Our move into digital was driven by consumers not margins: Alastair Aird, Global Chairman, Wavemaker

By merging Maxus and MEC into Wavemaker, Alastair Aird, Global Chairman, Wavemaker has infused technology into the system and is trying to make the new agency future-ready by all means that he can.

Sharing his plans about unleashing the growth potential of Wavemaker India, Aird said, "I want India to be leading our future product. I want to adopt things coming out of India and to scale globally. It is a two way thing – of course, I want to help grow our India businesses and do everything we can, I want to steal ideas with pride from India and bring them to the rest of the world.”

Talking about the complexities of merger and addressing the apprehensions of clients, Aird said the foremost task was to take clients into confidence and find out what sort of agency they wanted. “We are always pretty mindful of ensuring the agency we create is right for that individual client rather than telling them where to go.”

He said that though digital is growing at an unprecedented rate, print media was still incredibly important in India. Aird said that clients have now started questioning the measurability of digital and want to know more about the ROI on the medium.

Excerpts:

Wavemaker is born. How is it going to change things for GroupM and WPP financially? Will it have any impact on the billings financially?

It won’t change anything in terms of finances because we are just bringing two businesses together. Billings and revenue are the same as they were yesterday.

It will grow the future of our business and the new offer will be attractive to our existing clients. Also, more importantly, what it will do for GroupM and WPP is the new clients that it will attract, and hopefully it will foster in new areas with our existing clients. What we are building is an e-commerce practice which we have in Europe; we are now going to bring it to India. It will provide us with the revenue opportunity in India. We have a content business here and I believe global expertise will help to accelerate it. It will be bringing new services and new disciplines into Wavemaker in India, which will drive growth, along with bringing in new clients which will also drive our growth.

Initially it was said that Maxus was a strong brand in India and hence it would live for some time. What made you change your mind?

That's a very good question. Whenever you are doing a merger, you normally hope to have done all the preparation work before it, but when you are talking about bringing together two businesses of this size and scale and the fact that we needed to speak to clients ahead of an announcement, the honest answer is that the announcement happened quicker than we would have liked. With Srini (CVL Srinivas), Kartik (Sharma) and Gangs (T Gangadhar), we wanted to talk to our clients first before the announcement. So, that was our reason that we wanted to be sure of what we were doing was right for our clients. And the feedback from many of our clients was that Maxus is an incredibly strong brand in India and MEC has been successful in the past, but what people could see was that by bringing the two businesses together globally, the benefit of that global organisation would come to fruition, here in India as well. It was only a matter of weeks, once we had spoken to our clients here, everybody agreed and were comfortable with Maxus becoming a part of Wavemaker.

As for the strong brand that Maxus India is, let me tell you that the reverse is also true. MEC is the strongest brand in Italy and is one of the two strongest brands in UK and Germany. So that was always going to be a tough decision, but you have to move forward as businesses. The point when you should change and reinvent yourself is the point when you are strong, not the point when you are weak. So, this for me is taking Maxus and making it stronger, and taking MEC and making it stronger as well.

What this brings for Maxus is the technology, strategy and thinking of a network that is much bigger than Maxus was globally, and so for MEC. This is making Maxus from a 3000 people agency to nearly 8,500. The opportunity that comes with the scale is more important than the scale of an agency.

How did you deal with conflict of category?

We wanted our clients to choose which sort of agency they want. We hold to a position that it was right for our clients and when I spoke to Srini this morning, he said, “In 17 years, we may have lost clients for other reasons, but we have never lost a client because of conflict.” We are always pretty mindful of ensuring the agency we create is right for that individual client rather than telling them where to go.

Wavemaker in its earlier form as MEC’s global content division was Google’s partner when it started a programme aimed at teaching agencies about content management and the fundamentals of the strategy. Does this mean that the new entity will have more focus on video content than before?

You are absolutely right. I announced that programme with Google in Cannes in June 2016. We launched that partnership with Google. As I have said, content will be at the heart of what we do. We will be looking to partner with people across all areas, Google included, to drive that content growth.

So then in that case, how will you manage the expertise in traditional media that Maxus and MEC have with business in India?

The market in India still has a very strong TV and press. It’s strong across all areas. When you compare the digital to other parts of the world, it’s low. But that’s also because of the strength of other media. So, by definition, yes we have strong traditional capabilities, but that is like every other agency. But we also have a hundred people in the content space already in India. So, this is about accelerating what we already have. We have significant digital expertise in India as well but that is a part of the mix. Do I expect those bits to grow faster? Yes, digital and content will grow faster. At the same time, I believe that TV remains the most powerful medium in this market, and print is incredibly important as well. India is the only market where print is growing. It seems like it is here to stay for some more time. I argue content is not just about digital content, it’s about content in all forms.

