While the slowdown has had an impact, we are fortunate that in India we have not felt the hit like other parts of the world. From an overall economy standpoint, we are seeing a very healthy growth. But another truth is that the advertising industry in India is not going to grow this year. I am not pretending there is no pain. But while you do what is necessary to deal with the short term pain, you should not take your eyes off from the long-term objectives. The issue is what shape you will be in when the growth curve starts rising again. Because when that happens, we have to ensure that our growth graph is higher than that of the industry’s graph.
While the slowdown has had an impact, we are fortunate that in India we have not felt the hit like other parts of the world. From an overall economy standpoint, we are seeing a very healthy growth. But another truth is that the advertising industry in India is not going to grow this year. I am not pretending there is no pain. But while you do what is necessary to deal with the short term pain, you should not take your eyes off from the long-term objectives. The issue is what shape you will be in when the growth curve starts rising again. Because when that happens, we have to ensure that our growth graph is higher than that of the industry’s graph.
Nakul Chopra took over his current role of CEO, Publicis South Asia, in May 2008, wherein he oversees the Publicis network in Pakistan, Bangladesh and Sri Lanka.
Simultaneously, Chopra had also been inducted to the Global Management Board of the Publicis network, where he had been working closely with other colleagues and his global management in setting future directions and policies for the network.
Chopra began his career when he was just 18 and has nearly 30 years’ experience. His career started with the then Hindustan Thompson Associates (now JWT) and has included a stint at Trikaya Grey, where he was an EVP overseeing Mumbai, Bangalore and Ahmedabad. In 1996, he joined the then Ambience Advertising and played a pivotal role in the transformation of that agency from Ambience to Ambience D’Arcy and then Publicis Ambience. In 2003, he took over as President of Publicis in India, overseeing both Publicis India and Publicis Ambience, and then led the Publicis organisation in India as CEO for three years.
In conversation with exchange4media’s Tasneem Limbdiwala, Chopra speaks at length about Publicis’ South Asia portfolio, areas of focus in India and riding out the slowdown.
Q. During the slowdown, many advertisers took extreme steps to brave the recession. When things are back to normal, how do you think these steps would have changed the industry? I don’t think you have seen a dramatic shift as compared to developed markets, if you looked at the large advertisers at least. Prior to the so-called slowdown, India was remarkably resisting any change on this front. I would go far enough to say that whether or not we used digital as part of our marketing mix was determined by our comfort or discomfort with that space, instead of the need of the brand. While India has broken into a celebrity dance since the time we had the elections, and the general sense is that all is well, I don’t quite think so. Indeed, some of the package goods categories saw no shift in numbers in the Indian markets through the first and part of the second quarter.
There are concerns whether the global economy has bottomed out, and so we need to have a ‘wait & watch’ approach. When this is over, and we can see a rapid fall in the developed world or an increased rate of growth in the emerging markets like India or China, it is then that we will get a true measure of how bad it was, or how the situation would be in the near future.
That said, no one knew why there was such a long period of economic prosperity. No one saw the downturn coming. Now everybody has a very firm opinion about how, when/if the upswing will come. But given that no one had much of a clue of most of the things, I guess you can reasonably assume that we still don’t really know what’s next. It could even be sooner than what everyone expects.
Q. So 10 per cent comes from the specialised units, what's the division between the organic growth and new business growth? I could give you that, but it could be misleading. Sometimes I sign an account in October, and list it as an organic growth the next year, but from October to December I hardly got any revenue from it. So, it’s a bit difficult to answer the question off the cuff, but I would imagine it’s about half and half.
Q. Would you like to elaborate more on that? Though no one has the figures telling exactly if the slowdown has impacted Pakistan, but in the period of 2006-2007 and 2008, Pakistan’s advertising industry grew by 82 per cent. Though it is on a small base, it still is a remarkable number. The country has a population base of 135 million with a 30-odd per cent mobile penetration. It’s a market with lots of potential. Publicis was the first agency to be in that market; we were there in 1991. The task has been to access the potential of the market and in what shape and manner we want to be in that market. On this assessment, the market has the medium and long term potential and key network clients like Nestle and L’Oreal viewing the market in making serious investments. So, it makes sense for us to open presence there.
