Pratap Bose, COO, Mudra Group

For the industry, I would say that all of us in the advertising, marketing and communication business, we need to be aware that there is a meltdown. But I don’t think we need to be too worried about it. I personally believe that things would look up around Diwali. Having said that, you need to be aware of the economic conditions around you and cut your cloth according to the suit you want to wear. The agencies that are able to move on smartly around it would do better than the traditional agencies.

Pratap Bose, one of the most respected figures in Indian advertising, took on the responsibilities as Chief Operating Officer of the Mudra Group starting July 2008. He also serves on the Mudra Group’s Executive Board. Bose joined Mudra from O&M India where he was their youngest ever CEO. Prior to the CEOship, Bose was President, Ogilvy Activation and Managing Director, Kinetic (South Asia). He joined Ogilvy in 1993 and set up Ogilvy Landscapes. He then went on to head Activation.

At Mudra, Bose focuses both on Mudra’s media and marketing services offerings. He also leads the Group’s foray (including acquisitions and alliances) into rural marketing, public relations, events, sports and retail marketing.

In a freewheeling conversation with exchange4media’s Tasneem Limbdiwala, Bose talks at length about Mudra’s new units, surviving the slowdown and the road ahead in 2009.

Q. Are you treating all of these units as separate P&Ls?

Yes, all the units are separate SBUs. But the more critical job is really about integrating them and getting them to work as one. So, we have advertising, specialised units and media. First of all, we need to get all the specialised units to work together; secondly, to interweave them with media and then backend with advertising.

Q. But so many people have tried to do that and it just does not work out right because the clients have their own sets of advisors. So, is there a problem as such?

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It’s not in the clients’ domain, they have no problem. The clients want a face. So, typically what happens in the agency is that X or Y has the client relationship. That’s how it works in reality on the ground. So, if I am handling ‘Union Bank’, the client generally wants to lead with someone very senior. It is for the agency to back integrate and deliver 360-degree offering. The problem is not with the client, but on the agency end.

Q. Have you achieved the growth targets that Mudra had set? If you can’t share the numbers, at least let us know the percentage growth.

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We are hitting top-line growth. As I said before, it’s a consolidation mode for all of us. We are looking at a growth of 30-plus per cent. The big five agencies, according to me, are growing between 25 per cent and 30 per cent. In view of the downturn, everybody is taking a really cautious approach. When these digits would pick up, you never know. But we need to be aware of the meltdown.

Q. You may have been pioneers in some of the units like VideoTec, but they really have been left far behind in the race now...

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I am attempting to revive VideoTec. It certainly has got great brand equity. In terms of content, to be honest, I have not paid much attention to it. But it is certainly on the agenda and don’t want to throw that away because it is a valuable property to have. But you need to have the people to drive it. One may have all the good intent, but if you do not have right people to deliver it, you fail.

Q. There are so many things that have been launched and need that much focus and emphasis in the next year. How will these new units or launches be affected?

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Those will grow because they are new, so the downturn or upturn will not affect them because it’s not about next year. It’s about leading 3-5 years ahead. From a business point of view, if you are expecting 30 per cent growth, my intention would still be at 30 per cent. We need to be innovative. My belief is that the small and medium clients would cut on large outlays of expenditure and advertising for brand campaigns, but put their monies into smaller pockets of these specialised units. So collectively, I may still end up at 30 per cent top-line. The shift from advertising to specialised unit might not change, but I may still deliver the numbers.

Q. What are the areas of concerns or things to watch out for the industry, Mudra and your personal work targets in the year 2009?

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For the industry, I would say that all of us in the advertising, marketing and communication business, we need to be aware that there is a meltdown. But I don’t think we need to be too worried about it. I personally believe that things would look up around Diwali. I am certain about a recovery in the stock markets. Though the stock market is not related to us, but today it is the issue of cash. Having said that, you need to be aware of the economic conditions around you and cut your cloth according to the suit you want to wear. The agencies that are able to move on smartly around it would do better than the traditional agencies.

From the clients, there are one set of clients that are quite insulated, like the FMCGs and telecommunications firms, who will go on and spend money. But sectors like insurance, travel and finance will be affected. There will be a small wind-up. So, we all need to be aware of the situation, but still need to wear the optimistic hat.

