Dentsu Aegis Network (DAN), is striving to become one of the top three agencies in India in the next three years
Dentsu Aegis Network (DAN), is striving to become one of the top three agencies in India in the next three years. The agency has already started scaling up its operation organically and inorganically, acquiring out-of-home agency Milestone earlier this year even as it is focusing on expanding its geographical reach steadily. DAN has already lapped up 30 wins in India in the past eight months to expand its revenues by R1200 crore. Here, the brands include names such as General Motors, Nokia, Microsoft and British Airways, Hubtown and Associated Breweries.
In a conversation with FE Brandwagon’s Anindita Sarkar, Ashish Bhasin, chairman and CEO, South Asia, Dentsu Aegis Network, talks about the business model that has helped DAN gain momentum in India and how the agency is now getting ready—digitally and otherwise — to meet its clients’ demands. Edited excerpts:
DAN recently announced the acquisition of California-based Covario’s search and content marketing agency business. How are you planning to build your digital capabilities in India?
Digital is still relatively small in India – about 5-6% of the total market. However, for Dentsu, the digital slice has been disproportionately large. We have three digital companies in India. iProspect Communicate2 is into search and performance. Here, Covario’s business will fall under the iProspect brand. Iprospect is the largest search and performance company in the world and every acquisition adds to its leadership status. Isobar, meanwhile, is a full service digital company, and we also have Webchutney, which came to us because of our partnership with Dentsu.
We have formed a digital council with the CEOs of our three digital specialist companies. It has around 500 members across 7-8 markets who only work on digital. So out of our 1500 people in India, almost 500 people are only digital specialists.
How are advertisers reacting to the digital space in India?
There are two kinds of advertisers that are currently at play. The first kind isvery savvy and has adopted digital quite aggressively and the other who is still dipping its toes. But nobody is ignoring digital anymore. We have had some very recent successes of new business wins and in each of them, digital has played a very critical part. In the last 8-10 weeks we have won the General Motors businesses, the Microsoft business, the Nokia business, British Airways, Mastercard and Jet Airways. Now, while the wins have been for all-media including digital, digital that has played a very important role in all these wins. Digital is becoming so increasingly important, it is no longer something you experiment with.
What are the key tools you are focusing on to combat growing market competition and consumer demands?
We look at tools from two different perspectives. First are the syndicated tools or researches which are available for anybody to buy. Since our global digital footprint is huge we use that to our advantage and do global deals where we have access to all the worldwide tools, at least in digital. Meanwhile, we also have proprietary tools made available to us, which may have been developed in some other country, but as part of a one company network, we are able to access those too. But since not all are relevant, some tools are customised to serve the Indian market.
Interestingly, India is a very unique market. Here one cannot separate online from offline because the consumer does not behave in that manner. While digital is gaining importance, TV and print are still growing. Consequently, we have developed a consumer connection system, which is the largest people sourced study of consumer insights. The study looks at a particular individual who could stand out as a prospect buyer of a particular brand and then studies his media consumption pattern across platforms. We have added a special capsule on digital this year. Ground 1 (9000 respondents) of the study has already happened and Ground 2 will take place post the festive season. It will have 12,000 in-depth respondents across 21 cities.
What is your take on brands using social media as a new tool to influence consumer sentiments?
Social media is surely becoming a very important part of a brand’s digital strategy. In many ways it is an animal that you cannot control and therefore many brands are grappling with how to use it best. Marketers are typically used to controlling the content of their advertising. But the nature of social media is such that one cannot control much of what is happening over there. Once it in the market, it is out and there may be five million people who are co-creators to that. So while it is a very strong and powerful way of building a brand, it is definitely a double-edged sword. If it goes wrong, it can horribly go wrong. So we are advising our clients to have a very well-crafted and documented social media strategy.
What is Dentsu Aegis Network’s (DAN) current operating model?
Dentsu Aegis Network works on a one profit and loss (P&L) model. So even when a business comes to us for a particular division, specialisation or country, we report it out as one P&L. The advantage that this gives us is that nobody has the vested interest of pushing forward only a particular division or specialisation. For example, if a digital or out-of-home solution is better for a brand, one will not be incentivised to push TV, even if s/he maybe a television specialist.
Now, the one P&L model also gives us the flexibility of liquid talent. Today, clients want to deal with specialists and not generalists. However, they don’t want to deal with 20 different people. So, here, our model allows us to offer specialist companies doing specialist things for the clients but through one P&L. This is the key reason for our success in India, one of the earliest adopters of this model, wherein we have grown from 30-35 people about 5-6 years back to over 1500 people.
How is India different from other South Asian markets?
India has both the highest spenders as well as the lowest spending consumers. Also, we have prospective buyers who are unreachable through mass media. For, even if a client’s ad is running on a given channel, there may not be electricity out there. So the realities of India are quite unique. Hence, it is always hard to compare India to any other market.
At the same time, there are a few similarities too. Quite like the other markets, every client here has now realised that connecting with the consumer can no longer be restricted to a 30-second television commercial and a print ad. So while there is digital, there is also a greater need for rural marketing, direct contact programmes, activations and out-of-home. Clients want solutions wherein all the touchpoints can be brought under one strategy. So it has only made our business more complex.