Turning five years old today, Wavemaker India wishes to become India’s most wanted media agency.
“I want Wavemaker India to become India's No.1 media agency. We have been No.2 on the charts for a while and now I hope to become No.1 soon,” said Ajay Gupte, CEO – South Asia, Wavemaker.
Being heavily invested in content, commerce and data since the time Maxus and MEC were merged to form Wavemaker, Gupte told BestMediaInfo.com that about 25% of the agency business comes from these new areas of growth.
Wavemaker India has been growing steadily every year and on this front, he said, “This growth has come on the back of our ability to do a lot more for our clients and win new businesses. Of the 25% that we have been growing every year, almost half of it is organic growth and the other half is new business growth.”
The agency won several awards in 2022, including 1 Titanium, 2 Golds, 2 Silvers and 1 Bronze at Cannes 2022. Wavemaker was also awarded the Agency of the Year at Emvies 2022.
Gupte believes, “It’s our passion and the entrepreneurial spirit in the DNA of the agency that sets Wavemaker apart from the rest of the agencies.”
In an interview with BestMediaInfo.com, Gupte chalks out the growth plan for the agency and talks about the struggling Indian adex, creator economy and key ingredients of becoming a future-ready agency.
What have been the ups and downs of Wavemaker’s five-year journey in India?
Being the youngest media agency, it has been a wonderful 5-years journey for Wavemaker in India. Out of these five years, almost two and half years have gone by being at home. In these years, there have been a lot of highs starting with several awards that we won. It has been very gratifying. It is a testimony to the kind of work we do for our clients. Our biggest highs are the verticals we have been able to put in place, which go beyond basic media services, whether it is e-commerce, data, or content practices. We have created capabilities that are supporting our clients better and helping us to get new clients on board. We have also been leading the new business charts.
The Covid-19 phase was really tough for all of us. Our biggest lows in these years have been a few personal losses within the Wavemaker family that really hurt us.
What are the near and long-term objectives set in place for the agency?
We aim to become India's most-wanted media agency, which was inspired by our Global CEO's desire to become the world's most-wanted media agency. Similarly, Wavemaker’s North Head Mansi Datta is very clear that she wants the agency to be the most wanted agency in the North and so on and so forth. Today, clients are looking for support not only to build awareness but also for engagement and sales. They want us to provide media services for awareness, content services to engage better with the consumers, and e-commerce and social commerce to increase sales. We need to build these capabilities, for us to become the most wanted media agency.
From the long-term perspective, I want Wavemaker India to become India's No.1 media agency. We have been No.2 on the charts for a while and now I hope to become No.1.
What are the new in-house future-ready capabilities built by the agency to help brands meet consumers at every level of their journey of buying products?
We have been working on enhancing our data, content and sales capabilities in-house. Culturally, we have been investing ahead of the curve. We built our digital practices at a time when other agencies did not even know they have to invest in digital. We built our content practice way back in 2005. Today, we provide e-commerce services to more than 25 clients. We are heavily invested in content and analytics practices. About 25% of the business comes from these new areas of growth, which is exceptional.
What sets Wavemaker apart from the rest of the agencies, other than offering better ROI for clients?
It’s our passion and the entrepreneurial spirit in the DNA of the agency that sets Wavemaker apart from the rest of the agencies. We have all the media capabilities in-house which allows our people to cater to the diversified needs of the clients.
Will 10% annual growth remain the norm for a while? How long and what will it take for an agency to perform extraordinarily well?
We are growing at the minimum rate of 25% every year and that continues. This growth has come on the back of our ability to do a lot more for our clients and win new businesses. Of the 25% that we have been growing every year, almost half of it is organic growth and the other half is new business growth.
Going forward, we’ll see a little bit of a challenge in the industry because of the margin pressure on the clients’ side. Also, the purse strings of the investors have been tightened, which has made the new-age companies more prudent in their spending. A lot of start-ups have not been spending as much as they used to. Given that situation, if we keep maintaining our 20-25% growth every year, we are on a very good path.
What can agencies do to increase margins?
The agency margins are always going to be under stress because of stiff competition. Desperation to win businesses has led to a decrease in rates at which agencies work for the brands. Why wouldn't a brand not want to work with an agency at a lower rate? But the onus lies on the agency to create a differentiated product. If my agency does something which no other agency can, then of course the client would want to work with us and be ready to pay for the differentiation we bring to the table.
25% of my business today is non-core services. These services are only going to grow in the future. Today Web 3.0 is very small, but we have a team working on this front for our clients. We have done a lot of work for clients in the Metaverse, NFT and the augmented reality space. We are gaining expertise and whenever an opportunity would come in this space, we would be able to make the most of it. These are the kinds of initiatives which will help us stay profitable because core media planning services are only going to get cheaper and more difficult to do in the future.
