These are difficult times for India’s advertising industry as clients have been reeling under the economic slowdown, leading to almost very little or no growth in their ad spends.
In an interview with BestMediaInfo.com, Kunal Jeswani, CEO, Ogilvy India, said Q4 of the current calendar year has already been pretty slow for the industry given that all major events, including elections, are already done. Jeswani said that though Ogilvy has been able to grow at 10% in 2019, the growth may continue to be weak next year as well.
“We’ll gun for growth between 7% and 10% but it is going to be very, very hard,” said Jeswani.
He said that slow growth doesn’t mean there’s no money in the market. “We need to win more business. We need to show clients the value we bring and we need to increase the scope of our relationships to grow,” he added.
Jeswani said retaining talent is one of the challenges that the industry was facing.
How has the current year been in terms of growth?
2019 has been very good for Ogilvy India. We grew by 10% in a very tough market. I have to say that this growth is not organic. Our growth has primarily been driven by new business wins.
What is the overall target the agency has set for itself in 2020? What will be your strategy to achieve it?
2020 will be a tough year. Elections are done. And we are beginning to feel the pinch of the slowdown in Q4 of 2019. We will gun for 7-10% growth, but it is going to be very, very hard. The best way for us to grow is through large, integrated, retainer-driven new business wins.
My push to all our office leaders is to focus on winning new brands from existing clients and new large, integrated businesses aggressively. I do not believe we will grow sustainably by chasing fractured digital businesses or small project businesses.
How has digital performed? What more can we see happening on this front?
Today, digital cuts across every aspect of our business. We work with clients to deliver on all their brand communication needs across digital transformation, customer experience, digital advertising and social content and communications.
The intent, however, is to do more integrated work. We want to lead brand communications across every consumer touch-point indeed as we do for Vodafone, Mondelez, BMW, Bajaj Auto and many more clients in India. You will see more of this in the years to come.
How challenging has been the overall business environment?
The biggest challenge is organic growth. It is getting harder and harder to get existing clients to cover even basic inflation in salary costs. Everyone wants the best talent on their businesses, deeper engagement, more senior resource time, better operations and faster turnaround times. And everyone wants to keep costs flat. It is not logical, and it is not sustainable. Eventually, everyone gets only as much as they pay.
Retaining and acquiring the right talent has always been a vicious circle for the industry. Last year, we saw some significant exits like Ajay Gahlaut and Azazul Haque leaving the company. Kapil Arora was elevated to take care of 82.5 India, leaving his position in Delhi vacant for quite some time. As an agency, how do you intend to solve this problem? What can help retain the right talent for long and also fetch more skilled talent from outside?
Attracting talent is not an issue. Retaining talent is our biggest challenge. Across the creative, strategy and business leadership, I truly believe we have some of the best skills in the business. Ogilvy is a great place to work, and most people come to us knowing they will get to be part of great brand journeys and create great work in their time with us.
However, everyone has different aspirations, and sometimes their aspirations move faster than the reality of what Ogilvy can offer them. We do everything we can to give our best talent all the opportunities and the money we can. But sometimes 'what we can do' is not enough, and we lose them. That's okay too. It allows us to bring in new blood — people who come in with new skills and new energy.
Delhi has seen a lot of leadership churn recently, and the result is that we now have a bright, young energised new leadership team in place. Shouvik Roy comes in to head the Delhi office in December and has great partners in Ritu Sharda (Creative) and Rohitash Srivastava (Strategy).
The other blessing is that when we have a senior talent gap, we also have strong national leaders like Madhukar Sabnavis, Hephzibah Pathak and Prem Narayan, who work hard to ensure our clients don't feel the difference. They reach out, support the brand teams and ensure clients feel a real depth of leadership engagement, where ever they need it.
Earlier this year, Sonal Dabral was promoted to CCO of South and South East Asia, while holding his current Vice-Chairman and CCO position in India. Before this, his focus was only India; now, he has to take care of other offices as well. Do you think there is a need for an Indian creative head at the agency, whose sole focus is India?
I believe the intent is more important than the designation. Piyush Pandey is the Chief Creative Officer of Ogilvy Worldwide, but he is based here, feels directly responsible for India, and still makes time for any client who needs him. Sonal Dabral is the CCO of South and South East Asia, but he is based here, feels directly responsible for India, and still makes time for any client who needs him.
We also have fantastic India Geography CCOs who are 100% focused on their clients — Sukesh Nayak, Kainaz Karmarkar and Harshad Rajadhyaksha in Mumbai; Kiran Anthony and Mahesh Gharat in Bengaluru; and Ritu Sharda in Delhi. There is no shortage of creative leadership talent focused on India.
According to you, what were the factors hampering the growth of Indian creative agencies?
There is no doubt that the market has slowed down. Many clients felt the pain and many clients also used the environment as one more reason to negotiate harder. We've all seen that in 2019.
However, there is also the reality that client media spends continue to grow. The money is there, and we have to demonstrate the value we bring to ensure we are paid fairly.
Sometimes you need to hold your ground at the risk of losing clients. Today, most of our industry revenue is built on retainers that are based on scope and resources required to deliver that scope. That is a fair system. It is up to us to lock the scope down. Up to us to fight to be paid fairly for the scope. And up to us to ensure we are paid appropriately when the scope changes or is exceeded.