Mainline ad agencies won't survive if they don't become creatively digital: Rajiv Dingra of WATConsult

WATConsult is celebrating its 12th anniversary this year and it has been a roller coaster ride for Founder and CEO Rajiv Dingra to grow the company from being a one-man army to a 400-people strong set-up. Not many know that Dingra started his entrepreneurial journey with the startup jobs4freshers.com and then launched one of the first digital agencies in the country. In January 2015, Dingra sold a majority stake in WATConsult to Dentsu Aegis Network. WATConsult is the only Indian digital agency to be shortlisted at Cannes Lions 2018.

Proud and content with the company’s growth, Dingra said, “We always looked at a higher double-digit growth for ourselves. If we look at the last three or four years, we have grown by almost 40% to 50% year on year both in terms of revenue and bottom line and we do not want to slow down.”

Commenting on the current status of the digital agencies in the country, Dingra said, “Earlier digital was a support system for creative agencies. Now it is the opposite. I was very sure about digital being the future. I didn’t think it will take 12 years to get here. I thought we will get here faster. But I’m glad that today digital agencies are leading everywhere and even at a global level, merger of digital and creative hot spots are taking place.

Talking about the changing requirements of the brands and how it is shaping the models of the advertising agencies, Dingra said, “In the next three to five years, it is the mainline agencies that desperately need to be creatively digital otherwise they would not have business. Digital agencies do not need to change anything. They need to become more creative and that is what we are doing at WATConsult.”

Speaking on the ongoing industry discussion on brands wanting to have full-service agency models, which will, in turn, threaten the existence of separate digital agencies, Dingra said, “I doubt that because the full-service agency module sounds great but it is practically not possible. The culture of a digital agency is very different from the culture of a mainline agency. You will never be able to get the pace of a digital agency. Moreover, it is also impossible for mainline agencies to have a 350-people strong team on digital as we have.”

Excerpts:

When you started 12 years back, did you think digital will become the mainstay of the advertising ecosystem or the industry will have so many digital-only agencies?

Earlier digital was a support system for creative agencies. Now it is the opposite. 12 years is a really long time and it is very difficult to foresee that long ahead. I was very sure about digital being the future. I was very young then and very optimistic. I didn’t think it will take 12 years to get here. I thought we will get here faster. But I’m glad that today digital agencies are leading everywhere and even at a global level merger of digital and creative hot spots are taking place. This is showing how digital is playing a lead role in advertising overall across the world. In India, things are moving to digital very quickly now over the last year or so. We also are seeing a lot of participation and opportunity both by brands for digital agencies to make a difference as well as right at the front of the table when it comes to looking at brand briefs, creative ideas and overall campaign execution. From that standpoint, it is really good. From the spends standpoint, it keeps increasing by 30-35% each year and digital should be about one-fourth of the entire advertising in a couple of years. And that will be a first big milestone for India. After that, it is only looking up and positive for the next four to five years.

What targets have you set for yourself in the future?

We always looked at a higher double-digit growth for ourselves. If we look at the last three or four years, we have grown by almost 40% to 50% year on year both in terms of revenue and bottom line and we do not want to slow down. Having said that, the other target is qualitative where we are trying to make a mark as an agency being recognised by global creative awards. That’s a creative qualitative yardstick for us to judge ourselves.

The rapid growth of digital has thrown bigger challenges too, which include ad fraud, brand safety and measurement. How do you tackle them?

I don’t think these challenges ever have been a no go. It means these challenges don’t ever stop the growth of digital. What it does it brings to light the corrections people need to make in order for it to grow even faster. It is great that the industry is discussing all this. A lot of work is already being done in these areas of brand safety, viewability and ad fraud. The digital giants like Google and Facebook are putting into place the ways and means in which it is addressed. Within WATConsult, we follow all the global practices adopted by Dentsu Aegis Network globally. These are standard practices to make sure that brand safety measures are taken.

Content marketing is becoming prominent after programmatic in digital. How are you planning to up your content play?

