MUMBAI: Several market forecasts that we have seen in the past couple of months project digital advertising and marketing growing by leaps and bounds this year. The historical galloping growth rates have led marketers and planners to consider the possibility that the medium will overtake television spends in the near future.
Brand custodians are no longer investing in digital as an added benefit but are thinking about investments on that front from the get-go. So is digital gnawing away at television’s share of ad spends or is its growth coming courtesy a new breed of brand builders?
Group M South Asia CEO CVL Srinivas does not think that TV is losing its edge. “Television is riding the digital wave, and smartly so”, says the veteran waving off any worries of television ad revenues seeing a dip this year. Not denying the obvious growth one sees in the digital space, Srinivas gives indiantelevison.com a complete breakdown of how the digital growth works in favor of broadcasters and content providers, while also touching upon the key trends in the market, the changing role of media agencies and his take on the currently mushrooming of several digital agencies in the market. Excerpts from an interview with indiantelevision.com‘s Papri Das.
Here it is:
How was 2015 for GroupM as a whole? What were the agency’s benchmark developments?
2015 was a great year for us in GroupM. All our agencies performed well, especially when it comes to client retention which I consider most important. On the client acquisition front as well, we grew our business with several new accounts.
Last year has also been kind to us when it came to awards. The GroupM Office of Year award, which is given out by GroupM APAC, was given to us last year. That’s something I consider as another high for us.
For me, 2015 would be the year when we truly broke out of the mould of pure play media agency and delivered a range of different services to our clients to help them keep ahead of the curve. Over the years we have made investments in data, analytics and experiential marketing, cinema advertising and rural marketing and so on. All of that delivered excellent value to our clients last year. That has helped us diversify our offerings and in turn win us new and interesting mandates as well. Apart from that we have actively involved ourselves in the Mobile Marketing Association to help set standards and get some measurements going.
Out of the four agencies under GroupM in India, which one do you think performed the best?
I think all of them did exceptionally well and I say this with confidence based on each of the agency’s client retention and the newer arenas that they ventured successfully into.
How was the year for the industry at large? Did you notice any changes that majorly impacted the industry?
Last year we projected 12.7 per cent growth in ad expenditure and I must say we erred on the conservative side at the start of the year and we ended up with 14.2 per cent, but no one’s complaining!
Several factors led to this development. The FMCG sector despite all the pressure it is facing continues to invest big money behind brands. You also saw huge growth coming in through e-commerce and there were quite a few brands that continued to invest throughout the year.
What key trends do you see emerging in the market in 2016?
Very clearly, our clients and brands in general are adapting to mobile as a medium. Till few years ago we hardly had ten or twenty clients, today the count is around 150. Advertisers are actively investing in campaign after campaign, month after month, by experimenting with new formats and following the measurements. That is something I see taking off in a major way this year as several enablers are supposed to come into place in 2016.
E commerce is emerging as a platform for advertisers in 2016 which can give an interesting spin to ecosystem.
Apart from this we see several interesting initiatives happening in the content space, especially in the video and branded content space. This can give a further push to mobile advertising. The real big headline for me is mobile driving digital growth and in turn driving ad growth in India, and getting all traditional medium owners – be it broadcasters or be it print publication – to think mobile fast and think mobile first, because that’s where most of the advertising dollars are gonna flow to.
What do you think will dictate how marketers spend this year?
Right now we observe that marketers are a bit circumspect on where and when to invest. We are not yet seeing any major budget cuts otherwise our numbers in the GroupM This Year Next Year report for 2016 wouldn’t have looked so good. But there is definitely an amount of cautiousness creeping in amongst advertisers.
I think this year they are going to look at a lot more Return On Investment (ROI) and accountability across different media platforms. I also think they will wait and watch the market before deploying any of their long term campaigns and investments across media channels. Unless a property is tried and tested it will go through intense scrutiny before marketers decide to invest. Tracking of ROI and tracking of what the marketing spends are doing to the overall business will be key drivers for brands this year.
