Mumbai: Renowned industry stalwart Shashi Sinha, currently serving as IPG Mediabrands India CEO, is a prominent and influential figure in the advertising sector. With a career marked by numerous triumphs, Sinha has garnered a string of accomplishments and accolades. The most recent honour to grace his illustrious career was AAAI’s prestigious Lifetime Achievement Award on 1 December 2023, in Mumbai.
Indiantelevision.com in a freewheeling candid chat with Sinha, delved into various facets of his life, career, and vision, Sinha candidly addresses a spectrum of challenges with his trademark rapid and concise speaking style. From the intricate task of retaining talent in the advertising realm to navigating controversies surrounding news ratings, he reflects on the evolution of media buying and planning functions. Sinha also shares insights on digital ratings and contemplates the future trajectory of the advertising industry.
Edited excerpts
On media & Advertising evolving over the years
In the early days of my career, the media played a relatively minor role in the creative process, with print reigning supreme and television just starting to make its mark. Today, the significant evolution lies in the vast array of media options that were unimaginable back then. India’s advertising landscape appears underprivileged due to its low value in terms of GDP and a relatively small percentage compared to the global scale. However, in terms of volume, it is one of the largest markets globally, offering diverse options and varying budgets.
Despite the rewarding nature of the industry, the unique challenges arise from the substantial difference in the strength of searches in businesses. Indian professionals exhibit considerable competence compared to their global counterparts. The downside, however, is the high effort required for outputting work due to the low value. While many claim a lack of profitability or margins, the workforce is abundant. This abundance leads to a significant volume of transactions, impacting work-life balance across creative and media spheres, and sparking ongoing debate.
The current scenario sees a disparity in value, attributed to market fragmentation, intense competition, and numerous options. The global competition landscape is unparalleled, contributing to suppressed prices. Additionally, the exchange rate of the rupee to the dollar further suppresses the apparent value. When viewed from an international perspective, the value seems low due to these factors, particularly when measured in dollars.
In a recent conversation with my international boss, who questioned the high number of professionals, I explained that looking solely at dollars can be misleading. The low value is a result of both intense competition and a suppressed exchange rate. However, I emphasized that our team is an asset, and with continued automation and improvements, the system is poised to get better. I predicted a jumpstart in strength and value in the coming years, bringing about positive change in the industry.
On linear TV still being relevant
There’s a recurring observation that certain structural issues need addressing in the industry. Currently, our focus on measuring TV is limited to certain elements, particularly content. This measurement approach views TV as a mass medium and lacks segmentation, which excludes individuals like you and me—the key lies in the will to change, not a lack of capability.
Segmentation is crucial, and once implemented, it can lead to tailored content creation. Presently, most OTT players struggle to turn a profit, while TV players generally do well financially. This discrepancy arises from the fact that OTT is often funded by global money, whereas TV content is primarily supported by broadcasters.
From my perspective, advocating for industry enablement is not just a measurement company’s standpoint but extends to a broader perspective within IPG. While change won’t occur overnight, enabling this shift over a 2-3 year period could yield significant results. The fundamental belief is that TV is a lasting presence, and overlooking linear TV does it a disservice. There’s a genuine conviction that sports will continue to drive linear TV forward.
On Indian TV ratings and measurement issues
I don’t hold any grievances against the news channels, but there are a few aspects of the current structure that need consideration. Firstly, it’s crucial to grasp the overall context. In India, there is a multitude of options, and while everyone desires regulation, the reality is that there isn’t much. Anyone can launch a channel, resulting in a situation where approximately 10 to 12 per cent of the TRP ratings are distributed among a vast number of news channels. While my figures may have a slight margin of error, the general point holds that a significant portion of ratings is shared among numerous news outlets.
The issue arises when they seek revenue based on their numbers, without necessarily considering the individual strength and endurance of each channel. When comparing shares, there’s a tendency to downplay smaller percentages, saying, for instance, that a 0.1 per cent share is insignificant. However, this approach ignores the potential for significant errors within such small percentages, particularly in a diverse and fragmented market like India, where each state differs significantly.
Moving on to distribution issues and data infiltration (part two), when news channels were initially established, there were defined error levels. However, these levels have become irrelevant due to a lack of measurement capability and disruptions in the industry. Furthermore, certain markets, such as those mentioned on the record, have experienced infiltration, complicating the overall landscape.
In my perspective, the key point I emphasised is that BARC needs to be proactive in addressing the concerns of its stakeholders. One such stakeholder group that perceives the issues is the users, and their feedback holds significance. When stakeholders raise concerns, it becomes the team’s responsibility to channel energy into managing the future.
To illustrate, consider the current situation where meters are placed in households, requiring individuals to press buttons for data collection. This method might not be remembered by everyone, especially in upscale homes where there may be a reluctance to engage in button pressing. The categorization of audiences into NCCS or ABC groups might not accurately represent the diverse viewership. The challenge lies in the broad definition, and ownership is not as comprehensive as it seems.