First is the creation of content and we knew this almost four years back that creating content will the big job of agencies. You would not be able to just rely on advertising and good design. And hence, we invested in creating our in-house video production unit. WATConsult boasts on probably one of the largest production teams within the agency circles. We have about a 25-member team purely in video content production other than the content marketing team. Content marketing has been at the heart of what we do here at WATConsult. Putting a production team in place four years ago and scaling it to what it is today across Mumbai and Delhi shows our core focus. We produce six to eight films a month or 25 to 30 films a quarter for various brands.

If you look at the number of videos that we create for social media, like a 10-seconder for Instagram or 30-seconder for YouTube, the number of videos would be between 150 and 200 every month.

The pros and cons of AI are being constantly debated. How is it going to change things for digital agencies?

The secret sauce of AI is going to be in the backend where agencies actually use AI to create dynamic creatives and campaigns for brands and map what point of communication will work for a brand. Frontend use of AI is going to be much lesser than the backend use of it. It will become the machinery on which the entire advertising industry would work over the next seven to 10 years. That’s where I feel the impact of AI is being undermined by people as of now. But it is going to be huge over the next five years.

With brands looking for more of full-service agency models, do you think that going forward requirements for separate digital agencies will reduce?

I doubt that because the full-service agency module sounds great but it is practically not possible. Even for us at DAN, we have the opportunity for a client to come and take full agencies if they want or separate agencies. They can always work with three of us within DAN and have separate specialists in case they want. I believe that is the best model for clients because if you have one agency it can’t be a specialist at everything. The culture of a digital agency is very different from the culture of a mainline agency. You will never be able to get the pace of a digital agency. Moreover, it is also impossible for mainline agencies to have a 350-strong team on digital as we have.

Having said that, I totally agree that an integrated model is going to grow in the future. But I do not see marketers compromising quality for the sake of integration. The networks or the agency groups that will be able to provide integrated value with great quality will succeed.

Prasoon Joshi once told us that the concept of a digital-only agency is a misnomer. Do you agree with that statement?

I disagree with that. Digital is a medium of specialisation. Ultimately the agency is creating advertising content. Today’s digital does far more than what a creative agency does. The time of the 30-seconder ad has gone. I would even go and say, who watches TV. Look at what the millennials are consuming.

Digital-only is a specialisation and it is not a misnomer from the perspective of advertising. It is not saying all advertising should be digital. The digital-only agency cannot be a misnomer because WATConsult is a digital-only agency and we are 350-people strong after 12 years, which is a good enough time for not to be called a misnomer.

If he would say that in the future digital-only agencies might have difficulty to grow and so on and so forth, again there I feel that in the near future there seems to be no problem. In the next three to five years, digital would see about 30% growth. In the next three to five years, it is the mainline agencies that desperately need to be creatively digital, otherwise they would not have the business. Digital agencies do not need to change anything. They need to become more creative and that is what we are doing at WATConsult. Digital agencies are going to up their creative prowess and creative agencies are going to up their digital prowess. Ultimately all of them will become one because that is where the industry is moving towards. Advertising will be massively digital in five to seven years.

He is right from that perspective that there wouldn’t be something like digital-only agency because everybody would be doing digital. But is it a misnomer today? No.

Majority of the marketers are still not convinced about the ROI they get on social media spends. How does WATConsult convince its clients?

Marketers are never going to be happy about ROI because their targets of sales keep upgrading every quarter. So when you have a moving number growing by 15-20% every quarter, they will move the number for digital also. If digital did not deliver ROI then Google would not be a $40bn enterprise where the large part of it comes from search and performance business, which is ROI-driven.

There's an increasing trend of big brands setting up in-house digital teams. Does that worry you?

Samsung, LG have their in-house agencies but they still look for options outside. It is only the media part that they do in-house while they outsource creative part. The problem with having in-house agencies is that after a point if the business is 100% guaranteed to that team, why would they go the extra mile?

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