Mark Patterson, CEO, GroupM - APAC

I would say the biggest challenge for GroupM in India at the moment is talent motivation, because all agencies are under pressure in retaining talent and this is one challenge even we have in India at the moment, and motivating and providing incentives to them. I believe the management challenge is about motivating people who work very hard, when you’ve got very limited goodies to give a handout because financially things have been tight.

A graduate in commerce from Birmingham University, Mark Patterson began his media career in London as marketing and then sales executive with a leading billboard contractor (now Clear Channel). He has worked with Ogilvy & Mather London, Mindshare Japan, and finally GroupM.

In 2005, Patterson was appointed as CEO of GroupM - North Asia, and then elevated to COO, GroupM - APAC in 2007. In June 2007, he took over the role of CEO, Group M –APAC, with responsibility for all WPP’s media assets in the region.

His clients over the years include Ford, Compaq, Daimler Chrysler and Microsoft, among many others.

In this interview with Noor Fathima Warsia, Patterson speaks at length about GroupM’s journey in India, growth strategy for 2010, retaining and training talent and more.

Q. Lodestar Universal, Lintas Media Group and now Starcom are trying to create talent that would be relevant to media services, but despite being the leader we have not seen similar initiatives by GroupM?

Do they have full-time professional training leadership? We have four fulltime regional training directors, two based in Hong Kong, one in Singapore and one in Australia. We have a whole network of training leaders. In India, we have the regional team’s involvement. I cannot remember any organisation in India with better training capability.

Q. Since India has a very strong traditional market in terms of media and it appears so that GroupM is very strong in traditional media. But when it comes to digital, it would not appear that you are the kind of leader that a lot of other specialists are? Does this pose as any kind of concern?

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Well, 30 per cent of our revenue from India comes from non-traditional media, a third of it comes from digital media. It’s our biggest mobile revenue market, for instance, in that region, it is the fastest growing SEM market. Our business in India is a more diversified revenue stream both from traditional and non-traditional media than anywhere else in the region. There is more demand for digital talent than in any other stream, which has been growing over the last two or three years.

Q. Everytime there is a new player, that new player will eat into the share of the leader. How do you view this? Is it alright for that much business to go away, or do you already have some backup plan or strategy to see that it doesn’t happen?

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We don’t like losing any business, but don’t mind losing unprofitable business. There have been times when we’ve had to part with certain clients because it was just not making money or we disagreed. But we have been rigorous with many clients, for instance, Nokia. In that case, from a global point of view we weren’t prepared to engage in a certain level of remuneration that they wanted. So we made an offer and they wanted to improve, but we weren’t able to improve it because we were losing money. We couldn’t agree on the terms and conditions.

Compared to any other network, we are quite strong with clients on the types of guarantee we make in remuneration terms, and if we think it’s fair, then we would make it better. So, we don’t like losing business, specifically not in the India and the APAC region markets, and we have four and five agencies that have the potential. We are also under attack not only for the business but for our people as well. There are a set of people joining other networks. There are two prominent back-ups – one is obviously in retaining and winning businesses, and the other is retaining and awarding talent.

In India, we have significant market share and we do have the potential to grow our market share, though we have to diversify our revenue stream and capabilities significantly. However, we believe that we have potential growth in India with double digit growth in 2010. I won’t get into specific growth targets for each of the individual brands, but we have a very clear strategy for each brand.

Q. What are your ad rate expectations for India?

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In India, we plan to have 6-7 per cent growth in ad spends for the next year. Indonesia and Vietnam have better ad spends than India in the APAC region as they, too, are growing and are maturing as markets, however, they are below double digits. The growth markets would be India, China, Indonesia, Vietnam, Pakistan, and Malaysia.

Q. What are the other areas where you partner with Madison?

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Well, only in Mediacom and in that regards the relationship is based around Mediacom, however, it is relatively early days in the relationship that is long term. It always takes time, but it’s been a pretty seamless transition and we have a lot many businesses and a lot many key people, and it helps us to get to know each other’s businesses. Thus, the JV is on between us and we are very happy with the way things are moving.

I am very happy with India. At the Asia Pacific level, one of the things that Vikram (Sakhuja) has done is introducing Choreos, which has worked superbly. At the regional level, we created a strong vision about the future. Over a year ago, we created a strong vision for GroupM and a way of articulating how we should work and the cultural values that we should have at the Asia-Pacific level. We have internal competitions and we have five specific values that we have created. One of the things that values do is to bring people together to form a community, and India has been our best example on this.

Q. Unilever has called for a global pitch, and so have clients like Hyundai, etc. Why do you think some of the major clients, post the Nokia pitch are suddenly seeing back to back global media pitches?

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I guess it’s just coincidence. It just seems to happen that way, but they are for different reasons. Thus one can’t pull out a trend particularly with the reason of recession or people taking the opportunity to get the best media values. That’s not case. Whenever a client calls for a pitch, they pegged more media value, downturn or no downturn. So, they are about different reasons like contractive cycles or changes in leadership or other factors. We don’t see this as a trend.

