For me, there is absolutely zero tolerance for corruption as there is nothing called slightly corrupt, said Rohit Ohri, Chairman and CEO, FCB Group India.
Ohri’s comments come in the context of recent revelations about many serious cases of corruption in the industry, which include kickbacks, bribery and billing for campaigns that never took place.
“It’s imperative that our working principles are not compromised, irrespective of any kind of pressure,” he added.
In a freewheeling interview with BestMediaInfo.com, the advertising veteran spoke about a range of issues that are critical for the growth of the industry.
Sharing the agency’s growth plan, he said that 2022 will ensure they are on a solid growth trajectory.
"2022 will be more about reigniting growth and resetting our priorities for the next 3-4 years. The pandemic has pushed us all into a survival mode. We all need to move into the thriving mode," he said.
At an industry level, he said the next few years could augur very well if the sector keeps reinventing to stay relevant.
Talking about how digital agencies can make more margins in this tight market, Ohri said they shouldn't focus on the low-hanging fruit such as social media and website management but more on mining data, where the money is.
FCB India recently underwent organisational restructuring. Some say it was done because Cannes Lions did not permit FCB India as an entrant company and asked you to assign it to its agency units. But we are sure there's a better reason for undertaking these changes at a group level.
We indeed used to enter Cannes as a group company. A lot of networks do it. But this time they said we can’t do that. Hence, we entered as individual entities. But it has nothing to do with the fact that we’ve restructured into three independent full-service creative agencies. The idea of restructuring for the awards is so far-fetched. We are completely focused on our creative work and awards are merely a by-product.
These organisational changes have been made to better serve the needs of our clients and brands. Our strategy has been guided by a couple of things.
First is the geographical focus. Our three agencies will now focus on three separate geographies. Our client’s marketing plans are built for many Indias, not one India. Our restructuring is a reflection of this new reality. FCB Interface will further strengthen its Southern India presence. FCB Ulka will focus on Mumbai and Western India. FCB India will focus on Northern and Eastern India. Therefore, we separated the agencies from the geographical perspective to give better focus to clients’ businesses.
Second is talent focus. Talent above all else is our organisational mantra. This new structure enables growth for our best talent. Further, I want to create my next level of leadership. One thing I care about the most is legacy. The previous management left the organisation in great shape. I too want to leave the organisation in great shape so that it lasts another 60 years (FCB is celebrating its 60th anniversary this year). I believe great leadership is only measured by how good the company is after one leaves. Very often, leaders build their egos instead of building organisations. They would like to believe that if they leave, the company will collapse.
Now each of our three agencies has CCOs, CEOs and CSOs organised as leadership partners. This is enabling us to be completely aligned and focused on what matters most in our business – the work.
Third is the growth focus. Today, we are called for most big pitches in India. And oftentimes, business conflicts arise. To ensure we manage these conflicts with integrity, we’ve created there completely independent agencies with their own CEOs, CCOs and CSOs. Further, there is geographical separation.
Are you satisfied with the way you’ve been able to transform FCB well?
FCB has always been a solid agency. I just had to give it a new direction. I feel a true sense of accomplishment in building a great agency culture and a leadership team that outlasts me.
Are you hinting at retirement?
(Laughs) I’ve been in the business for a very long time. I started working in 1989. I feel this is the business of young people. One needs to have new ideas and new perspectives. While experience is important, one needs to make way for the new generation. Covid has changed the dynamics of business. The new normal needs new blood.
There are a number of digital agencies in India. However, the margins for them are very low as ad spending is mostly skewed towards digital media buying. What is your take on this?
It depends a lot on what you are doing. Many people take on the easiest and lowest hanging fruit such as social media management and website development. That’s not where the money is. The money is in mining data. Figuring out who is buying and what is the consumer buying is very important. Understanding the bottom of the funnel has become the most important thing. Until recently, we have been focusing on the top of the funnel, where one creates brand awareness, desire and brand value. Today, more and more clients are focusing on closing the sale. They are looking at better targeting and personalisation. We are seeing several traditional brands that used to spend more on TV advertising rapidly moving towards digital.
How has the year been for FCB? Will the agency be able to match the growth targets that were set for this year?
This year has been better than the last year. We are having double-digit growth this year as well. It’s not at the level we had thought, but we're hoping to meet the targets by the year-end. We have won some really big businesses and that has given us a lot of momentum. In total, I am seeing a definite positive uptick. 2022 will be more about reigniting growth and resetting our priorities for the next 3-4 years. The pandemic has pushed us all into a survival mode. We all need to now move into the thriving mode.
The industry has given a lot of fame and name to you. How have you planned to give it back to the industry?
This industry has made me what I am. I want to create leaders who will lead this industry going forward. Over 37 years of my career, I have spent time helping build future industry leaders. I have spent time with them by sharing my knowledge and perspective. In JWT, people used to call me papa. I don’t know whether that was something positive or negative, but it didn’t deter me from constantly guiding and advising my team. And always being there for them.
