 "Focus where it matters")
Time for holistic ROI
Agency offices of networks located in emerging markets must focus on getting more business from local clients. Historically most of them have been doing so, especially after the Nineties when a horde of MNCs entered India. It is good to have globally aligned businesses and clients but depending on them squarely should never be the mantra. In fact, one is seeing an emerging trend of clients who have been relying on global alignments looking outside their networked agencies and selecting local agencies to build their brands. At the end of the day one has to demonstrate capability and the agency chief has to lead the way in this.
The CEO charts the mandate and defines the vision. He is the one aware of global clients alignment possibilities and thus if his mandate is growth and taking the agency to greater heights then he has to be clear where the opportunities lies. And the CEO is aware that it will come from winning many more businesses from local clients. A major chunk of Contract Advertising business comes from local clients like Shoppers Stop, Asian Paints and NIIT. All these relationships are more than a decade old. In fact, we have been working with NIIT for 24 years now.
For global agency networks, I do not think the option of growing local client base through acquisitions is viable. Let us just face the reality. Other than a couple of names, how many independent agencies in India have more than 20 clients? While boutique agencies abroad have managed to scale up, the Indie is still to get a firm footing in the broad picture of advertising. At the same time, the independent agencies are doing some great work and the client does not mind straying to these setups for a few projects a couple of times in a year. For global networks it makes more sense to invest in the local talent to grow business across emerging markets.
In last two years, there has been a constant focus on holistic ROI in advertising. The holistic ROI is about doing great work, winning awards, attracting the best talent and running a profitable business. So one has to focus on both, the quantitative and the qualitative side equally.
With relationship management, building perception, attracting the best talent, creating an agency of repute and demonstrating some outstanding results, the CEO builds an organisation that stands out by winning businesses from local clients. This is the new reality of the business of advertising. Growth will come from winning many new clients across an integrated offering whether they come locally or globally.
Create social embeddedness
McKinsey has called consumption in emerging markets the biggest growth opportunity in the history of capitalism. Further, going through the financial crisis, the most resilient economies measured by GDP or trade volumes have been the emerging markets.
The story of emerging markets is the base of the economic pyramid story the largest and fastest-growing segment of the world's population. Reaching four billion people in these markets poses both tremendous opportunities and unique challenges to MNCs, as conventional marketing strategies may not be appropriate. This makes it imperative for MNCs to develop a global capability in social embeddedness for local markets.
So what are the challenges for advertising agencies in emerging markets? Should they focus on getting more business from local clients? The writing is on the wall: agencies need to focus on emerging markets more than ever before. These emerging markets will be the engine of accelerated growth for global multinationals. Agencies must gear up to be the best partners for these clients. One of the primary drivers of the recently concluded Publicis-Omnicom merger was to build scale and credibility for the merged entity across emerging markets.
So how can agencies help their clients get socially embedded in emerging markets?
In real estate, location matters. For social embeddedness, it is all about thinking local, local, and local. Each market has its unique cultural nuances. Understanding these nuances will impact how one connects with consumers in these markets. Besides many emerging markets have complex consumer constructs. More often than not, one needs to address these constructs with a great deal of understanding and sensitivity. The story of Pepsi and Coca-Cola in India bears a strong testimony to this fact. When Pepsi launched in India, it captured the imagination of the youth by leveraging Bollywood and sports. Coke stuck to its global strategy and failed miserably to connect with India. This was a big lesson in social embeddedness for all global marketers.
Success in emerging markets pays off big time. However, here the tide of fortune sees a strong ebb and flow. As Warren Buffet said, It is only when the tide goes out that you learn who has been swimming naked. Hence, it is important to be well prepared.
At Dentsu, globalisation and localisation are perfectly blended. Technology and creativity are inextricably linked. These are the values that make the Dentsu brand perfectly poised to partner global and regional MNCs in emerging markets. Over the last decade, Dentsu has partnered over 20 global clients to leadership positions in emerging markets.