To address this, a re-evaluation of instances where industry bodies like MRSI and LSA play a role is crucial. Progress is hindered by the slow response to industry challenges. A more elegant solution involves looking at upscale homes differently. Instead of relying solely on individual data, household data can be leveraged and later converted to individual data through analysis spanning 15 years.
An ongoing effort, spanning a few months, involves working on something that can be scaled up. For example, deploying meters in premium homes, such as those with Tata Sky, can offer nationwide coverage, providing valuable data. This approach minimizes manipulation and allows for more accurate targeting of audiences.
The collaboration of stakeholders is essential to comprehend the benefits and overcome challenges collectively. By addressing concerns and making informed decisions, the industry can progress. The installation of new technology might take time, but it is a necessary step to answer crucial questions and improve rankings. The fundamental issue remains striving to be number one, requiring a concerted effort and understanding among stakeholders.
The industry currently lacks sufficient data, with BARC conducting a baseline every one to two years. The last data release was incomplete due to recalibration efforts in one or two markets. Some auditors argue that cord-cutting in India is minimal, as many people own both traditional TVs and streaming devices. Theoretically, TV measurements can be done more frequently, even on a yearly or two-year basis. Connected TV measurements can be conducted easily by watermarking the credit feed. The challenge lies in accessing homes not covered by the current panel, especially in upscale markets.
The global trend indicates a rising interest in sports, regardless of the platform – whether on TV or Connected TV. The connection with Direct TV seems like a means to an end. The focus should be on representing the top 10 per cent of homes in the country, which constitute premium audiences. This approach could address various issues and contribute to the growth of the industry.
Quarterly battles for supremacy among industry giants may be consuming, but the real challenge lies in looking beyond immediate concerns. The key players in the industry, the leaders driving growth, need to shift their focus from immediate competition to long-term strategies for business expansion. This shift requires more than just financial investment; it demands a mindset change.
Fortunately, the TV side of the industry doesn’t face a technological problem but rather a mindset challenge. The emphasis should be on long-term planning, not just five years ahead but beyond. It’s crucial for stakeholders, especially in the news sector, to shift their perspective from short-term rivalries to long-term growth. This shift requires concerted efforts and a commitment to investing in the future.
On digital measurement in the advertising industry
Ensuring stakeholder alignment is crucial, and the Industry Stakeholders’ Association (ISA) hasn’t exerted enough pressure in this regard. Various methods exist to apply pressure, with third-party measurement emerging as a critical aspect. While our capabilities are in place, some fine-tuning is necessary, addressing concerns about small inputs.
Digital measurement isn’t a one-size-fits-all solution, but rather a combination of concurrent and cross-media measurements. This requires a shared panel, and BARC has maintained a common panel for digital measurement over the past five to six years, incurring an annual cost of 12 to 15 crores. Despite my suggestion to close it down due to perceived inefficiency, it continues, with limited public awareness.
Our capability extends to CTV measurement, but the accuracy hinges on reaching upscale homes. While we can measure CTV, it might not align precisely with what others are working on.
The crux of the matter is stakeholder agreement. Currently, there are three essential decision-makers, and their alignment is critical. Communicating this alignment to the public is equally crucial. Despite public reports from stakeholders, there is a noticeable absence of measurement and financial commitment. Notably, substantial funds are being invested in digital platforms.
For a successful transition, stakeholders need to be in agreement, but it’s uncertain whether this alignment has been achieved or if it will take the anticipated six to eight months or longer. The challenge lies in fostering consensus among stakeholders.
On the performance of industry, as there were many big-ticket properties like the ICC World Cup, Asian Games, Asia Cup, the festive season and now the Pro Kabaddi League and the first quarter of 2024
Although there is growth, it hasn’t been as rapid as anticipated. The overall space, particularly the start-up sector, faced challenges, and CPD volumes may have increased to extract value. The issue this year lies on the supply side, with many companies facing supply chain disruptions. It has indeed been a tough year, but fortunately, events like the World Cup provide an additional boost. Looking ahead, elections and increased spending on the ground and digital platforms indicate a focus on value over volume. Despite the challenges, the government is expected to implement various measures to maintain a robust economy, attracting advertisers. In India, the share of voice game prevails – when one advertiser spends, others tend to follow suit. This trend was evident during the World Cup, where one company’s advertisement prompted 4-5 others to follow suit, reflecting the nature of the market.While the instinctive answer suggests a positive quarter, accurately predicting how well it will fare remains a tough task. People are cautious, and although the World Cup yielded good returns, the absence of a significant property in the first quarter adds an element of uncertainty.
On being an industry veteran and what is the forecast for 2024
The expected growth will be moderate and not exuberant. Anticipating decent but not extraordinary progress, it’s advisable to approach with caution and be prepared for various outcomes. Revenue numbers tend to be overly optimistic and can create unwarranted excitement. Learning from past experiences, such as the chaos witnessed during course corrections this year, it’s prudent to be careful and adopt a moderate stance.
