Dominic Proctor, President of GroupM Global, banks on leadership, scale and growth in India to expect market developments to be led from this region in the near future. He wants India to go beyond financial contribution, provide strategic & leadership products and innovation at the global level.
What does the world’s No 1 media agency do to grow even bigger and better? Well, leverage the talent of the youth in a digitally-charged industry, as young people are supposed to have a much better grip of what is going on! Talent was at the centre of conversations during the recent India visit of Dominic Proctor, President of Group M Global, with him launching the company’s youth executive committee Y-Co, to leverage the talent of younger executives in decision-making.
Proctor has immense faith in the current India leadership of GroupM, and rates India as a “net exporter of talent”. “The leadership is very strong in India, as the Indian media business is strong; it always has been. We fully expect to continue to export talent from India. That’s a measure of its strength,” Proctor comments.
On India as a market in the global scheme of things for GroupM, Proctor says he expects market development to be led from this region soon as India has got both scale and growth. “I rate India very, very high up. First of all, it’s got the scale and secondly it’s got growth - two reasons why India is a very important market. One of the challenges in India that Srini (CVL Srinivas) and I discussed when he was considering coming back into the family was to make India go beyond its financial contribution, to make India more important for us in terms of strategic and leadership products, innovation contribution to the company. For Asia in general and specifically for India, the market developments would be beginning to be led from this part of the world while previously it might have been led from Western Europe or the United States,” he says.
Admittedly, India is large in terms of scale, but would India rank amongst the top 10 markets for GroupM? Is it as big as China or smaller? “Smaller than China in terms of revenue, but the fact is that we have 21,000 people globally of whom 1,600 are in India. India is amongst the top 10,” states Proctor.
Driving scale & growth All the GroupM companies – Mindshare, Maxus, MEC and MediaComare strong entities in their own right, and collectively enjoy 38-40% market-share in India. What is the GroupM plan, therefore, to drive more scale? “Our strategy is clearly to have four strong, world class agencies and they each have still headroom to grow further, and for our market-share to grow further. Though there will come a point if we’re successful, when we would probably consider a fifth or sixth global agency, if that’s what the supply and demand require. That would be alongside various specialist verticals, to help support the big four full service agencies. So that would be the company’s line globally,” Proctor declares.
One thinks there is a mismatch between the potential that the Indian economy showed some years back and where it is now. The global economy has slowed down too, and the Indian growth rate has slipped. Commenting on this, Proctor says, “The governmental policy lock-jam is an issue. It is frustrating for international businesses to come here. The World Bank recently published the lead table of countries which are the most difficult to do business in, and India is right up there, which is a frustration, particularly in such a fast-moving business as the media business. The last thing you need is someone slowing it down. But in a more general way, I would challenge it - I think 5% might not be 8%, but 5% is better than 0%, which is what most of the rest of the world has witnessed in terms of growth. We think the marketing and media economy in India is going to outstrip the general economy anyway. So if your government is calling in now for a 5%, it is fairly pessimistic. If the general economy would grow at 5%, the media economy would grow at 7-10% or beyond.”
Therefore, when Team India does the growth forecast, would Proctor depend on how the economy is going to grow or would he look at the larger picture and say that new companies coming in would add more money? “Both,” says Proctor. “We can’t revise our forecasts. But right now we are doing it through our global forecasting process, and calling it a 10% this year. That would get modified upwards or downwards depending on the financial and political situation, how it develops in India. But I wouldn’t be too sure; I think Indian politicians and Indian business can sometimes go a little bit downbeat. I’m rather optimistic about India than quite a lot of Indians.”
