We need multiple revenue streams for growth: Tarun Rai

Interview with Tarun Rai, chief executive officer, J Walter Thompson South Asia

We have been pretty successful in changing our revenue mix and today 35 per cent of our group revenues are from non-traditional sources, Tarun Rai tells Sangeeta Tanwar.

What are the strategies for J Walter Thompson South Asia in terms of growth and expansion?

The focus is on aggressive, profitable growth. However, the growth is not going to be strong if we continue to focus on the traditional advertising pie. I am not interested in just more share from our market; I want share from more markets. We need multiple revenue streams for growth. The clients are spending a lot on communication, except now they have more avenues to spend on and more partners, besides their agencies, to spend with. Thus, my key paths to growth are: a) New, new business, b) New business from existing clients and c) Acquisitions.

To explain, new new business is what we already know — to go and get new clients and assignments. We have been good at this. Last year, across our group we acquired 144 new clients. In growing economies like India and Sri Lanka there is so much scope for new business. New categories are opening up and are spending. Established players need to spend more because they have new competition in their categories. In the last couple of years, the Indian economy has got a lot of momentum and Sri Lanka, with political situation having stabilised, is buzzing.

However, just new business is not the only growth opportunity. That brings me to the next point — new business from existing clients. I want a slice of the other areas of our clients’ communication and marketing spends. For this we first have to build capability. As a group, J Walter Thompson South Asia is lucky that we already have some significant diversity in capability. We have two digital companies in HDS and Mirum; we have India’s largest experiential, rural and shopper marketing network in Geometry Global Encompass network, we have Design Sutra, iContract, Core Consulting, Fortune Consulting in Sri Lanka, Thompson Social…And we are constantly hiring people from outside our industry to build this diversity in capability. Over the last two years we have been pretty successful in changing our revenue mix and today 35 per cent of our group revenues are from non-traditional sources. We want this to be 50 per cent by next year. And finally, we are actively looking at new acquisitions. These acquisitions are again largely in areas that help in diversifying our capability and offering. The focus on growth seems to be working — in my first year we turned the operation around and grew 10 per cent. We followed that up last year by doubling the growth figure to 20 per cent. And these numbers are without any new acquisitions.

What kind of creative innovations and marketing solutions are advertisers asking for?

Marketers are passing through unprecedented times. On the one hand, with the momentum in the economy and technological leaps, there is a huge opportunity for growth while on the other, just about every aspect of the marketing mix is getting disrupted. New competition from regional/ethnic brands within the category, cross category competition, significant changes in what consumers are spending on, disruption of traditional distribution by e-commerce players…On top of it is communication itself. There are so many new ways to reach the consumer today. The way people consume communication is changing, but changing at a different pace depending on the profile of the consumer. Social media has become a powerful tool to communicate but is also a double-edged sword as there can be quick backlash against brands. In such a scenario clients certainly have become more demanding of their partners. At J Walter Thompson, our endeavour is to help meet our clients’ business goals and not just their communication goals. We have always been very strong in strategic planning. And in India, we have the largest team of strategic planners among all agencies. We are, therefore, in pole position to offer help in finding business solutions to clients’ problems/challenges.

How do you assess marketers (clients) receptiveness to data-led solutions.

Data is the new buzzword. And rightly so. With so much data available it is a shame that it is still not being effectively used and deployed. While our digital companies have strong data analytics teams we are building data analytics teams even in our mainline agencies. This, to help our strategic planners come up with better, data based solutions for our clients. Clients are focussing a lot on data analytics and are looking at using it effectively for a more targeted communication and faster response.

What are the areas where companies in India are lagging when it comes to building iconic and global brands?

Things have changed. For the better. Even a decade ago we had international brands coming to India. It was a one-way street. That’s not the case today. So many Indian brands are making their presence felt in international markets. Whether it is Tata, Wipro Vedanta or Infosys. But the good news is that Indian brands in other categories are also going international. Hero, Airtel and GoodKnight are good examples of such brands. So I don’t agree that there’s anything lacking and I feel that more such Indian brands will go international. It is just that there are so many opportunities in the Indian market still.

What are the key challenges for JWT?

People are our only asset. So talent continues to be our biggest challenge. We need the best and we know that we are competing for this talent with many new industries and not just the advertising industry. Our strategy on talent is focussed on getting the best talent from diverse backgrounds. We can’t build diverse capabilities by keeping on hiring more people like us. We need to fish in other ponds. And after hiring the right talent it is our duty to create the right environment to retain the talent. I am very happy that our employee attrition levels are possibly the best in the industry. When I joined a couple of years ago it was an alarming 46 per cent! Today, JWT attrition levels are down to 20 per cent. That for me is a pretty good number. 10 per cent planned attrition and another 10 per cent unplanned. The other challenge, or in fact, opportunity, is to be able to diversify our capabilities fast enough to offer more comprehensive solutions to our clients. I believe clients are looking for a ‘creative steward’ for their brands. With so many partners in the communication mix there is a very real chance of the brand message getting diluted and diffused. At the end of the day the clients want one brand message to reach that one consumer. Except that today there are many platforms to reach her. And that’s where the brand message can get diffused. The creative agency is best placed to be the Creative Steward — it is, after all, the agency’s creative idea that other communication partners are executing on their platforms. However, it makes it incumbent upon the agency to build diverse capability to understand and, in many cases, deliver across multiple platforms.