But isn't the shrinking margin in traditional media a reason why everyone is moving to digital?

Yes and no. No because digital is more work-intensive so you require more people to deliver it, and no because TV is still the most cost-effective media in India. But then again, in anything that is new, margins tend to be higher in the early years and then they drop down. I am not sure if I completely agree, but that’s not why we are doing it.

But look at the pace at which the Indian agency networks are moving towards digital. It has almost doubled in the last one year.

We’ve been moving towards digital for around 10 years, and at this same speed. But the reason for moving was not for the margins, but because that’s where the consumer is moving and hence, that is where our clients will move. So our move into digital, both as MEC and as Maxus, globally was driven by consumers.

Talking about Wavemaker in India and outside India, what is the split of digital vs traditional media business?

Our global revenue gets over 35 per cent contribution from digital. 3,000 of our 8,500 people were digital but now everyone is kind of digital. For MEC and Maxus, this is not something that has happened suddenly. But you are absolutely right with the speed of change in India. The digital in India is growing by 30 per cent, from a relative lower base of 13-15 per cent.

What are the tools that are being used to drive insights from data, for Wavemaker?

(m)platform is a GroupM tool, which is essentially bringing in first party data from clients and second and third party data from our media partners, individual consumers and aggregating that billions of pieces of data around the world. This then allows us to identify consumer groups from that data behaviour which projects what their behaviour in the future will be. We are making messaging much more bespoke and focused about brands rather than just mass.

As data becoming outdated as fast as the devices change, is this pace being acknowledged by the industry players?

Data is the most overused word and data on its own is nothing. It is just a combination of 1s and 0s. It exists in huge data banks but unless you take that data and use it to drive insights and turn it into actions for brands, data in itself has very little value. The value comes through our ability to activate that data on a purchase journey and provide insights for different touchpoints clients can then use to reach customers at the right time with the right message and then drive sales.

I am in complete agreement with you that data needs continuous updating and that data on its own is nothing. We are in process of making our managers understand about the technology changes that we will be making.

Indian agencies are getting ready for the future and in that process they are banking on lot of automation across functions. How well equipped is Wavemaker to embrace this?

That is a part of what we are doing at GroupM bringing two systems together that gives us the opportunity to look up what we need to automate. We are looking to automate a lot of our manual reporting and manual processes as a part of this merger. Our reason for doing that is our people to be spending as much time as possible looking at insight on client’s business rather than looking at numbers and creating manual reports. We're making progress but we need to move faster because when I look into the future I see many of our people focusing on insights on the basis of data. There are a lot of technology systems that we are developing that will be announced later on.

Do you think that in that case, the skillset of your employees also need to change?

I think in every career and job, we need to adapt. We will still need analytical people who are able to crunch data and sense data and other people who are able to make data into strategy. Globally, I have seen that we need wider and more diverse types of people. Engineers and people who are experts into algorithms are being hired. We need people from different walks of life.

Considering the practices that network agencies develop are being used in India almost concurrently, is India at par with the rest of the world when it comes to being future ready at this point in time?

The Indian market is behind the world with just 13-15 per cent, to a 50 per cent in the UK. But when I look at some of the systems that we are developing in India, we are right at the forefront. For example, MESH is our ability to analyse in real time the responses for social media posts. It is fetching the data from our clients’ campaigns online and seeing how they are performing in real time. That’s exactly where our business needs to be going. So, on one hand, I think the market is playing catch-up, but in other aspects, we are lean and I told my team today that I want India to be leading our future product. I want to adopt things coming out of India and to scale globally. That’s a part of the reason why Kartik sits on our global board and India is an important market for us because it is a two-way thing. Of course, I want to help grow our India businesses and do everything we can, I want to steal ideas with pride from India and bring them to the rest of the world.

Globally the digital medium is failing on several counts primarily on transparency. Why agencies are still forced to see future in digital?

That’s a burning question. Brand safety has been a large part of what we have seen in 2017. P&G is questioning about its ROI on digital. In many ways, people said we are going to spend on digital and the question comes, ‘how much?’ Why are we spending on digital? What is the return on digital? What is the environment and context within which we will be safe? These are the questions when asked in the offline media, you would be expected to provide an answer to and I think we are playing catch-up. Digital marketplace publishers have expanded in such a rapid pace that we are not playing catch-up. Some of the disciplines and guidelines we would expect to be in place.

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. Then we have to be comfortable with the number of criteria before we all allow a client’s adverts to appear on that platform. So what you have seen this year is growing up of digital and the same question the clients would ask about traditional media and now about digital.

Do you think this accountability from publishers and content providers will come in soon?

It is already happening from a brand safety perspective. The investment that Google and Facebook are making into insuring to have a friendly operating safe environment. About digital measurability, 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.

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