Faith in Leadership Proctor proclaims great faith in the leadership in India. “Vikram (Sakhuja)’s role is a global role; he still lives in India and therefore continues to have a major input in our Indian business. He is a well known and respected character here in India. But his role is to manage Maxus globally. He has got an interesting challenge in the sense that the management team for Maxus is spread around the world. It’s not centered in New York, or London or Mumbai, it’s a global company centered globally,” he says. “On the other hand, Srini’s role is going to be very, very different. He will take over what Vikram had previously led and Srini was previously part of all these years ago and develop it further for the next phase of our developments in India. It’s a much more India focused role for him.” Challenges in india The challenges that Proctor sees before GroupM in India are the same as those faced globally. “Actually it is a kind of constant reinvention to take advantage of and to prepare for the new digital economy. It’s relatively a small part of the Indian economy right now, maybe 5% or something, quite obviously that is going to grow exponentially, and we need to be ready for that. So that requires a lot of investment in technology, in training, in people, it requires people to reinvent themselves and open their minds to new ways of working. That’s a global priority,” says Proctor.
Another priority is to continue to grow the business, not just horizontally, but in terms of billings, media planning and buying, and diversifying the company. “One of Srini’s key objectives is to diversify the company by growing specialized services to the point where they are delivering not just what the clients want now from the broad company, but what we anticipate they would want in the future from a broad company. We’re in no doubt whatsoever that our core business of media buying and planning will remain our core business. That’s not going to change nor should it and we’re proud of that. That’s the key to what we do. But beyond that, and I’m sure you hear this from the other agency groups as well, the challenge is to develop whether it is content play or whether it is analytics skills or whether it is activation skills… there is a whole play of different specialist activities where clients have a choice, either they go to a whole bunch of different specialist agencies or they come to one integrated system which is what GroupM and its agencies represent.”
Y-CO FOR YOUNG STARS
During his recent India visit, Dominic Proctor, President, GroupM Global formally launched Y-Co, a youth executive committee aimed at leveraging the talent of GroupM’s younger executives. The agency network has nominated a committee of 14 individuals from across all its agencies and specialist units to Y-Co. All the nominees are star performers in their 20s. They are social actors with skills and capacities to bring about constructive resolutions to their own problems. Y-Co will help GroupM India drive its strategic agenda forward with creative, youthful ideas and initiatives, especially in the digital space. It will complement the Executive Committee (senior leadership team) and work like a mini EXCO. GroupM has launched several innovative initiatives in the talent space in the past. Its training programme Aspire launched many years ago has evolved into a best-in-class product.
‘Giving agencies digital firepower is a big priority’
Dominic Proctor, President of GroupM Global, talks to Srabana Lahiri about his immediate agenda, non-core revenue streams, accountability to clients and more
Q] What would be your priorities in leading the group globally and charting its growth strategy?
The priorities are really the priorities of the individual agencies. A lot of them overlap. We see where they overlap, and that’s where we get involved. Making sure that the agencies have the firepower in digital is quite clearly a big priority. Investing in the right people, the right training programmes, the right technology, the right data stacks, everything you require to run a progressive digital business is our responsibility. Trading is another priority, where we have approximately 30% of the world’s market in media, well 40% in India but 30 % on average around the world. And there is no point in having the biggest market-share unless you can use it. We put in place structures and behaviour systems to make sure that where there is a benefit to clients, the trading community is probably joined up. We have to rename the ‘back office’, which always sounds boring. We have to make sure that we have a very efficient back office. Investments in IT and technology are also a priority for GroupM. So what GroupM does is basically empower the individual agencies to be excellent at client service and client acquisition.
Q] Of late, there have been a lot of consolidations and acquisitions in the media agency domain in India. Are mergers and acquisitions on GroupM’s agenda?
We don’t have a list of companies we would like to buy. We keep an open mind about that. The growth of GroupM’s agencies and GroupM has largely been organic. We haven’t made as many acquisitions as holding company competitors; we haven’t really needed to as much because in India especially we have a very big company already. Where we have a requirement to develop new products and services, we can make acquisitions or joint ventures as we have done. For example, in the mobile area, we have a JV called Madhouse with a Chinese business, because we felt that mobile marketing in India needed to be accelerated. Then there is Mashup, our joint venture in the content production business. So whether it’s a JV or an acquisition, we have an open mind. Generally speaking, GroupM’s agencies and GroupM have grown more organically.