Q. Doesn’t it worry you when Vodafone goes and says ‘there’s a long transition period for you’?

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No, it doesn’t. Because I know day-to-day we are doing great work. We have a happy client.

Q. Among the top markets in the APAC region, where does India fall in terms of revenue and profit growth?

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In revenue and profit, India is No 2. China leads in both, after India it is Australia.

Q. When we look at revenues in India and China, they are also six times different from each other...

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China is about double. We are big in India, the way we are big in China. In market share, India leads in terms of breath and revenue stream, in terms of revenue from non-traditional sources, it leads in most consistent innovation and creativity. It is now leading in HR management, so it never fails to amaze me how it keeps on pushing to new stuff. I want to expose more of our people on the ground in India for the next three years. Even if I put three months versus that in China, they will come out richer intellectually and capability wise.

Q. But there are different routes of growth for each of these brands...

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Again, if I start talking about the way individual strategy works, I don’t want to put it up in the general public knowledge. But what we definitely do is portfolio manage the agencies to ensure clear opportunity of growth and ensure there is no competition. For example, it is not necessary for one agency to focus on diversifying revenue streams between the clients, while the other agencies focus on growth, though local Indian clients and the growth strategy of the other agency would be directly attacking the client base of another agency outside the group. Moreover, Vikram (Sakhuja) and his team are clear about the objective strategies.

Q. How has the technical shift of MediaCom to Madison impacted GroupM overall in the last couple of years?

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It was a strategic decision that was made in the interest of our long term future in India, we were very happy to have worked that deal through. We felt it was a win-win where you have all the parties concerned, obviously we shared the interest of a significant client in P&G and we were able to create a partnership with a very strong player in India that we brought close to the group and now we have an active ongoing partnership and we are very happy with it.

Q. So, the hierarchy is still GroupM and then the rest of them?

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Vikram Sakhuja runs South Asia, thus the buck stops with him and he has to deliver to me for the entire GroupM PNL and the markets.

Q. Also, we don’t hear of mainline agencies like GroupM being part of digital pitches...

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Digital pitches or media have competitive sets that are far broader depending on the bridge, because then you can have ad agencies that have agencies with digital capabilities. However, some of the big international media agencies are trying to build their base in India.

Q. What are some of the challenges that you see for GroupM in India?

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I would say the biggest challenge at the moment is talent motivation, because all agencies are under pressure in retaining talent and this is one challenge even we have in India at the moment, and motivating and providing incentives to them. I believe the management challenge is about motivating people who work very hard, when you’ve got very limited goodies to give a handout because financially things have been tight.

Q. But these are internal training, what about people outside the system?

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There is an industry wide issue there. It is no doubt difficult to attract talent from the top business schools to media, but we can do better no doubt. Ultimately, what we have chosen to do is work with the talent that we can get, training them internally and making them better. The other thing that we have been able to do is provide opportunity for a lot of talent to move out of India to experience other markets and come back. What I am trying to do now is we are looking at a programme to putting people into India. I see India helping the rest of the regions help build its talent base and that’s we will do next year.

Q. So, why do we have Motivator only in India?

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Basically because of more scale in India than in any other market, and more success you can argue, therefore, we needed a fifth agency to manage five clients. We wanted an agency that is quite local and is both aggressive and something different in the market. It has been developed in India because of our scale and our market share and the need to manage conflict, but also because in India we thought there was an opportunity to have a different offering in the market. Thirdly, Motivator has a very different style and culture than the other agencies.

Q. In regards to businesses like Vodafone or Nokia, why is it that we have GroupM saying that it stays with us while there is OMD and Aegis saying it is definitely moving, and we have the clients who are not saying nothing at all. Why it is that the client is always not clear in what they want to communicate to the media?

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No client would ever say about their relationship with an agency that’s going to be down two or three years. Things can’t change. Clearly, in this situation, we run the business, we have been running it for several years; the clients in India are very happy with the business, otherwise why would they be staying with us? For the kind of business they look in India and with the service that we are providing, I am sure they will stay. While in the case of OMD and Aegis, both are weak in India, so clearly they have an ambition to try and attack and take it, though they will have to do some serious bit of convincing to those clients about their capabilities.

Q. In India, the competition has increased. There have been new brands that have grown like MediaVest Worldwide and Vizeum; OMD, too, has grown in the last two years. Do you see place for new media brands in India?

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OMD has launched their second agency, PHD, while Aegis has launched Vizeum for the same reason that we have four agencies within GroupM, because they want to get a greater market share and manage conflict, thus they had to launch their secondary brands, but the fact is that they have done it 10 years after Maxus was launched. We launched Mindshare in 1997 and Maxus in 1998. We have four mature brands that we manage. Most of the other networks have one across another one and they are still trying to build their own network, for instance, Carat is building the Carat network as they still have a huge gap in the APAC region. At the same time, they are trying to build a secondary network and attract businesses in the same category within the group.

As for India, we have five brands in India, which includes Motivator. As for Mediacom, we legally don’t count it a as part of us, but in attitude, yes, we count Mediacom as a part of GroupM. We still have a very close relationship with Mediacom in India. We run a global Mediacom network and India is an important market.