Do you see a future in Metaverse for your clients or most of the investments that brands are doing in this space are due to FOMO?
The young consumer is very used to Metaverse. The advent of 5G and improved devices are only going to enhance the experiences on the Metaverse. Today, while creating quality experiences is difficult in the Metaverse, we are getting loads of learning from there. For example, when we did the Holi party, our site crashed because 18,000 people logged in to attend the party. Each person spent 15 minutes on an average on the platform. At that time, we learnt how to get people on board and make them spend time on the platform. We even collected consumer data from the site. Tomorrow, if we wish to execute something in this space, we will already be having so much learning. Creating Metaverse initiatives is not even expensive because the people who are creating these experiences are not expecting too much money right now.
Elon Musk has shown his commitment towards Twitter by going big on the creator economy. That’s essentially between creators and the platform. In this context, how is the growth of the creator economy going to affect the agency business?
The creator economy is going to massively support the agency business. It is a wonderful vehicle most brands are cognisant of. Today, we no more have to preach to brands about advocacy and influencer marketing. It is now mostly about helping them navigate the space so that they are not affected by fraud and ensuring that they make the most of the influencers they use. We have created Wavemaker Thrive and GroupM INCA that help brands navigate the creator ecosystem. We have invested in software that helps brands filter out fake followers and frauds from the good ones.
Do you think Twitter can become an attractive platform for content creators?
Currently, the strength of the platform is its brevity, which is also its biggest weakness. The good thing about Twitter is that the audience base is already there. If Twitter brings more content creation tools and enables its audience base to create content then the content creators will take no time to make it their haven.
What is eating more from your revenue pie and how are you prepared to deal with those factors?
We have created several revenue sources for ourselves by diversifying into various new-age services an agency can offer. We are no more in competition with just the conventional agencies. Instead, we are now competing with specialist companies along with conventional media agencies. There are times we have entered pitches where there are no conventional agencies participating. Kudos to the specialist companies that are very good at their work and have occupied a small niche for themselves. Our strength lies in the ability to connect the dots and create seamless solutions for clients. For example, my advocacy capability is not disconnected from my e-commerce capability, which helps me produce good work in the social commerce space. It won’t make sense for a brand to work with two different agencies for e-commerce and advocacy.
According to you, how have the economic challenges impacted the 2022 adex projections? In fact, quite a few results that have come out for Q2 show decreased YoY ad spends.
We had a very good first half. Based on that we thought the second half would be better. But unfortunately, it didn't match our expectations. The clients’ margins are shrinking because of increasing input costs. Investor-funded start-ups have tightened purse strings. Also, there is a lot of gloom among the large MNCs headquartered in the West.
But the silver lining of the cloud is that the consumption hasn’t reduced. Offtakes from the shelves are happening. It’s only the client margins which have reduced. Our credit card clients have been telling us that they are doing an all-time high business. E-commerce brands have had bumper years in terms of sales. I hope the first quarter of next year will be better with positive sentiments returning.
How do you see the growth of advertising in print, radio, outdoor and cinema in the times to come?
Outdoor and cinema were very badly hit during the Covid-19 period. They are recouping fast. With the launch of several new films in the theatre, cinema is likely to do fairly well. Outdoor has also started picking up.
Currently, print is struggling and facing a stiff challenge. I don’t know a lot of print houses that are diversifying, getting digital versions of themselves and trying to find new ways to get better engagement with the consumers. Print has the advantage of being closest to the ground. Therefore, their ability to engage with consumers is massive. The print players are increasing consumer engagement programmes. The combination of digital and being closest to the ground are the pivots they would need to stay relevant.
Radio is facing similar challenges. Platforms like Spotify and YouTube Music are easily accessible to people and relatively less cluttered from an advertising perspective. Radio too is close to the ground and they have been leveraging it for a very long time. I have done innumerable campaigns which have helped us connect with the consumers on-ground.
Some people go to the extent of opining that ‘the agency model will end’ in the times to come. To survive, the agencies should reinvent themselves. What is your definition of reinvention?
Clients will always need experts to help them with communication as it’s a very complex world and they need to focus on their product.
Our first pivot was when we formed Wavemaker merging MEC and Maxus. We knew back then that content, data, technology and commerce is going to become very important. Today, we have so many clients using our new-age capabilities because we have invested heavily in these services for six years now. We will continue making the investment ahead of the curve so that we are ready when clients need it. It’s important to stay at the top of it and not lose sight because if you lose that first-mover advantage, it’s difficult to catch up.
What we see today, WPP country manager CVL Srinivas has shown in his presentations about a decade ago. From here on, what will the ‘future agency’ be like?
There are three areas that will be important in the future. Firstly, real-time data, which is the understanding of the audience. Secondly, content creation and proliferation through influencers and advocacy. Thirdly, commerce. I see agencies building capability in these areas.