Q] Take dedicated operating units for clients such as Red Fuse Communications for Colgate-Palmolive and Fulcrum for Unilever… How do you rate this sort of collaboration versus independent agencies handling various aspects of a client’s business?
That’s very much the strategy embraced by WPP, where most of our top clients have some sort of horizontal structure which goes across various disciplines. In some cases like Red Fuse, that might be multi-disciplinary. In other cases like Fulcrum, it is more a dedicated unit, but a media unit. Most clients look for further integration with different marketing services providers. It could be for more integration like Red Fuse, where there is one structure with its own P&L and its own management, or a more informal collaboration across different platforms, well that depends on the clients and the client’s end structure. So we certainly don’t have a bespoke structure for all of these global clients. As a service company, we have to be flexible enough to structure teams in a way that best use the client’s end requirements.
Q] What has been your experience? What has been the feedback from clients?
Positive. Like I said clients want to have more and more faith that their marketing services requirements are being integrated properly with each other.
Q] What proportion of your revenue comes from the pureplay media agency model and how much comes from other services that you offer to clients?
We’re under this legislation that I cannot give you statistics until I also give you the source of the stats. Broadly, over a third of our business is what you would call non-core.
Q] With the changes happening in media and marketing in the world today, what does the media agency of the future look like?
The way I see, media agencies would be much broader businesses. They would still fundamentally be based on the optimization of clients, marketing and expenditure… so superb insights leading to brilliant plans transacted by really sharp buying. It might become more computerized. But that’s not going to change; it’s still going to be the bedrock of what we do. The bigger change would be in the other areas of marketing, services that we get involved in and by their very nature they are not predictable.
Q] What is the role of creativity in the media business?
This sounds like a cliché but creativity has never been the providence only of the advertising agencies. This whole business is creative, I mean our analysts and mathematicians are creative people in the way they use, exploit and manage data. It’s frustrating when you hear people describe advertising agencies being creative agencies and media agencies by implication not being creative. That’s absolutely wrong.
Q] You have been one of the youngest ceOs of the time at JWt at age 34. While nurturing the talent pool is crucial in all companies worldwide, do you think leaders are born or made?
I think a lot of times it’s down to circumstances. Some people kind of plan their careers very carefully to reach their landmarks. I’ve never been one of those people. I’ve never had a set plan beyond next month, let alone next year. Leaders can be born, can be trained or can just happen. There is no simple answer to that. A lot of it happens.
Q] You have been in the creative as well as media sides of the business... through this journey; can you recount a defining moment, a wakeup call, a triumph... or anything else that you recall as significant, that has remained with you throughout?
The obvious answer is when we did create the media agency business! That was a fundamental change. I spent many years at JWT in the UK saying that the media independent business would never catch up.
Q] some agencies have adopted the pay for performance model. do you think it works for media agencies to be held accountable to measurable results?
I think we’re nothing if we’re not accountable, whether you stake your whole financial model on that is another thing because in the end, there are so many things happening in the marketing mix, beyond the control of any one type of agency or clients that it is difficult to be totally predictive about the effect any action might have. But we’re very happy that we stake a large or appropriate portion of our income on performance metrics.
Q] how do you get out of the cycle of lower billings coming through, lower commissions and lesser investments?
It’s difficult because all clients are looking to get more and pay less. That’s the nature of business. The way we would handle that would be two-fold. One would be to constantly seek to demonstrate the value that we can add to clients because even strongly procurement-driven clients in the end recognize the value of strategy as well as of execution. So you have to constantly demonstrate that what you are doing with the clients and their money is really adding value to the brand. So that’s on the positive side. On the negative side, you need to have the common sense to turn away those kinds of deals. I mean in the last 10 days we have had approaches from two very significant world Top 30 advertisers, but we’ve chosen not to pitch, because with the remuneration terms being offered, we couldn’t have fulfilled the requirements in the brief.
(With inputs from Saloni Dutta)
