MEDIA FUNCTION UNDERGOES CHANGES

CHECK, MATE.

The media function in advertising agencies witnesses increasing consolidation and very safe careers suddenly face unexpected challenges.

"There is fear and apprehension of leaving a place where my equity is high and unquestioned; there is fear of the unknown on my next move…"
Jasmin Sohrabji, president, MediaCom, South Asia, - frontrunner in media research, on leaving MediaCom, the media company of Grey Global after 16 years.

Sohrabjee leaves the place she grew to recognize as home over the years she spent growing into one of the best-recognized media professionals in the country. She however faces a crossroad today as Grey Global was bought over by the WPP. MediaCom, by the sleight of fate now comes under a new management and will operate under WPP's Group M. If Sohrabjee stayed she would have been suddenly propelled into an environment that was entirely new with no one really to blame. She instead has chosen to opt out and discover the world outside that she until now didn't consider an option.

Consolidation in the world of media companies first happened in `88 when WPP brought the media business of JWT and O&M to form Mindshare. Back then Ketaki Gupte and Kalpana Rao, the two respective media heads had found themselves at bay when a junior was named the head of the new entity.

However the process has gathered momentum in the past one year when WPP almost bought out Rediffusion’s Mediaedge CIA. It was aligned under Group M and Divya Gupta, head for years now, faced the same dilemma. Two months back Universal McCann and Lodestar, the FCB Ulka agency merged to form Lodestar Universal. Fortunately perhaps, Universal was headless. And Shashi Sinha, Lodestar chief got the big job.

Even if some seem to lose out this consolidation process has become a necessity. Here's why. In the `90s the trend shot off as the consolidated entity had larger volume of business to negotiate with the media companies and could get negotiate better rates. Today, while the advertising industry is growing by more than 12 per cent annually, the advent of many new companies has led to competitive pressures for existing advertisers. Parallel runs the proliferation of media options and therefore a fragmentation of audiences. For instance more than 250 channels alone force advertisers to take calibrated decisions on their media plans.

All this makes the media function critical. And agencies have to measure up. On the one hand, there is a tremendous need to get more and better databases to keep up with changes happening in the country. Agencies need the software and tools which will run these databases and help to arrive at better media decisions. Then there's the growing need for quality people with the ability to analyze all the data and have the experience and good judgment to make evolved decisions. Both these requirements require critical investments.

Further there is a lot of experimentation required with emerging media like digital entertainment, mobile, retail. But they have to yet become self-supporting. "Unfortunately all this has to be funded by media agencies, operating at a revenue stream which for historical reasons, normally is between 2.5 to 3.5 per cent of advertising spends”, explains Sinha. Obviously there is a mismatch between revenues and required investments which can be sorted out with consolidation.
So while many may be losing their positions of strength, for others there have been opportunities. And when one window shuts, a door opens elsewhere for the much sought after media professional. For instance Divya Gupta moved to the ADA Group. And Sohrabjee who has several offers and options popping up says, "In all this there is a growing sense of optimism that there exists a world of opportunities waiting to be explored and exploited."
Consolidation and its effects are not new to the corporate world. But as M. Parameswaran, executive director, FCB Ulka says, "Organizations have to manage egos and mindsets when there is going to be a reshuffle." And the media and advertising industries have not recognized this need enough.

COMMENT:

SHASHI SINHA, CEO, Lodestar Universal

WHAT THE MERGER BROUGHT HOME

The recent merger of Lodestar with Universal -both part of the IPG group- to form Lodestar Universal was a part of the consolidation process that is running through the media function in India today. Both were fine agencies doing well in India. Universal had a host of MNC clients like Microsoft, Intel, Johnson and Johnson to name a few. Lodestar had a slew of Indian clients like the Tata group, Amul, Mahindra and Mahindra amongst others. Now all this business belongs jointly to the new entity.

Besides this, in my mind the biggest gain has been access to each other’s talent. This is critical in an industry plagued by shortage of good people. We have had quality leadership and talent now available across all offices. Universal had historically a strong presence in Delhi and the combined entity has access to better quality talent which was not the case previously. This gain is true for Bangalore too where the agency played a strong role. Conversely Lodestar was very big in Mumbai and will provide tremendous stability to Universal clients too.
Next is our ability to ramp up our digital, entertainment mobile and retail offering. With a larger base in both business and talent, our confidence to make each of these business divisions successful goes up tremendously.
Last, though definitely not the least, Lodestar had a Labcentre which was doing cutting edge work in terms of tool development and analytics especially on Indian databases. Not only will Labcentre be available for all clients in India but also will be a resource internationally for both Universal and FCB global clients. Currently while the individual agencies did get international assignments they were a small contribution to the overall revenue. With the merger, we expect a dramatic increase in international assignments in the analytics area. I am certain that the day is not far off when Labcentre should contribute to more than 25 per cent to our revenues
In sum, in our experience consolidation will only improve our offering, which will benefit our clients. When they see further success they will, in turn, reward us more. As the table for better quality media services goes up, so does the reward and recognition. I think from this it is only natural that the whole industry will benefit.


Sohrabjee introduced the concept of light TV viewing to the Indian media industry. Her research on multi-set TV homes won three awards at the Emvies last year, including the Grand Emvie. She speaks to Billboard in an exclusive interview as she prepares to quit MediaCom that is now being aligned under Group M of the WPP Group, its new owner.

On why she is leaving Grey Global.

I joined Trikaya Grey 16 years ago, grew up in Grey and then helped build MediaCom. However, going forward there will be a change in management, and given that there will no longer be any emotional bond holding me to this place, this is the best time to evaluate all my options before I decide what next, and why.
On being seeing as a victim of the process
Only if my career takes a nosedive downwards from here on! Consolidation has forced me to re-think my options, but not my decision

On what makes a person stay on.

The realization that the people you enjoy working with, the person you admired working for and the culture you believe made you the person you are make you stay. When these things no longer exist, you then look at your work place no differently than any other options out there.

On how the process of consolidation is evolving.

It’s already evolved to a large extent. There are benefits and disadvantages to both clients and our people. Clients benefit from volume power and economies of scale when agencies are part of a larger network and costs of research, training, etc are shared. However, advertisers are well aware of their choice constantly being limited to a few large networks. From the people perspective, it’s the same. While there is more infrastructure and training investments, after a while the options to move within are limiting

On the future.

When I decided to leave, I thought I had two options-another agency or a broadcaster. One plays on my core skills, the other is a natural transition for many in my line. However, I have been introduced to many more options recently in related and unrelated sectors that heavily depend on the skill and experience I have, so now I am doing what I did very little of before…listening!

(This article appeared as the lead in Billboard, the weekly advertising and marketing page in Hindustan Times in Sept `06)