It is all about whether a brand can be trusted: IPG's Terry Peigh

The SVP and Managing Director, Interpublic Group, was in Mumbai to throw light on IPG's 'New Realities' consumer research programme. In this interview, he says that some of the greatest talent IPG has got in the world is sitting in India, referring to Mullen Lowe Lintas, FCB Ulka and McCann

Archit Ambekar | Mumbai | February 17, 2016

Terry Peigh

Consumer behaviour has changed over the last decade. There was a time when consumers never questioned the products they purchased. Not only that, they did not even have access to or were unaware of complaint desks.

Today, the consumer is well aware of what he is buying, where he can complain and possibly how he can ruin a brand's image! Media has evolved so much that brands can no longer take consumers lightly. They have to be honest to the consumer to build their brand. A recent research on 'New Realities' by Interpublic Group (IPG) focuses on changes in consumer behaviour and other realities.

BestMediaInfo.com caught up with Terry Peigh, Senior Vice-president and Managing Director, Interpublic Group, who is in Mumbai. He says that some of the greatest talent IPG has got in the world is sitting in India, referring to Mullen Lowe Lintas, FCB Ulka and McCann Erickson. “We've really extraordinary talent in India… Some of the best work that our company does comes from India.” Excerpts:

Can you explain the theme of your research 'New Realities' this year?

The basic theme of the research is 'Can I trust you?' This is a research programme that started about six years ago. We started first in China and the US and now we've expanded to include Brazil, Russia, India and the UK. It's a really interesting piece of research programme we do. The intent is to understand consumer decision-making and how it has been changing over time and country to country. By doing so, we're in the fourth wave of data right now, and the third wave for India. We can show how Indian people have changed their decision-making styles over the last several years. We could also compare India to Russia, China and the US to see how the Indian consumer is different.

What brought this on was that as new media came on, as the internet exploded and digital came on with increasing number of channels, the common question we were asking ourselves and clients were asking us is: With all this information, how are people processing it? Are they processing it easily? How difficult was it? Do they like it? Is this helping the advocacy of brands? What kind of information is best? What kind of channel is best?

There were a lot of questions on how a consumer segments, in terms of consuming information. We just wanted a dynamic on-going research programme to track how consumers are changing. Obviously, the aim was to use that knowledge and insights to help us design communications programmes that our clients ask and get on front of it and respond to these changing needs in terms of channels and messages.

What are the key highlights?

We probably found 'New Realities' from the very beginning. Probably the 'new' in 'New Realities' is the growing demand for trusted information around the world – and India was at a very high level. Along with the demand for trusted information is the information for trusted brands and again India has the highest numbers in terms of their agreeing with people about relying on trusted brands.

In terms of social currency, India is very high on the list with China – in terms of people saying they get social value and have pride in their learning about products. In terms of the joy they get from learning, India was second highest to Brazil.

When it comes to advocacy of a product, India is the highest in the world, in terms of consumers taking that information and talking and telling their friends about it. We talked about demand for trusted practice, again very high in the Indian context at 67%. When it comes to relying on trusted brands, 66% of Indian people strongly agree that they are relying more and more on trusted brands. That is the highest in the world. It says a lot that marketing communication people need to design programmes to really work hard for consumers to make them trust brands.

The other piece of the research that we did was fairly unique. We wanted to understand 'How do you build trust?' What do you need to do to understand trust? We found out that there are two things driving trust. The first one is reliability of the product. The other part was honesty, because if you are honest with your communication, you will be rewarded with your consumers.

You are talking about the fact that consumers demand trust in the world of new media. Can you explain this?

New media are impacting very quickly. Social media could be a very powerful tool for dealing with this. At the same time, it's not as simple an answer. Some people think of social media as the best way. The problem increasingly with social media is that you can buy tweets, you can buy Facebook sponsors, you can buy blog sponsors. But increasingly consumers are saying 'I'm not sure if we can trust what's coming out from social media.' Today consumers are seeing through all that. For instance, if Beyoncé is tweeting from her personal ID, it is because she is paid a million dollars for it! Hence, marketers need to be very careful with that and not make the problem worse.

A lot of countries now have a new term called 'native advertising'. It looks like a piece of editorial but is actually advertising. Many consumers are seeing through that too and saying you're not being honest with me. I think there is a blow back with smart advertisers who are saying I'm going to be very careful with what I advertise and not cheat people.

Where social media can be good is the bloggers space. There are a lot of bloggers out there who give their opinions on what interests them and they all are not paid to write. This is what consumers trust more these days as the 'blogger' is just another guy or friend who gives a genuine opinion on the product. Though there is no control over content like it is in a paid advertisement, the value is definitely more. This is a very powerful communication.

