In today’s world, the essence of marketing is seemingly a different ‘ball game’ than what it used to be. Nowadays, marketing, for brands, has become all about developing better business-consumer relationships, while focusing on campaigns which are personalised based on customer expectations. Ever since marketing technology (martech) entered the picture, businesses have seen a shift in their ability to reach and engage customers. According to LXA Hub, a marketing platform, and The CMO, a marketing website, companies utilising martech report a 30% increase in marketing efficiency and a 25% boost in customer engagement rates. Additionally, with projections from Grand View Research, a market research and consulting company, the global martech market is expected to grow from $344.8 billion in 2021 to $807.9 billion by 2026. One such player in that landscape is WPP run EssenceMediacom, which happened after a merger between agencies, Essence and MediaCom. In a conversation with BrandWagon Online, Navin Khemka, CEO, EssenceMediacom, talks about how the merger has worked out and the importance of martech stacks. (Edited Excerpts)
In terms of Essence and MediaCom, how has the functioning evolved post the merger? How have two agencies benefited from it?
This merger has been beneficial both globally and in India. If you look at the entire genesis of this merger, it all comes down to the fact that MediaCom, which has some key clients across markets, has been merged with Essence, which is a Google-based agency. I believe Google sets the benchmark for the Indian digital landscape in today’s time. Before the decision was made, we observed how mergers are happening within the entire scale of digitalisation, which is when we decided to merge these two brands. The reason behind this merger has been to be able to manage the scale of digitisation, along with handling the future of digitisation of media, which is already underway.
As the process to deprecate third-party cookies has already started within EssenceMediacom, what strategies have been built or deployed to handle the needs of clients?
As far as first-party data is concerned, different clients are in varied stages of this journey. Talking about the first-party data maturity curve, some clients have data but don’t know what to do with it, while other clients want to get into this journey because of the removal of third-party cookies. Another set of clients seek our help to get into this journey for the next three to five years. This will allow them to get data for understanding consumers better and make better campaigns. However, some clients don’t want to be a part of this journey because of being at a basic stage. We have a full-fledged data team for helping clients, depending on which part of the maturity curve they are, and what their ambitions are in the short-term, which is for two to three years. It’s a journey which will take time, depending on how the data industry evolves. This will also depend on how laws, such as the General Data Protection Regulation (GDPR) and the Digital Personal Data Protection (DPDP) Act, come into play. Since every country is adopting its own methods of dealing with first-party data, we also have to constantly learn, experiment, and scale up. We have a team of specialists doing this job for us, as there are a lot of legalities involved.
With all the buzz around artificial intelligence (AI), and with companies such as Google and Meta using generative AI, how do you see AI playing a role in the agency business?
AI has the potential to play different roles, with regard to different areas of an industry such as operations, creativity, media planning, among others. Technology can enhance people’s ability to do better jobs, from an operational perspective. From an operational point of view, if an agency’s work starts getting done by AI then a high level of bandwidth can get freed up, which can help the agency focus on other areas such as strategy and consumer understanding. With credit requirements changing, based on organisational requirements, AI-based guardrails can undertake the work of an agency. If you look at it from a strategic media planning point of view, there’s a mass amount of data available in the market. I think AI has a role in bettering one’s products and marketing efforts, depending on the kind of brand.
There used to be a time when planning and creativity used to be separate fields. Now, with the martech stack coming into the picture, lines have blurred. On that note, how well prepared are you to develop those stacks or would you like to go for acquisitions in the future?
I think agencies are scaling up, in terms of the skills that they are offering in the market. Earlier, agencies would offer two or three services such as media planning, account planning, and creativity. Today, we have evolved, as we have different teams such as a data team, a content team, a partnership team, a creation team, and a media planning team, among others, with plans to add more skill sets. The way agencies can find and articulate solutions in front of clients is better. In that scenario, we have been successful. For example, in terms of the Open X model for TCC, we were able to put creative media content data together, which has increased their growth.
There was a fear of agencies working on ‘thin margins’. With the current evolution, has that fear gone away?
I think margins act as a way for one to get paid. Clients expect good talent from the agencies, in terms of someone experienced who knows the business. Therefore, the cost of talent is not cheap. If one has to retain talent then remuneration, that is received from their clients, is a need to sustain that talent level. I understand the base business could take place at a competitive price but anything which is base business plus, apart from media planning and buying, as it has needs for data, content, technology, and even AI shouldn’t happen at a cut price because then one loses the incentive to offer solutions. The way our remuneration is structured, a major part of it is based on performance. I encourage that methodology with the majority of our clients, for them to give us a base fee which helps the team sustain itself. There’s also an incentive based on performance linked to sales and some of the key performance indicators (KPIs) that we meet.
What is the biggest challenge in all of this evolution?
The biggest challenge is that in the next two to three years, we will be on the cusp of change, which does not make it easy to manage this thing. Agencies get subjected to pressure, on account of everybody’s expectations. A client remains under the impression that an agency has exposure across varied categories, with regards to different brands. So, agencies need to learn faster, which puts in a lot of pressure. Hopefully, by 2025-26, there’ll be a very different composition to our agency. I would like to work with a client for the long term. The majority of our clients have been with us for as long as five-15 years which helps us gather a repository of data and know the clients better internally.