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IPG Mediabrands, the media buying arm of one of the big four global advertising agencies, recently announced acquisition of Interactive Avenues (IA), one of the largest full-service digital marketing agencies in the country. Matt Seiler, Global CEO, IPG Mediabrands, says the move will drive automation in media buying, and help India be among the top four priority markets over the next three years. Excerpts from an interview with Sudipto Dey
How is the India picture of Mediabrands looking like, a year after bringing three group media agencies - Lodestar UM, Initiative and BPN - under one umbrella?
After I took over Mediabrands in 2011, we put a structure in place to align all our business with our clients' business. Most of the holding company models are flawed in a way that most of the operating units work in silos and P&Ls within them. Clients keep saying: "I want you to take care of my business, rather than you own." So, we put Mediabrands as P&L with Shashi (Sinha) in the CEO role. So he will have on command all Mediabrand resources to the benefit of clients' business. Having Interactive Avenues into our fold was natural move as they are the No. 1 full-service digital player in India. Interactive Avenues and Reprise Media (a JV with Interactive Avenues) would be part of MAP (Mediabrands Audience Platform, a data-driven digital service).
Are you open to more IA-type acquisitions in India?
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I don't know when we will see another acquisition of this scale. As we evaluate the world in which online tracking becomes less and less acceptable, new things will pop up.
Where does India sit in G-14's scheme of things?
Currently India is somewhere in the middle. But if you look at the growth projections, it should be among the top three or four markets in the next three years.
What is going to drive that growth, especially in an increasingly always-connected world?
One part of the reason why we are bringing MAP here (to India) is to (enable clients) buy audiences. And be less tied up in - what is my TV budget, print budget, online budget, search budget, social budget, etc. That type of silo thinking is keeping clients away from what they need. So what we are designing for India is an automated buy solution that will stand across media. This is an ability through technology to secure audiences that are more relevant, than how media is being procured today.
So there will be more automation. In the top, custom or sponsorship will not be done through automation. But the vast majority of media (in the middle) is in campaign. That is not currently automated but will be. The bottom end of the market place is largely automated.
In United States, we have a goal of 50 per cent automation in three years. But in India you should reach that level in five years. (That means) the ability to recognise audiences and capture them through automation, and track what they do. There will be more simplification (in business) by cutting down layers of complexity. We will be talking much less about devices and much more about audiences.
Many advertisers still find the digital media enigmatic. Do you expect that to change going forward?
I think there is not enough accountability. If more agencies can prove that the audiences that they deliver are the right audiences, by tracking them better, then it becomes better. So it will be less about individual media type but more about people you activated and to what end. In the next three years in United States and five years in India, it will be more about data tracking, delivery to specific audience, and the results.
You have been a votary of the pay-for-performance model. How does it impact the traditional advertising business model?
What it essentially means is that agencies are worried about their client's business before they are worried about their own. This is something the clients have been begging for. So we ask a client what success looks like to you - so their KPIs (key performance indicators) become ours. The conversation with clients would not be about my P&L constraints but about delivery on client's business needs. I think the media holding companies are at the perfect altitude to effect that change.
