Sam Balsara, Chairman, Madison World

Sam Balsara, Chairman, Madison World, knew the Indian media business much before international media conglomerates realised that India is the country of the future. He operates in a medium that is dominated by global players, and yet his client portfolio boasts of P&G, Airtel, TVS, Godrej, GM, Marico, Cadbury, Gillette, Zee Network, Asian Paints, Tata Chemicals and Tata Tea, among many others. And this is just one unit of his World! Be it an advertising or even broadcast industry issue, or development, it is near impossible that he has not had a say in making it happen.

A prominent figure of the Indian advertising industry, Balsara has over 30 years' experience – eight in marketing with Sarabhais and Cadbury's and the rest in advertising with Contract, Mudra and Madison. He started Madison in 1988.

In this interview with exchange4media's Noor Fathima Warsia, Balsara speaks on what it means to be an Indian player in an MNC-dominated market, and his views on the way forward for the industry. Excerpts:

Q. You have seen this media industry grow from where it was to what it is today. Is there any area where the industry should get together for its growth?

The biggest challenge, as I see it, is our remuneration. I don't think there exists anywhere in the world a business service that does so much work, so much analyses, generates so many figures, strategies, commercial transactions, and delivers so much value to clients, in an area that is vital to them – but at a price that is a pittance! Why has that happened? I have my views on this. Some of these commission levels were operating in the US, which is a $200-billion market, which converts to Rs 800,000 crore today. Is it fair to apply the same percentages to a base of Rs 15,000 crore? I don't think so. Unfortunately, we got stuck in this. Then, as newer agencies came in, the only concrete difference they could offer was lower commission. Many were quick to lap this up and drive remuneration down. However, going forward, these levels have to go up or the quality of media service is going to suffer. Another thing that concerns me is that of the number of people who have left media agencies in the recent past to join other businesses. Four people from one agency recently left to join the mobile sector! This, too, is an area of serious concern to the industry. In the last 10 years, media agencies have done a wonderful job of developing a cadre of extremely talented people with multifarious skills. It is unfortunate that media agencies have not able to remunerate them as well as some of the other sectors. I am told that outside of the media agency, there is a lot of money, and a lot less work. I don't think that is true, and I believe that people who have left media agencies would look back and say ‘those were the most fulfilling of my years'. Nevertheless, that is the situation today.

The overall level is not substantive enough in today's India, and for this, the media agencies themselves are to blame. We have to put our foot down, and we have to offer quality service at the right price. Anything lower would be substandard service and we will not offer that. The seller has to determine the selling price. We must take responsibility for our actions and we should take some corrective measures.

The honest reality is that Madison Media is the strongest brand in our fold, but I don't think this should affect the other brands, because every unit cannot be as strong as some of the others. That said, each Madison unit is doing great work for the domain that it is in. Our main reason for going in for this structure is due to the specialisation that comes with this structure. Clients don't appoint an agency because they are familiar with the agency or because the agency can do everything. Clients want best-in-class services, because they know that if they want to be the best-in-class, they need those kinds of partners. Therefore, they go the extra mile to find such partners. Specialisation builds a body of knowledge and allows transfer of learning. It develops a cadre of specialists and experts, and it equips them with the skills of the trade so that they can do the same work faster. Given all this, we have taken this route, and we have gone into many new areas that many others haven't even ventured into.

There are a lot more disciplines that will play a role in brand building going forward. Take a look at some of the specialisations that we have done in retail alone – MRP deals with units that design points of sales. Madison RKD is a complete retail design firm, they get projects to design the retail store. MASH goes into the art and science of why shoppers buy what they buy. These are all new areas in the retail domain, and they have an impact on the way retail marketers are working. These units are a requirement for the modern retail format that is gaining ground so rapidly in India.

Whatever agglomeration had to happen has already happened, according to me. Whatever could be the impact and the consequences of that has already taken place in the market place too. I don't think Omnicom is going to buy WPP. The most that can happen now is maybe say IPG can take its media agencies together. So, I don't see any development that can happen now that would make any material change in the way business would be transacted in future. There are four key players in India now and I think that is one too many – the rule of three will apply.

As for the change in the competitive dynamics, obviously as more and more media agencies come into the country and pitch their tent, people who have very large shares will see drops. However, even as market share might come down in volumes, absolute businesses will go up. In India, advertising is still underutilised. It is only 0.34 per cent of the GDP, and I am quite confident it would go up to 1 per cent sooner or later, and the GDP itself is going up, so there is place for people in that sense.