Brands are increasingly seen as the sum of all customer touch points and this in turn increases the scope of marketing. In this context, how is the role of agencies changing?
We think we are becoming even more relevant in the current scenario and important at the end of the day given the way the marketing and the media landscapes are shaping. Today consumers have multiple choices when it comes to brands and media consumption channels. In the same way advertisers and marketers also have multiple options to invest in. It can become highly confusing for the clients. That’s where GroupM went ahead of the curve and started investing in multiple media investment management services so that our clients can have a holistic marketing strategy and solution.
What percentage of your business is “traditional” or core media now?
I can’t share the break up but if you look at the market split, and the fact that we are future focused we tend to concentrate on wherever the marketing is moving to step ahead of it.
A lot has been said about digital advertising overtaking television as the primary medium. What’s the ground reality?
If you look at the trends in the last few years, not just in India but across markets we see a lot of synergy between television and digital. Looking at it from a consumer’s lens, you and I watch television and also consumer media on our second screen be it mobile or laptop. There is some amount of interplay happening between the screens.
Looking at it from a broadcaster or content providers angle, most major broadcasters today have their own digital arms. And hence, I say television is actually riding the digital wave. Broadcasters are doing it very smartly, unlike other media which are getting swamped by digital. We see that trend continuing. Inf act if you look at our forecast figures, TV and digital account for close to 60 per cent of the market share of the total ad expenditure, and we see that number move to 70 to 80 per cent in near future.
Is India truly ready for mobile marketing? Do we have a road map for it?
There are several developments that have happened in the recent past. I have been personally involved in setting up the Mobile Marketing Association (MMA). Despite India being one of the top markets globally for mobile, we did not did not earlier have a body that monitors the digital marketing space. Therefore we needed this body where all stakeholders can come and ideate and put in place systems and structures for the medium. A lot of useful discussions have happened in the recent past be it on measurement and advertising standards and MMA as a body has done phenomenal work across the market. That is one of such several initiatives that will show its effect in 2016.
What impact did BARC rural inclusive data have on the TV industry and on advertisers?
I think it’s still early days to comment on BARC’s rural ratings. It’s only few weeks that they have come out. It is a very positive development. Rural India’s viewership accounts for a sizable chunk of our market. It’s a very aspirational class and important segment for many products and categories. To have data for this segment is a very good development.
Though we will have to wait on watch how the data impacts the market, it is sure that advertisers are going to look at rural markets a lot more seriously especially in terms of media investment deployment across TV and other media options. Similarly content creators are also going to look at that space a lot more seriously today and come up with relevant products and offerings.
And over all it is good for the economy and the country because we are finally becoming a lot more inclusive.
How will the advertising landscape change with the completion of cable television digitization in India?
Funny thing about India is that nothing ever happens sequentially…..everything happens together….somehow amalgamating. This actually makes our job fun because on the one hand you have the whole cable TV digitization playing out and DAS phase III being rolled out, and a lot of DTH players have gotten very active. On the other hand you have the 4 G launch that will open up a lot more bandwidth and infrastructure in digital and you have mobile crossing 1 billion connections.
For marketers and advertisers what this means is to be aware of the developments, keep a close eye on them and see what are the opportunities they can capitalize on in short term and where is it that they need to invest, test and learn so that they can start capitalizing on them in the long term.
The big lesson for us and specially me has been that we need to be constantly in a state of beta. What do we keep testing and learning today which could become a big thing tomorrow. Staying dynamic is the way to go.
2015 also saw several well-known creatives and executives setting up their own startups, resulting in a mushrooming of several branded content and digital agencies. What is your take on this development?
I think it is a good thing that bright young individuals are setting up companies on their own. In fact some of us wouldn’t have jobs if this wasn’t done earlier. It also shows that today there are so many different areas that are emerging, and with the way the industry is being revolutionized there are many different expertise and special skill sets that the marketers need. I believe all of us can co-exist as one happy family because of the way the whole pie is getting fragmented. A lot of them are my dear friends and I wish them all the best.
