The year 2019 has been tough for Indiaâs advertising industry but despite the challenges, Wunderman Thompson still managed to win around 100 new business pitches.
In an Interaction with BestMediaInfo.com, Tarun Rai, Chairman and Group CEO, Wunderman Thompson, South Asia, said the slowdown in the auto sector impacted the agencyâs growth figures this year. However an upswing in clients' marketing budgets and new businesses will be a strong double-digit growth driver in 2020.
âWe will be shooting for strong double-digit growth next year as I see our clientsâ marketing and communication budgets getting back to normal,â said Rai.
In terms of a new business strategy, the agency will go for fewer, bigger, more strategic pitches, aiming for a higher conversion rate. Around 15% of next yearâs revenues will be pushed from new business.
Rai said the agency has successfully won more than 100 new business pitches this year and will carry on the momentum in 2020.
The industry is going through a slowdown. How has it been for Wunderman Thompson?
Ever since I joined in 2015, we have got used to growth figures of 20% plus, both in revenue and profits. So compared to those percentages this year has seen more conservative numbers. The economy has been challenging. The auto sector has been impacted the most and we do have a significant number of clients in that sector. Also, some of our larger clients are operating on a media commission-linked remuneration model. Such a model works very well in a growing economy. However, at a time of slowdown and reduced media spends, it has a direct impact on agency remuneration.
What overall growth are you expecting next year? What will be your strategy to drive that growth?
I believe the worst is behind us on the economic front. All indications are that 2020 should see a return to growth for the economy. We will be shooting for strong double-digit growth next year as I see our clientsâ marketing and communication budgets getting back to normal. At Wunderman Thompson, we also have the advantage of getting growth by cross-selling our new capabilities in data, technology and e-commerce to our existing clients. Getting new business from our existing clients will be an area of focus for us. We have also been successful in developing new revenue streams over the last few years. That endeavour will continue. And yes, we have been very successful in new business pitches with over a 100 new business wins this year. We will carry that momentum into 2020.
What were the major challenges faced by the agency in 2019?
We have talked about the economic slowdown. Before manufacturers decide to stop production at their factories, they reduce marketing spends and postpone new projects. The other challenge continued to be talent. In fact, with an explosion in content companies in recent years, platform owners looking to offer creative solutions to their clients and even some clients in-housing creative, the demand for advertising professionals went up significantly. This means more opportunities for our people but it also means a higher attrition percentage for agencies.
What would you term as the significant achievements of the agency in 2019?
We were the second region after North America to launch the merged Wunderman Thompson company. We did it quickly and seamlessly. This was way back in February and we have spent the rest of the year training and upskilling our people and building the Wunderman Thompson culture.
Our new business record has been excellent with over 100 wins across the group in the year.
And Senthil, our CCO, led from the front to sweep many award shows, including Kyoorius Awards, where we debuted this year. We also had an improved showing at Cannes. Our young creative stars got recognition with two of them winning the Young Lions ticket to Cannes. And another two won their passage to Cannes at the Facebook Thumbstoppers contest.
And we did all the above in our first year as a merged company â Wunderman Thompson.
More than a year has passed since JWT and Wunderman merged. How has the alliance benefited the group in terms of new business wins and new talent coming to the agency? Has the game become tougher or more relaxed?
The timing of the merger has been fortuitous. Increasingly, clients are asking for an integrated solution to their business problems. With the capabilities of the combined entity in data, technology, digital and e-commerce Wunderman Thompson is in the sweet spot in its ability to offer a seamless and integrated end-to-end solution that clients want. And this has worked for our existing clients as also for new business wins where we are going in with a unique end-to-end approach.
The other major advantage of the merger has been regarding talent. We are more attractive as a company to young talent as we now have a full suite of communication capabilities within the company. It is a fantastic learning ground for young people and also a great place to build their careers. It has also been beneficial in terms of talent retention.Â The amount of investment in training and upskilling that we are doing is valued by our people and it also gives them more opportunities to grow.
How has clientsâ demand evolved over a while? Has the task at hand to acquire new businesses become even tougher? How well prepared is Wunderman Thompson to do so?
Increasingly clients are looking for an end-to-end solution to their business problems and Wunderman Thompson is uniquely positioned to do so.
Any plans to launch additional services in the agency portfolio for brands? You can talk about the space that you are looking into to step up your game.
As discussed above, the merger of Wunderman Thompson means that there are a whole host of new capabilities that we can offer our clients. From data, technology, e-commerce and digital. Our aim for 2020 is to be able to deliver these in an integrated manner to our clients and be able to do so at scale.
2018 and 2019 were not great years for Contract Advertising in terms of people leaving the agency and business loss as well. What plans are in place to revive the agency?
The temporary blip is behind Contract. With new leadership in place, Contract has got its mojo back. The latest win of the Bata global business is a testament to that. To pitch against global agencies and win a mandate to create and execute a campaign in 13 diverse markets in the world is a fantastic achievement. In Raji Ramaswamy as the CEO, Rohit Srivastava and the CSO and Sagar as the CCO, we have an incredible team at Contract now. 2020 will be an excellent year for Contract. Watch this space.
How much business is added by your digital wings Hungama Digital Services and Mirum in the overall business of Wunderman Thompson Group in India? How do you see it changing in 2020?
The growth of our digital offering has been one of the achievements I have been very proud of since I joined the company. From a very modest percentage in 2015, it has grown significantly. Today, over 20% of our revenues are digital and the percentage is growing. Mirum is part of our global Mirum network and has benefited immensely from that. They are increasingly becoming an outsourcing technology hub for the global network. I see the momentum building in 2020.
2019 has been a year to be remembered in terms of business wins and awards for the agency. How are you planning to raise the bar in the coming year?
You are right, both in terms of creative awards and new business wins 2019 has been very satisfying. Our metric is growth and we, therefore, have to beat this yearâs performance in 2020. We will be pushing for around 15% of next yearâs revenues from new business. In terms of new business strategy, we will be going for fewer, bigger, more strategic pitches. And will aim for a higher conversion rate. On creative, every year is a new benchmark. I would love to see more awards across many new categories this year.