Back in the late ’90s and early 2000s, digital was considered an exotic medium by media agencies as well as advertisers and only a handful could understand how to use it and its potential.
Till 2007, digital accounted for barely 10 per cent of the media spend across the world. But things changed almost 180 degrees in the last 10 years with internet and mobile media (search marketing, internet display, social media, online video and other digital media) along with experiential marketing accounting now for almost 50 per cent of the spend. Today, most planners and buyers in agencies are very well-equipped to handle and work on digital.
This shift happened as millennials and others took to internet faster than expected, forcing brands to chase the consumer. As the audience made the shift, ad revenues also moved in a parallel manner.
The change came as a boon for advertising and media agencies as margins were shrinking in traditional media and digital offered a much better growth rate, especially with the evolution of Facebook, Google and YouTube in a big way.
In India, the share of digital in the full advertising eco-system still stands at about 15 per cent. But the growth rate is an overwhelming 60-70 per cent every year, forcing media agencies to invest in areas that would drive and sustain the ongoing digital revolution.
Starting from staying connected with the entire world, to having their own data pool and having the right set of training for the employees, the media agency network giants are doing everything that they can to equip themselves. Everybody is working on digitising and automating media planning so as to save man hours of work.
Interactive Avenues occupies a whole floor in the three-storey office of IPG Mediabrands and 200 of the total 400 people in the Mumbai office are working for digital. 40 per cent of its revenue comes from digital. For DAN, digital brings in over 35 per cent of its revenue. Agencies are now taking to digital the way they've never done before.
In a two-part series, BestMediaInfo.com finds out how media agencies are embracing the change.
The first part explores the reasons of gearing up for digital, how complex it is to embrace automation, the need of people training and lack of third party measurement.
In the second part, we'll look into the initiatives taken by the agency networks and how aggressively they're investing in data. The second part will also study who stands where on the road map.
Mayoori Kango, Managing Director, Performics.Resultrix explained, “Agencies are under a lot of pressure because of the dropping margins as the businesses are under pressure and everything has to be acquired at a lesser cost. The second problem is the fragmentation that has happened, especially after BARC (in television) and data explosion (in digital). Planning for TV was a bit simpler a few years back. When BARC came, there were so many TV channels with zero TVRs that a good plan needed to span a lot more in terms of channel mix. Similarly in digital, from just a few platforms like Google, YouTube, Facebook, now there is a plethora. An OTT user isn’t necessarily on Youtube, and vice-versa. The audience has become very individualistic, meaning they are now anywhere and everywhere.”
Debraj Tripathy, Managing Director, MediaCom India, said, “The future of everything that we do in advertising and media will be skewed towards digital first. Across the world, share of digital is growing and in India too, the share would have grown by about 60-70 per cent. Even if we all say that digital is the next big thing, I don't think TV or print will die out at least for another five to seven years. We have invested upfront. Even when there were almost no revenues from digital, we were investing because we knew that it will happen in a way that it has happened elsewhere in the world.”
Explaining the complexity in moving to digital, Shashi Sinha, CEO, IPG Mediabrands, said, “Most agencies don’t want to invest. This game will be won by execution, not skills. Media agencies have a huge volume game. So, only the big guys will be able to make monies, the small ones are not even breaking even and are always busy winning clients and focusing on traditional media. Everyone talks about it because it is a fashionable thing to talk about.”
Digital: Easy or Complex
Tripathy is on the easier side, as he added, “Digital planning is no different than that of offline planning. You look for insights coming out from data. Writing code is not everyone’s cup of tea but usage of digital platforms for better efficiency and faster working pace is not any different than traditional planning.”
Kango feels digital is complex and the complexity is only going to increase, “It is a complex eco-system and we have seen more technology and innovations that are getting us closer in getting to a single view of the customer. We are in a better place today, than two years ago, but getting a single view in real time is not possible as of now. It might happen in a year or two or three. I am sure Google, Adobe and individual tech players are working towards it, after all it’s the holy grail of advertising to know what all your customers did on his journey to you.”
MA Parthasarathy, Chief Product Officer, Mindshare South Asia (fondly known as Maps) puts in his words as, “Digital in itself is changing everyday so things you knew yesterday may not hold true today. A lot of skillsets are developed on the job, because there is rapid evolution of the digital ecosystem and skills need to evolve just as fast.”
People Training: Changing skill-sets
While everyone is adamant on decreasing the man hours and making people learn digital and get digitally equipped, it will mean that the original skills of employees need updating. This would call for a lot of workshops, seminars and training. One of the agency heads even went on to say that the agency would need about 40 per cent lesser staff.
At Dentsu Aegis Network, everyone has been given an opportunity to learn and evolve to digitise themselves and be equipped for the digital wave. Ashish Bhasin, Chairman and CEO South Asia, Dentsu Aegis Network, pointed out, “Many people who were earlier doing all of it offline have made the effort and taken the plunge. On the other hand, we’ve had to let go of some experienced hands, just because they were finding it challenging to adjust to the digital era. Future is all about digital. Not that the traditional media will vanish but digital will be the biggest medium clocking over 50 per cent of all adex in the next four to five years.”
