| Interview with WPP
marketing communications south Asia CEO Andre Nair
I'm not going to get more audiences, why should I pay more?"
on 10 May 2003
What does India's most powerful media independent have to offer
on conditional access; on Sars; on the payouts being made to television
producers; on IRS? How does this media powerhouse stay in touch
with its customers?
this and more WPP Marketing Communications CEO South Asia Andre
Nair laid on the table in a no-holds-barred conversation
with indiantelevision.com's Thomas Abraham, in this the conclusion
of a two-part interview.
we'd spoken last you'd mentioned oil prices internationally and
the introduction of VAT domestically as being key issues that will
affect this year's business? Well oil prices are down and VAT has
been deferred so what is your reading now?
Regarding VAT, remember what I said the last time was - it is going
to happen. The government themselves are saying that this is definitely
going to happen. It is a more a question of how. The issue is how
is it being explained to people, how is the mechanism going to work.
There is still little clarity on that which is why you find interests
fighting against VAT.
are a lot or people out there, retailers in particular, who are
genuinely clueless as to how they are going to introduce this and
what it actually means. This is as much as I can say until there
is further clarity.
While oil prices are down the bigger problem is SARS right now.
Where are we on this businesswise?
are back to where we were before the Iraq war. The war just raised
a number of questions. We had a war that lasted 30 days and therefore
the effects are short term.
far as SARS is concerned, you look at the situation in Hong Kong
and you have to ask yourself how did it hurt business in general?
Yes, Hong Kong and Singapore have been badly affected.
meets and conferences have been cancelled. Tourism has been hit.
Cathay Pacific has a load of 33 per cent after having been voted
airline of the year last year. There has been a very severe effect
on business as a result of SARS.
think that the media coverage was more virulent than the disease
itself. Excessive hype has been created around a disease, which
while having a high infection rate has a mortality rate as low as
three to four per cent. The media just went berserk.
has said that India is SARS free at least for the time being. In
India media coverage did not go berserk the way it did elsewhere.
This could be because it is not a priority as they have other more
important issues to report about. Lets hope nothing drastic happens.
We can spend much time contemplating the effect of widespread SARS
infection in India but until, God forbid, that happens, such contemplation
problem of loss of creativity or lack of attention or lack
of customisation can exist whether a company is large or small"
to Mindshare & Maximize themselves, when your scale of operations
is so big, how do you stay in touch with the ground? Isn't this
a perfect recipe for insensitivity to clients' unique needs? I refer
here to smaller clients and not the Pepsi's and Hindustan Lever's.
We are a large organisation and for us the issue is not just
staying in touch with our clients but actually servicing our customers
to build healthy and enduring relationships. So I would interpret
your question of how do I keep in touch with my clients as how do
I build and maintain healthy client relationships. It is very important
and is one of our strategic priorities for this year.
do this in a number of ways
Firstly our structure consists of three operating companies. Each
company has their own business plans, their own KPIs (key performance
indicators). Therefore, since each company has its own distinct
character we are not one large faceless organisation.
it's a issue of changing mindsets. Client service has always been
thought of as a department within an ad agency- the account service
department. Client service is not a department. It is part of what
we all do in a service industry - as important as the media specialist
help change that mindset, we have set up a series of training modules
on client service.
has to come with accountability. So thirdly, our managers have it
down in their personal KPIs about building & maintaining healthy
client relationships. Their performance is ultimately judged according
to the state of the client relationship.
on the agency's performance and thus the health of the client agency
relationship is vital. So instituting appropriate mechanisms to
gauge the character of the customer agency relationship is the next
step. The customer's point of view on the nature and depth of that
relationship is vital. He is the end recipient of that relationship
- he has to derive benefit. Therefore the performance of the agency
needs to be evaluated.
clients have their own format to measure an agency performance and
service is not a department. It is part of what we all do
in a service industry - as important as the media specialist
feel that most client appraisals don't measure enough or are not
specific enough for media specialist agencies. So, we have developed
and introduced a scheme that covers all aspects of a media specialist
you look at media, anything that has to do with numbers is eminently
measurable and thus quantifiable and so it's easier to judge. At
MindShare and Maximize, we've taken this a step further. The key
is to create a series of SMART KPI's at the start of the year and
then assess performance against them at least twice a year.
the quantifiable aspect, we create a work plan together with our
clients. We start the year by developing a detailed SMART work plan
by quarter. These are clear statements laid out before the client
regarding what needs to be done. All statements have deadlines as
well as people responsible for getting the job done. At the end
of each quarter plans are reviewed.
this is only covers the easily quantifiable side of performance
The other side of performance, which is not so quantifiable, is
strategic thinking and service delivery.
the unquantifiable, we have a slightly more general evaluation scheme.