I have been involved in AAAI closely for 7-8 years. Right now, we are working on 3-4 big initiatives that will help the industry recover from the negative impact of the pandemic. We are looking to help talent who have lost jobs during this period through the creation of a digital platform that enables member agencies to access this talent for assignments, freelance opportunities, and projects.
Very soon we’ll be launching an initiative that will act as a deterrent to the misuse of agency intellectual property. Some clients invite 15-20 creative agencies for pitches. Oftentimes, agencies don’t win the pitch, but their work gets used by the client. We’re creating an idea ‘copywriting’ mechanism that will act as a big deterrent to this practice.
Recently, we have started hearing many serious cases of corruption in the industry, which include kickbacks, bribery and billing for campaigns that never took place. Isn't there is an urgent need to stop this?
I won’t say there is an urgent need to stop this. I am wondering why it is happening at all. Every organisation has its own governing rules and internal audits happen at regular intervals. There should be no possibility of any malpractice.
For me, there is absolutely zero tolerance for corruption. There is nothing called slightly corrupt. The most important thing is to preserve the trust of our clients. The brands share confidential information and marketing plans with the agencies. Agencies should respect and reciprocate that trust. If a client and agency relationship is based on mutual trust and respect, the brand work that is created is always outstanding.
The truth of the matter is that the pressure from clients is increasing, and the margins are only reducing. Traditional media spending is coming down and digital media spending is rising. A lot of what you thought your core competence was is no longer needed. Today, the talent war in the market is unbelievable. Despite these pressures, it’s imperative that our working principles are not compromised.
Is there a way to not let the future generation of leaders in the A&M industry get involved in corruption?
This can happen by only setting examples. They need to see that one can be successful by being 100% honest.
Do you think another reason for corruption is the lack of fear of losing business? If one brand won’t work with a particular corrupt agency, there would be another brand willing to work with that agency.
There is always a loss of reputation for agencies involved in corruption and they have to pay the price for that. There may be some clients with different values who would still work with these agencies. That’s why they say birds of a feather flock together. Although, I have never come across clients who would endorse, encourage, or do anything like that.
There is another issue about not passing the benefits to clients whether it is coming from discounts on production or any other means. How is this hurting the industry?
Clients must be fully aware of what they are paying for and where and to whom their money is going. There are no shortcuts to building integrity and transparency.
Some agencies are passing clients’ work to smaller agencies without their knowledge or consent, compromising data privacy. How can a client mark itself safe from such unethical practices?
These are methods that some agencies are using to cut costs. By doing this, one wouldn’t have to bear the cost of a studio, the cost of people with very specific skillsets. The big issue would be if clients aren’t aware of these methods their agency is deploying to cut costs. If any agency is working with a third party, then there need to be checks and balances for the third party as well. The clients need to be informed about it.
We don’t outsource production work at FCB apart from some video content production. We have a large agency setup with almost 100 people in the studio and production services.
Weren’t you ever under pressure during the pandemic to cut costs by reducing studio size and outsourcing work to smaller agencies?
Of course, we were under a lot of pressure to cut operating costs. The silver lining of the pandemic was that office operation and travel costs came down. We created some degree of savings by trying to ‘variablise’ our fixed costs as much as possible. There was a negative impact on the margins, but this was well understood by the global company. Last year, only the management board took a salary cut; we didn’t cut the salary of any of our employees. And this year, we have even given increments.
Many times, corruption challenge arises at senior levels, which means it is deep-rooted in several agencies. Who will become the watchdog for senior-level management at agencies?
The senior-level people of the holding company networks take responsibility for this. They ensure that through internal audits and various other checks and balances, the ‘watchdog’ never sleeps.
We often hear US-based agencies are particular about fair practices and processes. What will it take for firms in India to instil those standards?
Our systems and practices at IPG India are rock solid and fail-safe.
Shouldn’t the AAA of I or ASCI come up with guidelines for fair practices?
I don’t think AAAI and ASCI can look into corruption in our industry. The role of AAAI and ASCI is completely different. ASCI ensures that advertising is not misleading consumers. AAAI is an industry body to take up industry-specific issues. The courts and the law of the land are the guardians against corruption.
What will it take for India to be in parity with large global markets when it comes to comparing ad spend vs GDP? Is it that brands are not spending much on marketing? And are agencies and publishers willing to work for less?
Economic development drives ad spending. Markets with high per capita GDP see higher marketing spends. India is a multi-layered society with tremendous income disparity. Even today, advertising isn’t reaching a lot of people in the heart of India. Most marketing plans still focus on penetration.
That said the price of ad slots and sponsorships buying for the upcoming India-Pakistan Cricket World Cup match are unbelievably high. Clients are spending hefty amounts on celebrity endorsements. If you look at Virat Kohli, he is among the top 10 highest-paid celebrities in the world. So, spends are going up.
The next few years auger very well for the Indian advertising industry, provided we reinvent and stay relevant.