Tripathy added his bit, “Mediacom across the world has invested hugely in the experts in digital. These experts are then able to train our people in digital. So, the grunt work happens through the machine on this platform. Either it will force the number of people to come down, or we are changing skill sets of the people. Apart from digital too, ‘n’ number of other things that will happen in a parallel way. But if you don't understand digital, you can’t work seamlessly on offline and digital, you might cease to have a job in the future and the process has already started. Almost every planner at MediaCom is equipped to do both. Only those will survive who are ready to migrate to digital.”
This thought of a mandated digital mindset and thought process is advocated by everyone at the top brass of the agency networks.
Kango added, “Nobody will become redundant. The only job that will become redundant are the backend operations and financial processes. I don't think media planning will become redundant any time soon. The fun part is that the new skill set doesn’t exist. As you are moving ahead, you are training these people. There is no workforce who knows how to do this. You are creating talent. The biggest job of the leader of the company is to identify the people who have the capacity to embrace the new and learn with it, because the job itself is changing every day.”
Taking learning and training to another level is IPG’s path-breaking initiative of backend services. Sinha further added, “No one in India is trying to understand where the world stands. The world is far ahead of where we stand on the digital map. We have created a back office for the USA wherein we do ad-ops for them and a lot of other work. The backend teams work in three shifts, India, Europe and the USA. USA is the biggest chunk. The advantage is that we get used to the best practices in the world. We are training people. While we keep doing what we do for India, these guys are doing this for very large clients from the US. On technology and data, US is far ahead of us and in a way, the learning will come into our system.”
Sinha seconds the thought of migration towards digital mindset. “Some of the existing ones will adapt to the new skill set. Those who don’t adapt will move to other verticals like planning and other things. We are working on Osmosis, we are creating specialist skills, the ones who are interested in learning are doing it.”
Maps explained how automation was important. “Automation is something which we believe is critical because it frees up a lot of time of our people to focus on more strategic business and marketing goals than monitoring media goals. Unless you are ready to let go of what you do on a daily basis, it is hard to evolve to what you need to do.”
He does not believe the discussion is about the number of people coming down because of automation. “The nature of the task of the agency is changing significantly. It is important how well we are able to use the data, either the client data or the data available in the ecosystem. All of this is fragmenting so fast, and at the same time things are overlapping rapidly so you need people with a different skill-set. We might not have fewer people in the future, but we will definitely have differently skilled people.”
Measurement, transparency and brand safety: work in progress
Globally the digital medium is failing on several counts primarily on transparency followed by absence of credible third party measurement raising concerns about brand safety.
Global Chairman of Wavemaker Alastair Aird said, “Brand safety has been a large part of what we have seen in 2017. Brands including P&G are questioning about the ROI and transparency on digital. This has made the clients realise the importance of having an agency partner in something like brand safety. We can be applying pressure to digital media owners. We will not place our work on your platform on digital network until you comply with the expectations of our clients. Part of what we're doing as an agency is helping clients coming up with what we call whiteness.”
Talking about digital measurability, Aird said, “We are not there where we need to be as advertisers, agencies and publishers. We need to work towards it. There is work still to be done and nobody has an answer for the measurability of the digital medium. But questions are now being asked. We all need to work together to provide clients with the answers that they deserve and that’s where we as an agency can help and support. As GroupM, we have driven the standards of viewability around the world. We have introduced new standards as to what we believe are exceptional.”
Tripathy said, “Every platform has its own metric. Digital measurement is an issue, unless and until there is a single third-party metric that everyone depends on, it is an issue. Some platforms like ComScore are already giving this data, but it is not live measurement unlike we have for TV. The day we have a similar data for digital from BARC, it’s not as complicated as it is made out to be.”
Publicis is trying to create a basic structure that will work across platforms because the most important hiccup is that there is no single way of working across platforms. The client looking at the data has different types of data for TV, digital and there is no connecting string. Like in Google, there are say X million searches for a particular category. How many of these people who are searching are also interacting on Facebook with similar brands? But there’s no data for overlap because there is no connection, no single identifier.
Kango said, “A lot of post facto measurement will be figured out. Even today if a client has the technology infrastructure serving all the creative, a paid analytics solution and a data management platform, and you are collecting the consumer data from the time they saw an ad to the time they took action, you can get a semblance of the customer's journey.”
A lot of people believe that the whole discussion of measurement was started by digital, and that the absence of extrapolation (as in the case of TV), the measurement of ad viewing is absolute numbers and to the point.
Amardeep Singh, Founder and CEO, Interactive Avenues of IPG, said, “Trafficking, optimisation and reporting is a large part of campaign management and this is managed from India for a lot of our global clients.”