Saying this, that does not change the Mudra perspective as the agency also understands that we are a part of the same sailing ship and I think the edge we have is because we have got the specialised units and media in-house, which would hold us in good stead and solidify our position even more in the next year.

And personally, I am loving it! It’s not something that life changes now and next year. I have always balanced my work and personal life. I don’t work on weekends and take my proper leaves in the month. So, as long as the mind is fresh and clear in what we want to, put your days and months in your checklist and keep going.

Q. How has the going been for Mudra Max, which was OMS at that time, after being integrated back in the agency to give it the full-service model again?

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It has been doing well. Mudra Max is the holding company. It has Radar dedicated to the businesses of ADAG and then we have Connext for non-ADAG businesses. I have done analysis of all the media companies and one will be surprised to know that in actual revenue/profit terms – barring GroupM, which is the dominant player, and then there is Madison – but after that most of the rest are more or less equal. So the top 10, clearly dominate the media space in India. We clearly want to challenge Madison for the second spot. I am not worried about GroupM. It has got its own agenda. We know where we are and obviously we want to be at the top, but being a global company being aligned to WPP and with the O&M, JWT and Contract businesses on the platter, that’s difficult to beat in terms of scale. But in terms of being best in class, that is something I am focussing on. I want to be at the Emvies, want to win at the Media Awards and want to bring the creative thinking into media.

Q. Any change in strategy till then?

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Nothing at Mudra. But I have heard about other agencies (without naming anyone) with huge drastic cuts. A big network agency have been heard saying that there shall be cuts in the salaries next year and not to expect any bonuses, which is bound to happen because if you are a global company who are affected due to the slowdown, it is very much understandable if the other networks also getting affected.

But at Mudra, we don’t have those pressures. So, coming back again to one of the reasons of me joining Mudra, this is one of them. I could have never launched five units in such a short while where I had been before. So, that’s the advantage with Mudra, which has is independent and supports the entrepreneurship attitude. I don’t have to worry about headcounts because as long as the people are getting business, I have no problems.

Q. You would rarely see a client who would go after all the units. It often ends up with different clients with the different verticals?

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That tends to happen because of the core expertise. For instance, Tribal DDB is extremely impressive. They work with the who’s who in India because it’s a much specialised skill. It is because of the specialisation that clients come to those units. That can never be disputed or changed.

It is not necessary that all the units work together because a client may not need digital, rural or trade marketing, but if your approach is that way, you may tend to have three units out of the 12 units working with the client. But one needs to think in a 360-degree way in the first place. So, often the integration process in most agencies is the biggest issue. Each unit works on their own and are chasing their own bottomlines and revenue. So, for instance, how do you integrate for McDowell on trade marketing, sports, rural, OOH or digital? The client does not want seven heads coming in for the different units. Generally where the strongest relationship exists, that could be from anywhere, that person should have the ability to think 360 degrees, have a certain basic knowledge on what these units do and can deliver, so he or she can be confident in adding value to the client. In this way you have the business integrated with your other units.

Q. How have the last five months been since you came on board Mudra?

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It has been like a rollercoaster ride. We have undertaken several activities in the last two months, not just from the point of launching new units, but much more. We have launched four specialised units – Celsius, Water, Terra and 10 Integrated. We have also hived off and restructured ‘Kidstuff’ completely and will largely concentrate on its core expertise, which is promotions, in particular, school contact programmes and all that. Kidstuff was the company set up by Pankaj Wadhwa to make kids’ toys, that’s how the name stuck. Later, he sold it out to Mudra. But because of the great brand equity that Kidstuff has in the market in that domain, we thought not tamper with the name. But then we had to specifically also distinguished its functions between what they clearly do on the ground and not profess to do on terms of their expertise. That is why we created Celsius and kept promotions out of ‘Kidstuff’.

We also set up Water, which is in the brand identity and brand consultancy space. It started with a bang with Union Bank. So, that has given a lot of fillip to it. Firstly, because of the decent revenue and large spend. Secondly, with Ashish Mishra, who is heading it, we have a bunch of good people in the team.