We had one agency called Publicis Pakistan, and another called Wahedna D’Arcy, and we had a stake in both of them. Then we had a third one, which was an affiliation with Red on Nestle. But we have already wound our relation with Wahedna D’Arcy. By the end of the year, we have to consolidate our relationship with one partner.
The third geography is Sri Lanka. As it is the smaller market, we have taken an existing agency, Solutions Leo Burnett, where the group owns a stake, and have started Solution Publicis with the same management. In Bangladesh, we already had an affiliate both from the size and growth potential perspective. We are not looking at acquiring stakes in the region right now.
From that perspective, my focus has been to increase presence in Pakistan and Sri Lanka.
Q. From your talks, it does not seem that slowdown has been a concern… … Oh, it has! But I am glad you said that because I don’t think the slowdown should take away the motivation or become a complete dampener to our strategic thinking. While the slowdown has had an impact, we are fortunate that in India we have not felt the hit like other parts of the world. From an overall economy standpoint, we are seeing a very healthy growth. But another truth is that the advertising industry in India is not going to grow this year. I am not pretending there is no pain. But while you do what is necessary to deal with the short term pain, you should not take your eyes off from the long-term objectives. The issue is what shape you will be in when the growth curve starts rising again. Because when that happens, we have to ensure that our growth graph is higher than that of the industry’s graph.
Q. And what are you doing to ensure that? We set growth objectives as an organisation in three parts. We have a history of growing with our clients - so organic growth is the first strategy. The second part is to grow through acquisition of new accounts. And yes, we have targets for each one of our units, which are managed by very senior professionals, who are also given the independence to conduct their businesses in a manner in which they think they would achieve these targets. Our third step is growth through acquiring specialised skills. For instance, we set up Red Lion. This unit is a fast growing business for us. Then we started the full-fledged operations of Publicis Modem and Dialog in 2008. These two units accounted for around 10 per cent of our overall revenue.
Q. It's been a year since you have been given the South Asia portfolio for Publicis from just the India role. How has the experience been? There are three aspects of being the CEO for South Asia, and the most important aspect is still India. To that extent, my day job has not changed dramatically. To be fair to the Publicis system, even before I was appointed CEO for South Asia, I had an active role in the Asia strategy. But now, it is more formulated, where there is a regional office in Singapore, and we have Matthew Godfrey, Calvin Soh and me in South Asia. This, together with regional functions such as CFO and HR, are really think-tanks. So, it’s not just pure involvement with management through geographical location, but also operating for the whole of Asia as a region. The third aspect of the role is addressing the three geographies, where I think Pakistan is the largest opportunity after India. And then there is Sri Lanka and Bangladesh.
Q. Speaking more on India, would like to take us through some of the areas of focus? The vision is to be a company that creates contagious ideas that change the conversation, and we focus a lot on this company philosophy to begin with. Another thing that we are focussing on is that as the markets get more competitive, the creative benchmark has to change and one has to be noticed and be visibly successful. These are the critical steps that you can build success on. In fact, creativity is a global focus right now.
In India, we ranked third at GoaFest and at Cannes Lion 2009. We are also No. 3 in all Publicis Worldwide markets internally. This is not by chance; this is something that we have planned. We set a tough target, got the right talent, and gave our resources the right space to work in.
The third leg of our strategy of the future is digital. The India numbers may be lower when compared to the Western markets, but the numbers suggest that digital will grow much faster than anticipated in India. Hence, for us, Modem is doing well and is the future growth avenue.
When you put these three things together, one imperative that emerges is that the future is not going to be about how good I am doing in the various mediums, but how we can generate ideas that can influence the conversations that people are having with each other, in favour of the brands that we work for. In the past, word of mouth (WOM) has always been an influencer, but now it has been empowered by word-of-hand, that is, the cellphones, the laptops and the Internet. This requires us to have a genuine media neutral offering.