We lay out a series of criteria like quality of people, strategic
service, innovative thinking, systems, finance, buying and implementation.
We have statements through which clients rate us. Zero is 'bloody
awful' while four is excellent.
evaluation schemes are put together at the start of the year and
the evaluation takes place either half yearly or yearly.
it's all about people dealing with people. My senior managers and
I make it a point to have informal meetings with our senior clients
to discuss work, our performance and the state of the relationship.
the most part, when a business consolidates, even when a company
consolidates, creativity is lost. In the US we've seen it with TV
stations and radio stations. Specific to media planning and buying,
it becomes all about processes rather than ideas. That extra something
that is unique gets lost along the way. Your comment?
When you say that there is a loss of creativity when a business
or company consolidates you are making a very flawed and sweeping
statement. It is not universal to all consolidated companies and
can be true of small companies. A small company with many customers
may not have the resources or capacity to handle its clients' needs
thus initiating an assembly line approach resulting in a loss of
problem of loss of creativity or lack of attention or lack of customisation
can exist whether a company is large or small. This is partially
the reason, we have three operating companies. Each company is broken
down into smaller operating units each having five offices and each
office has its own set of clients. In fact, with Mindshare Mumbai,
we have two SBU's.
customer attention is not something we move off the rack. It is
tailor made specifically for each customer and the brand.
customer handling mechanisms mainly done through software?
At the end of the day software can only help in certain areas.
It can help make someone more efficient. It can help someone cope
with administration or someone with numbers.
you cannot build relationships using software. It is done between
people either as individuals or groups. In the marketing communications
business respect, ability to work with people is important. It is
not just a question of the product.
is something we are very conscious off which is why we put those
feedback mechanisms in place. We cannot run away from the nature
of client relationships whether it is excellent, good, average,
bad and indifferent.
it is good then the question is how can we take it to the excellent
level. At the end of the day you can never take your customer for
granted. That is really a danger. The second the customer feels
he is being taken for granted you will know either by evaluation
or if he walks out of the door and says "I do not want to work
would like to bring this discussion to conditional access and its
implications. Some broadcasters have expressed fears that post-CAS
Mindshare Fulcrum is going to push all advertising off pay channels
principally onto DD and Sahara TV. Any comments?
We have never made such a statement nor are we contemplating any
such thing. You know as much that is going on with CAS as we do.
We are looking at it from the point of view of the implications
to our clients' planning & buying and how we manage in a post-CAS
are not making sweeping statements on a situation that is changing
almost daily. CAS is a defining moment for the cable and television
industry. The 14 July launch will happen.
said as you will shortly get a comprehensive point of view from
am not against someone making hay while the sun shines but let
us get down to today's reality. I think that production houses
are in general overpaid"
to CAS, what is your reading of the scenario with respect to producers?
Broadcasters have warned them that since the ad rates will go down
they will not be able to continue paying them high fees. What is
your reading of the situation?
For some time now the producers have been claiming they are hurting.
The broadcasters do not pay them what they would like to be paid.
The problem exists and I don't think that CAS is going to have a
huge effect on the situation of producers. There is a worldwide
rate for programming in different genres and some of the rates in
India were well beyond that. I am not against someone making hay
while the sun shines but let us get down to today's reality. I think
that production houses are in general overpaid.
are you saying that the cost of programming has actually come down?
Costs of production are certainly not spiralling. If anything, I
would say over the last two, three years, they're a bit more organised
in terms of how they manage costs and thus how much they charge.
Everyone is learning to live with tighter budgets, more demanding
channels, though there is lots of software to be produced. Big ones
like Balaji operate almost an assembly line schedule and manage
to produce a huge number of shows profitably.
due to economies of scale, for a Balaji, say, costs are certainly
not spiralling. This industry has grown to some 2,500 crores (Rs
25 billion). The need for television software is huge. And none
of them should be complaining because if anything, they are being
paid more through absolute volume rather than any one individual
a channel like, let's say Star, who are demanding a hell of a lot
more quality in terms of post-production, finish, etc, and they
are willing to pay top dollar. People we've talked to like UTV or
Neena Gupta are certainly not complaining. Or take the guys behind
this new show Josh. They're being paid 15 lakhs (Rs 1.5 million)
per episode, which is a lot of money. Here the channel is going
and saying "look guys, if you can perform, we'll give you lots
of money for production."
IRS report is a bungled thing and I am not the only person
to say this"
is striking. Do you agree or disagree with the whole idea of saying
'I'm willing to put top dollar for good quality productions'?