So, all together we have advertising, which includes Mudra and DDB; then we have specialist Mudra communications divisions such as Primesite, Kidstuff, Multiplier, Health & Lifestyle. Within Primesite, there are four distinctive functions. Adding to this, the Group has plans to launch a retail unit, and a business analytics and consulting unit before March 2009. Both the units are on line and we are looking for JVs and acquisitions. Retail, according to me, is a large spectrum. Clearly, from planning guys to category specialisation, getting into FMCG and fashion, they are completely distinct. If I am handling Louis Vuitton or another upmarket brand, say, called Mont Blanc, those brands will receive a completely different treatment from a P&G, a Unilever or a Marico in the retail space. So, you can spend a lifetime distinguishing between luxury brands, then there is design, brand identity, shore design, modern or traditional trade, material specifications, logistics, implementations. It is a huge area and needs to be more than a one-stop shop in a country like India.

Q. Is there is a lot of thought process going into it?

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Yes, there is a lot of thought process going into the wide canvas and we are going into probably three areas. One is the whole logistics and operations part of it as we need a lot of investment to be able do 500 stores across India. That already exists, to be honest, within the agency within the prime group in terms of design of retails. So, we want to strengthen that. We are looking at a JV or an acquisition in the area of design that understands brands, and looks at the environmental designs. The environment could be a mall, a retail space, an airport, a city or a sports area. That’s a much specialised skill and that does not exist in India. So, this is what we are looking at.

Q. Are all the teams well versed with all these units or is there a specific team that knows overall about all the units who then deal with the clients?

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Generally, the heads of the offices are the evangelist, keeping a track of everything. But that’s not the issue. The issue is how you would integrate all of these units into the core of advertising and media. So, if we want to be best in class across our offerings, it would be a huge benefit for our media agency. We have been in a few pitches, and it does seem to work. At the end of the day, media is a commodity, it can be bought; the only difference is the rates, volume and the relationship with media owner. But the main thing is the incremental value that you bring for a product.

Q. How has the change been for you personally? You have worked with Ogilvy, which is true creative, and then suddenly you have to look at all the other various units apart from creative in your current mandate?

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That’s one of the reasons why I have joined here. I think if you look at these units, it is certainly thrice the scale of Ogilvy. And comparatively, the number of people working at Mudra is 600. So, in the next couple of years in the terms of marketing service, I don’t thing we will be challenged. It may be a pompous attitude, but my gut feeling is that once these units take off, in terms of marketing services, we will be the undisputed No. 1 in the areas of spread, scale, size, expertise. Therefore, advertising and media need to latch on to that, which is my job. You may not win big accounts, but we will always pick up Rs 20-30 crore accounts constantly for creative businesses. Within the new units, we will be picking up the Rs 5-6 crore accounts. So, when you add them all, it becomes quite sizeable.

Q. When are you planning to take a final call?

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It’s a slowdown we are talking about. Few partners are overseas right now. And we are seeing who is the best partner to align with. We are serious about it, but suddenly with this slowdown and all, everybody has taken a step back, especially in Europe and the US.

Q. How is the slowdown impacting Mudra? Looks like you are at advantage of sorts as you are not affiliated with the UK-US companies?

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In that sense, we are distant from the slowdown. We don’t have the big MNC clients. So, we are protected a bit, not completely though. But at the same time, if anybody says they are not affected by the slowdown, then they are not being true. We all are affected, there is no doubt about it. According to me, the real test time would be in the next six months, that is, the January-June 2009 period. It is the time where we stack up by June, and then notice whether the economy it is picking up or going to be through torment.

Q. None of the other formats are JV formats. So, why are you look at JVs only for these two models/formats?

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Because specialised skills in this space don’t exist in India. You need a very large database, and you need a very strong partner who has the backend, the database and the people to do the work. It is the retail segment and there is no fit equivalent. There are hundreds of small shops and umbrellas, but no one that I call ‘gold standards’ in what they do of international repute. So, when I am looking at an international partner, I am looking at the best in class.

Q. How are the media businesses doing currently?

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The media business is doing well in the current times. We close in March, so we still have a quarter to go. So far, till December we have done well. But because we have invested heavily into these units and settling our people, the effort and energy in doing the offices and people, it has been a complete drill. However, we are still not done with the hirings for the new launches. We need a national network. Hence, the investment still continues for Celsius, Terra, Water and 10 integrated.

To sum it up, I think we are consolidating our position in 2008-09. Obviously, we are looking to growth, but it is also time to sort of pulling back and adopting a ‘wait and watch’ approach. Still, I think the best time to consolidate is now. Because if it picks up, then you have the luxury of holding your horses and taking stock of the situation in the areas where you probably are weak or need improvement.