If you have the interest, you will find the time. The industry needs direction, and industry heads should actively contribute to that. I think this too is a part of work to make our industry grow. At a more personal level, I also believe that if you are having a party, and you've taken the trouble to invite me, I must give it respect and be there. As to how does one manage time for everything, I think it's a question of delegating also. But if you ask my wife, she will tell you I am the worst manager of time, and that is partly true too.

That is true. I think every name there is has had a conversation with us at some point in time, and at the same time, we are also in conversation with many companies to buy stakes in those companies. We don't have any philosophical disagreements in taking in a partner who can help Madison grow, but things have to be interesting enough to consider it as well.

I would be lying if I said there are no challenges because of this – there are challenges every moment of the day. One of the things that keep us going nonetheless is that we believe we are here to do our job as honestly as we can and stick to our charter of delivering outstanding quality of works for our clients. If we can keep doing this, as we see it, we would be all right.

We have some advantages also. One of the largest things that work in our favour is that the organisation's objectives never begin to have greater focus than the clients' objectives. Every Madison-ite's job is to remain focussed to the client's needs. If you think about it, it is a very substantive advantage in today's competitive times, and clients, who are extremely smart people, are quick to recognise that. All Madison-ites are given incentives for the quality of work that they do and the impact of that on their clients' profits and bottomlines; they are not given incentives based on the income or profits they deliver to Madison.

Sure. To give you an example, the whole world is talking about mobile today, but we have been saying that for the past two years. We launched Mobile Surpass one year ago, and have done some fantastic work for some of our clients like Cadbury. In fact, someone told me that what we did for Cadbury with the mobile is the single largest mobile activity in the world, where 30 million people were accessing a single site on results day! Does that make a huge amount of money for us? No. But does that go a long way in making an impact for the Cadbury brand and creating a connect with its consumer? Yes. And that is what is important for us. We have not gone into any of these specialised areas because there are huge monies in them. We see these as emerging areas that are becoming necessary for brand building. Also, such areas can develop only if you make the units independent and let them do their thing to reach their goal.

These areas started only when we found the right talent, otherwise there are so many areas that I want to get into but cannot, because we are not getting the right people.

Yes. I think outdoor was an underutilised media, and the agency business is a very people-driven business. So when a very senior outdoor professional became available to us, we thought that we should launch a second brand in the OOH space, but let it be completely independent, without any overlaps between Platinum and MOMS - they are even housed in separate properties. Platinum would be available in other domains as well. What domain we enter would be a combination of opportunities in the domain and availability of talent. For instance, the media sector is an opportunity. Platinum Media can be a different model from Madison Media. Platinum is one of our youngest and newest units, and in OOH already we are doing extremely well.

That is happening, but I would like to add here that we are the only media agency in India in the last two years to win and be nominated in the media category of awards like the Cannes Lions International Advertising Festival. And we have won international awards in traditional sectors and new media, and that makes us very happy. We also have been awarded by our clients in their global awards. Obviously, we are doing something that is getting us the right recognition. Ultimately, the client wants outstanding work that can succeed in the market place. When we stop delivering on that, irrespective of who we are, what we are, who owns us, we won't survive - in anything.

Sometimes, yes! In 1998, I had said that I wanted to be a craftsman and not a manager, and a good agency is a small agency with a handful of large clients – and look at Madison today. As an organisation, we keep our core values intact, but we need to keep changing to respond to market changes. In fact, when a new person joins Madison, he gets a brochure from us. Across all our units, there is a common set of values that people should imbibe – these are even written on our walls. To my mind, it is very important that the value system is consistent and true, but everything around it should change.

We have also done a lot of thinking on this, and at present, we have decided to keep digital within Madison Media. Digital to some extent requires skill sets which our media people already have. I am not talking about digital in the creative sense, but in the sense of media planning and buying. Since the skill sets involved here are similar, there was no need for a different unit. Maybe we are wrong, but our view currently is that for the kind of brands that we are developing, we can work on the digital solutions from Madison Media itself. That said, consistency is the virtue of fools, so don't hold me to this, I might change my mind!

Global is too big a word. I don't think it would be correct to say that we have global ambitions, but we do have ambitions to operate outside of India. However, in the last two years it has got slightly tempered by the fact that India is the hot bed right now. When we compare every opportunity that we get to the opportunities abroad, it just doesn't make sense to look at that international opportunity. It is not like we are able to go to the US and pitch our tent there – we are looking at markets like the Middle East, which are still not very large. Our COO of Alpha, who also handles our international portfolio, has surveyed various markets. If a good opportunity comes in a market we are interested in, then we would take some action.