Agency offices of networks located in emerging markets must focus on getting more business from local clients. Historically most of them have been doing so, especially after the Nineties when a horde of MNCs entered India. It is good to have globally aligned businesses and clients but depending on them squarely should never be the mantra. In fact, one is seeing an emerging trend of clients who have been relying on global alignments looking outside their networked agencies and selecting local agencies to build their brands. At the end of the day one has to demonstrate capability and the agency chief has to lead the way in this.
The CEO charts the mandate and defines the vision. He is the one aware of global clients alignment possibilities and thus if his mandate is growth and taking the agency to greater heights then he has to be clear where the opportunities lies. And the CEO is aware that it will come from winning many more businesses from local clients. A major chunk of Contract Advertising business comes from local clients like Shoppers Stop, Asian Paints and NIIT. All these relationships are more than a decade old. In fact, we have been working with NIIT for 24 years now.
For global agency networks, I do not think the option of growing local client base through acquisitions is viable. Let us just face the reality. Other than a couple of names, how many independent agencies in India have more than 20 clients? While boutique agencies abroad have managed to scale up, the Indie is still to get a firm footing in the broad picture of advertising. At the same time, the independent agencies are doing some great work and the client does not mind straying to these setups for a few projects a couple of times in a year. For global networks it makes more sense to invest in the local talent to grow business across emerging markets.
In last two years, there has been a constant focus on holistic ROI in advertising. The holistic ROI is about doing great work, winning awards, attracting the best talent and running a profitable business. So one has to focus on both, the quantitative and the qualitative side equally.
With relationship management, building perception, attracting the best talent, creating an agency of repute and demonstrating some outstanding results, the CEO builds an organisation that stands out by winning businesses from local clients. This is the new reality of the business of advertising. Growth will come from winning many new clients across an integrated offering whether they come locally or globally.
Rana Barua
CEO, Contract Advertising
CEO, Contract Advertising
Create social embeddedness
McKinsey has called consumption in emerging markets the biggest growth opportunity in the history of capitalism. Further, going through the financial crisis, the most resilient economies measured by GDP or trade volumes have been the emerging markets.
The story of emerging markets is the base of the economic pyramid story the largest and fastest-growing segment of the world's population. Reaching four billion people in these markets poses both tremendous opportunities and unique challenges to MNCs, as conventional marketing strategies may not be appropriate. This makes it imperative for MNCs to develop a global capability in social embeddedness for local markets.
So what are the challenges for advertising agencies in emerging markets? Should they focus on getting more business from local clients? The writing is on the wall: agencies need to focus on emerging markets more than ever before. These emerging markets will be the engine of accelerated growth for global multinationals. Agencies must gear up to be the best partners for these clients. One of the primary drivers of the recently concluded Publicis-Omnicom merger was to build scale and credibility for the merged entity across emerging markets.
So how can agencies help their clients get socially embedded in emerging markets?
In real estate, location matters. For social embeddedness, it is all about thinking local, local, and local. Each market has its unique cultural nuances. Understanding these nuances will impact how one connects with consumers in these markets. Besides many emerging markets have complex consumer constructs. More often than not, one needs to address these constructs with a great deal of understanding and sensitivity. The story of Pepsi and Coca-Cola in India bears a strong testimony to this fact. When Pepsi launched in India, it captured the imagination of the youth by leveraging Bollywood and sports. Coke stuck to its global strategy and failed miserably to connect with India. This was a big lesson in social embeddedness for all global marketers.
Success in emerging markets pays off big time. However, here the tide of fortune sees a strong ebb and flow. As Warren Buffet said, It is only when the tide goes out that you learn who has been swimming naked. Hence, it is important to be well prepared.
At Dentsu, globalisation and localisation are perfectly blended. Technology and creativity are inextricably linked. These are the values that make the Dentsu brand perfectly poised to partner global and regional MNCs in emerging markets. Over the last decade, Dentsu has partnered over 20 global clients to leadership positions in emerging markets.
Rohit Ohri
Executive chairman, Dentsu India & CEO, Dentsu APAC (South)
Executive chairman, Dentsu India & CEO, Dentsu APAC (South)