If it gets me the numbers, the audiences, sure I am. It's like saying
that if someone had a budget of 5 or 6 lakhs per episode to produce
a programme and it was giving me say, a 10 rating. Tomorrow, you
go and tell him 'I'll pay you 15 lakhs', it doesn't mean that now
you're going to get 30 ratings. Somewhere, there has to be a balance
between what the advertisers want from the channel and what is there
for the producer.
saying these two things are disconnected. You certainly can produce
very good programmes within the available budgets.
may want to scale it up and make it a lavish international quality
production. That doesn't mean you'll get three times the ratings.
And the advertiser is not going to pay three times the rate for
that spot. Somewhere it has to all work together.
do not think it presupposes you're going to ask three times the
rate for that spot, but one would certainly charge some sort of
Why would you? Finally what I am seeking are audiences. If I'm not
going to get more, why should I pay more?
this the very reason why we have homogenisation of the kind of programming
What is a programme put on air for? To be watched. What we're saying
is, obviously quality programmes rate higher. Usually. But the fact
of the matter is, that no one is going to accept a programme that
is ten times costlier without the quality that is going to pull, in
some projectible manner, an increased audience.
not as if we are a mercenary bunch of people. Everybody has the
same objective. Of giving consumers something good to watch, and
making that number of consumers large and viable enough to justify
we last talked, you'd said that there needed to be a shift in focus
away from just TV. However, going by the latest IRS 2002 report
put out by MRUC, it says that print is the only media vehicle that
has shown an effective decline. Which actually brings TV back right
up there again does it not? Unless you believe that direct marketing
and outlet point interactions with consumers are going to make that
much of a difference.
The IRS report is a bungled thing and I am not the only person to
subscribe to the NRS and the IRS full report is not out yet. So
I withhold comment as to whether print has actually gone down or
always deal with absolutes, which is where I sometimes feel that
the industry does not look beyond the surface. People can be light
or moderate or heavy consumers of a medium. So there are the various
levels of consumption when you talk of print or the television.
take your average television media plan and break its audience delivery
up against the different consumption group. We are able to do this
with an application called Viewer Graphics which breaks up the audience.
over deliver against the heavy viewer who watches everything. Therefore
by definition he/she consumes that much more of your product. For
light viewers appointment viewing comes into play. "I want
to watch this programme at 7 pm and that one at 3 pm." It can
be done for newspapers. Light viewers are hardest to reach. As I
had mentioned earlier there is no such thing as good or bad media.
There are only inappropriate or irrelevant uses of media.
we create a television or print plan let us not look at superficial
average delivery of that plan. Let us break that delivery into its
various target audience levels. If we are under-delivering for light
viewers pumping in more money into television is not really going
to reach them.
would need to cover television for an entire day or buy all newspapers
on one day. It is not just an issue of cost efficiency but also
of profitability. I can introduce another medium to reach someone
who is a light television viewer or a light newspaper reader.
research we can find out what a light television viewer reads or
does otherwise. We did a big exercise with our Broadmind media unit
on how to get more exposure against hard to reach consumers. The
unit deals with non-traditional media.
point I'm making is: You need to look beyond the overall consumption
of newspapers or television and see the different levels of consumption.
say IRS has bungled. That's a pretty strong statement.
When I say the IRS has bungled what I mean is their inability to answer
or evade certain questions at their results presentation. They after
all said they would issue a corrigendum, which the dictionary defines
as an error to be corrected.
had been subscribing to both IRS and NRS till 2001. We did our own
validations and found the superiority of NRS in key parameter-Data
consistency. IRS lacks consistency in the following points
3. Research agency partners.
scores high on all the above key criteria. Its also implemented
by the three big research agencies of the country and our belief
is that hence the expertise of large and quality agencies are brought
in with the final output of the survey.
we believe that the NRS information is very comprehensive. It is
also accurate and reliable. It measures what is supposed to be measured
over a period of time.
would say you back NRS because IMRB and AC Neilsen belong to the WPP
Of course our critics would say that. But lets separate fiction from
fact. Firstly, there is another research company involved with NRS
and they are TNS Sofres Mode. They are independent and have nothing
to do with WPP.
WPP has only a minority stake in AC Nielsen.
MindShare & Maximize are not the only ones to purchase NRS -
there are over 20 agencies and 20 media owners who also subscribe
don't make purchase decisions on research or anything else based
on what may or may not benefit our sister companies but on what's
right for us and our clients.
don't you ask the others why they purchase IRS?
it a bit ironic that your biggest client Hindustan Lever subscribes
Ironies abound everywhere.
to answer your question: All our plans for Hindustan Lever are worked
Also read the earlier interview:
need to change our focus from just thinking about television"
- Interview with Andre Nair (Part I)
for more MAM interviews