Talented’s latest outdoor campaign for Britannia, that turns the medium into the brand’s message, is in line with the three-year old agency’s penchant for unconventional work. The agency, which has quite a few international awards in its kitty, is looking to set up a ‘Grid of Companies’ “to help growing businesses turn marketing into a strategic, sustainable, sales-aligned, revenue-focused component of the organisation”. In this interview, Gautam Reghunath, co-founder & CEO, talks to Christina Moniz about how Talented is trying to challenge the advertising business model by putting people and profitability over billing. Edited excerpts.
In the last year or so, we’ve seen a slew of mergers and acquisitions in the industry. What kind of impact do these events have on younger agencies like yours?
The big networks have identified that consolidation is the quickest route to a longer future and staying relevant. But as an independent agency observing from the outside, it almost seems like most large networks and ad agencies have started to look homogenous. Over a period of time, clients will also notice that. There is a clear reason why we’re seeing an insurgence of new, independent agencies and a preference for independent firms with clear differentiation. This was not the case 10 years ago. Today, large brands are signing up smaller and younger firms. It’s an opportunity for younger agencies to stand out, and we should actively avoid looking and sounding the same as the legacy agencies. What I really want is for people to associate our agency with the most creative minds in the business. Our talent is our moat, and that is the reputation we want to create. After all, we are competing with agencies that are about 20 times our size.
Unlike most advertising firms, you’ve actively pursued project businesses over clients on retainer. Why is that?
Through most of my career in the industry, a significant chunk of the agency business was always retainer-based. However, dependency on retainers comes at the expense of profitability. Over the last three years, our topline growth has been over 50% year-on-year. We prioritise profitability over billing. We rarely say yes to retainers and choose them carefully. One of our key retainer accounts is Britannia, which has also been our client since day one, taking a bet on a company that was just one-day-old. We have an ongoing relationship with various other brands such as Urban Company, Flipkart, Wakefit, Tanishq, BigBasket and Metro. Only about 25% of our revenue comes from retainer accounts, so the bulk comes from project work. Regardless of the model, our work on all brands has a consistent brand building focus.
To what extent is new tech changing the advertising business today, and how is Talented adapting?
We want to actively embrace technology because it helps us stay as lean as possible. One of the issues I have with the retainer model in our industry is that clients are billed for your time rather than your work. The more time you spend on a client, the more you can bill them. With AI, the time spent on your client is significantly reduced and the quality of everyday tasks also improves. Anything that frees up time should be welcomed because that allows you to think and create magic in advertising.
What was the need for a separate social and influencer marketing agency, that is, The New Thing?
The New Thing was created out of a need to build something in the social and influencer space. Every single person hired in The New Thing, including the founder himself (Viren Noronha, former Swiggy social and content marketing manager) is a content creator. The differentiator for The New Thing is that we have creators creating content for brands. We cannot pretend that the talent needed in the social and influencer space is the same as the talent in advertising. What works on social media needs significantly more flexibility and adaptability. We also have Early, a company led by Meghana Bhat (former COO at Webchutney) that focuses specifically on the go-to market strategy for early-stage brands, which was set up late last year. Across these three companies, we’re around 85 people now and we use a flexible, collaborative model with external consultants and freelancers.
How does Talented retain talent in the dog-eat-dog ad business?
PG (Aditya, Talented co-founder) and I believe it is important that everyone at the agency feels like they are involved in building it together. Nearly 50% of the staff that works with us are also shareholders in the company. That has worked well for us not just in areas like retention but empowering people with a sense of ownership and pride. In the industry, you’ll be hard fought to find good agency-client relationships that last beyond 2-3 years. We feel that the right way to achieve a good agency-client relationship is to first focus on your own staff, get them to feel good about their work and that will naturally flow into the client relationship.