When it comes to new media, consumers still go by word of mouth. Do you see this perception growing or fading in the coming future?

I think the perception will only grow. We've been doing this research for about six years and with all the new media, this perception will only grow. Possibly, the trust issue becomes bigger. When you think of trust, who do you rely on? Think of your personal life, you will always rely on your family and friends. We've seen the power of friends and family growing over the years and I don't see it declining at all. If you really think about it, it really changes the dynamics of the communication business. There's still value in having television, radio and print advertising. But we have to be much more responsive to the value of person to person communication and word of mouth. It's the most powerful channel and most often the cheapest to do, but you don't have direct control, so you just have to deal with it.

What are the challenges that brands face today and need to overcome in the near future?

The biggest challenge I think is accountability. Clients are demanding direct ROI accountability for their investment. It's a little tougher to give ROI on social media than with running a consumer ad online and following the consumer. But, increasingly, social media companies are helping address that.

The other challenge according to me is to avoid the temptation of trying to buying your bandwidth. It's too easy to say I'll pay a blogger to represent my brand. From all the research that I have seen, that will not be helpful; in fact, it can often be dangerous as it questions the integrity of the brand.

The third element with new media is that it is a very complex world and is changing minute by minute. There are probably hundreds of social media sites in India like in the US. It's hard to stay current. Increasingly, we are telling our clients to experiment. New guys keep coming to the social media town. Sometimes the early adopter can be very successful. It used to be limited to a few television channels, a few newspapers; but now there are tens of thousands of sites and you have to have a much broader band for communications.

This study has been targeting consumer behaviour since 2009. How has the consumer evolved over the years?

As I mentioned before, the consumer is finding value for information. They're getting greater confidence in brands and products and that is a good sign of change. With a lot of learning, the consumer today is asking 'Can I trust you?' and that's what brands need to build.

From 2009 to 2016 what, according to you, are the two major and the most significant changes in consumer behaviour?

I would say consumer interest in advocacy. People are not just wanting to receive the product but also wanting to tell about it to others. And that is great news for us. The other dramatic change is the demand for trust. It's not that hard to be honest and consumers are looking for such brands today.

You keep on adding new markets in the study. Which are the new markets that you added this year?

This year we added the UK and Russia to the study. We wanted to target the BRIC countries. We already had China, India and Brazil, so Russia was added this year. So we now have a total of six markets – Brazil, Russia, India, China, the US and the UK.

The growth of the consumer class is the most in these markets and it is important for us to study those markets. Brazil, India and China as a group of countries are very different.  They bring great advocacy, great joy and great social currency than the US. And maybe that is because of the freshness and newness of being a middle class consumer with money.

How would you define consumer trends and the evolution of their needs in a versatile market like India?

The need for product information has grown tremendously. And it's not just about I need to know about bread because 'I need to go out and buy bread.' It's the social value of that information and it's fascinating. Because this was not there about a decade back. I don't think people found this kind of social currency from their products.

What do you have to say about IPG's growth in the last couple of years?

India has been a very important country for us. We have three majors here – Mullen Lowe Lintas, FCB Ulka and McCann Erickson – all very successful and very strong agencies. We've recognised the importance of the Indian market. All the three agencies have been here for a long time.

Some of the greatest talent we've got in the world is sitting in India. We've really extraordinary talent in India. We've always found out that this market allows great advertising. Some of the best work that our company does comes from India.

What roadmap have you designed for the agency in the near future?

The old way of joking was you think of doing just a TV commercial, a radio ad, and a print ad, and then you think of lunch! Whereas now, there are 15-20 channels and increasingly clients are making the agencies responsible for integrating those channels. There are still some clients who integrate it themselves, but many of our clients say 'I'll give it all to you.' I give you the advertising, the digital, the social, direct marketing, entertainment marketing, public relations and so on. I give it all to you and you guys have to pull it together.

How do you see 2016 for the media and advertising world both for India and its global counterparts?

The advertising world is a challenging place today. Everyone is holding their breath. We all see stock markets going up and down, very wild in the last few months. In the US the market was down considerably when we finished 2015. I think the world is waiting to see the fallout from what is happening in China, the fallout from what is happening with commodities which is affecting a lot of economies.

Everyone is mystic about how the year will shape up. We've had a very successful 2015 and we appreciate the contributions from our clients for a better 2016.

Coming to India, the government has been very positive and has opened a lot of doors for business.

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