After buying out Langoor Digital, F1 Studioz and Social Panga, India’s largest digital marketing services firm LS Digital (previously Logicserve) has stepped into the UK market. At the recent IAMAI marketing conclave, founder and CEO Prasad Shejale spoke to Christina Moniz about the growth strategy of the company, which is valued at Rs 1,000 crore post its last round of funding. Edited excerpts:
You have been on an acquisition spree. What’s the hurry?
Digital is not just another channel but an enabler and catalyst, which is why we’ve positioned ourselves as a digital transformation company. Accordingly, we have identified specific capabilities that we want to offer. These are media, UI (user interface) and UX (user experience), creative and communication, data and insights, CX (consumer experience) and tech and innovations. However we realised that while we have expertise in media and data insights, we did not have everything in-house and needed to get the right talent across specific performance areas. That was why, in the last year, we decided to acquire Langoor Digital, a CX company and F1 Studioz, which is a UI/UX company. And this year, we acquired Social Panga, a digital-first creative company. So now, LS Digital is a group company with over 1,500 employees managing around 300-odd accounts.
How big is the opportunity in the UK?
We already had customers in the UK but now that we have beefed up our skills through acquisition, we want to scale up and widen our reach in different markets. To grow our business in the UK, we decided to set up a local office there. We have already seen success in the Middle East region, and plan to replicate that in new markets. As we speak, we are in the process of opening offices in the US as well. The ambition is to learn from India’s success in the IT industry in the early 1990s when the world saw great demand for IT service providers. India could meet that demand at scale and at the right value. Today, globally, there is also a similar demand for digital professionals and that’s where we come in. My plan is to make LS Digital the next TCS in five years, with an employee strength of over a lakh.
How much of your business is currently being driven by global clients?
Around 90% of the F1 Studioz business comes from foreign markets and for Langoor, around 75% comes from foreign markets. However at the group level, our business from international markets is around 10-15%, given our large base but we are growing fast now. In the next couple of years, we expect the non-India business to be 25-30%. Internationally, we work with brands like Lenovo UK, Abbott, Deutsche Telecom, Barclays UK and others. In India, we are pretty strong in the BFSI space with clients such as SBI, HDFC Life, Bajaj Allianz and Acko.
Given your expansion plans, how are you addressing the talent challenge?
The dearth of talent has been a long-existing problem in the industry, and the solution can once again be found in the IT services sector. They picked up people with potential, trained them well and gave them exposure to good projects and opportunities. We have a management trainee programme where we train people for a 45-day period, and some of our best talent has come from here. We invest heavily in systems and tools that can empower our staff to give their best. On the talent retention front, our endeavour is to identify and address employee concerns, offer training and find ways to restructure their roles.
How must ad agencies reinvent themselves in light of the advancement of new technology such as AI?
Disruption forces the industry and companies to change fundamentally. So ad agencies need to continually evolve. Until now, they have thrived with information asymmetry and by offering media inventory to clients at the best rate. However, the need of the hour is for companies to alter their own business models in areas like people, processes, services, delivery and pricing. Those who can do this will not just survive but also flourish. Agencies that cannot transform in the next five years will be redundant.
This is also why we do not position ourselves as an advertising company. It is important to point out that often, growth in the industry is only viewed in terms of the digital media spend. This doesn’t give you the whole picture. If you add spending on data analytics, AI and martech solutions, the growth is massive. Because we offer all these integrated solutions, we expect to grow comfortably by 50-60% year-on-year, higher than the industry average of 35%.