and look beyond to including psychographics as well.

Lastly, given the current scenario in media, has there been a client that has given you personal satisfaction in terms of innovative marketing?
That would have to be Western Union. I mean I would rather have a few such clients than unimaginative large clients. But that said, a lot of our older , large clients have also started innovating. Newer clients adapt far more easily. While the older clients are not exactly lagging behind, there's just too much unlearning there that needs to be done. Sometimes our own knowledge holds us back.