Tapas Gupta, Managing Director, BEI Confluence
"People still don't look at advertising with respect. I don't think advertising is still designated as an industry. Industry status is required since advertising plays a very significant role in our lives. We hope to be earning respect for the industry, earning respect for its professionals. Shrinking revenues from advertising industry is another big problem that we are facing. It has to be addressed on an industry forum level."
He has headed McCann-Erickson Delhi, Kolkata and Kathmandu offices as Senior VP and Director from 1987-95. He has overseen M-EW Bangalore from 1991-93.
Gupta was deputed by McCann-Erickson to head M-EW's new JV agency, PSL- Erickson, in 1996 as President and CEO. He was CEO of the agency from 1996 to 1998.
He has also worked in senior positions in McCann's Hong Kong and Manila offices leading large brands like Nestle, Coca-Cola, and General Motors, among others.
In a freewheeling interview with exchange4media's Pallavi Goorha and Sumita Patra, Gupta speaks in detail about setting up BEI Confluence, the challenges facing the advertising industry today as well as agency-client relationship. Excerpts: Q. Apart from great ideas and creative element, what do you think makes for an effective ad?
Great product makes a great ad. The quality of the product is very important. Even in today's world USPs are very important. Today, things have changed to creating unique perception about the brand. I think the formula is the same. Good looking models, good looking ambience, good actors and actresses, great typography, and great layouts are certain elements that can make for an effective ad.
Q. One of the serious issues faced by the advertising industry today is retention of talent. What do you attribute this to?
Retention of talent is a very serious issue that we are grappling with. Today, retaining talent is far more difficult than retaining clients because today good people don't prefer to come to advertising, one of the main reasons being remuneration. Salary is one of the biggest restraints in advertising as compared to other sectors. Moreover, the challenges are far greater in other industries like IT, banking, etc. Advertising has become a less lucrative profession. I think we, as leaders of the advertising industry, are to be blamed for it. We have not projected advertising as a huge career opportunity. We all are responsible.
Q. You have set a target of close to Rs 145 crore next year. How are you going to achieve that?
The growth will be achieved both organically and inorganically. Organically, through our existing businesses, clients are growing, inorganically through Hocus Focus and other units, as well as through acquisitions. We are going to tie up with a direct marketing company. I can't reveal much regarding the business plan.
Q. When is that likely to start?
You will see one or two of our serials on air by the end of 2007. We are also planning to get into the production and direction of reality shows. Entertainment is also communication and is completing a part of the huge 360-degree approach that we talk about. Hocus Focus is a practical example of another facet of entertainment. We are also looking at directing and producing feature films, but that might take another two years.
Q. What is your take on the pitch fees issue?
I am in favour of it. The industry has to do it. We cannot advocate the issue as individuals. We, as an advertising community, need to go and ask for pitch fees jointly to the client.
Q. How has the client-agency relationship changed over the years?
There is no such thing as change or not change. There have been clients 20 years ago who never respected agencies and treated them as suppliers. There are some clients even now who do exactly the same thing. Some clients treat agencies as consultants. There are some clients who treat agencies as creative suppliers. There are professional clients, there are unprofessional clients and we have to deal with all sorts of clients. The dynamics of the client-agency relationship remain the same.
Q. Of late, we have been seeing a lot of mergers and acquisitions happening. Do you envisage a time where only bigger networks will continue to exist?
I think there will be a time when there will be creative hot shops which will be running small time. There will be small time media agencies with INS accreditation and there will be medium-big agencies. Medium agencies will always play a very significant role. We don't want to be big, we will continue to remain a mid-sized agency because medium agencies are a great click. There are medium-sized clients as well, who feel threatened when they approach big agencies. Smaller agencies will continue to survive. I don't think anybody is going to close shop.
Q. You spent around 20 years with McCann Erickson and you were at the helm as CEO when you quit and went on to start Confluence Communication. What made you quit a plush profile and start up an entirely new venture?
I was the CEO of McCann's new venture, PSL Erickson (Press Syndicate Ltd), which started as McCann's second agency. It was a joint venture with Mahindra & Mahindra. It started off very well. We closed the billings at Rs 35 crore in our first year of existence in 1996. I worked there from the end of 1995 to early 1999. It gave me a tremendous experience of developing a business from scratch, which prompted me to actually start a new operation and take it to great heights. Having gained tremendous experience, I thought of functioning on my own. We started in a small way, but within three months the business started growing and from then on there has been no looking back.
Q. What were the challenges you faced at that point of time?
The challenges were exactly the same that I had in PSL Erickson. The only difference was that there I had the McCann brand name and back-up. Here, it was entirely my own venture and hence, it was very important for me to ensure that the agency did quality work. We were lucky as we got a few good accounts like Paras Milk, Maxima Watches, and Chinese electronic giant TCL at the early stages, which gave us a huge visibility and helped grow our business. We closed between Rs 15 crore and Rs 20 crore in the first year. Today, we are close to Rs 100 crore and would be among the top 25 agencies in terms of billing. This year (2006-07) we have grown by 40 per cent and are very bullish about growth. We not only want to grow through the BEI Confluence route, but also through our subsidiaries. We have set a target of nearly Rs 145 crore next year.
Q. You have recently launched a film production arm, Hocus Focus. What made
We have ventured into the business of entertainment with Hocus Focus. It is primarily geared to do in-film advertising. We are working very closely with filmmaker Rakesh Roshan's next film and one of Aamir Khan's ventures. In-film advertising has become a big thing today, offering huge opportunities. The next step of Hocus Focus would be to get into the TV serial business. We want to produce and direct serials.
Q. How difficult or easy is it to set up an agency from scratch in the present scenario?
I have always believed that it is never easy to set up an agency – be it in 1999 or in 2007. There are some people who like challenges. I had three options – either to stay with McCann or set up my own agency or choose to lead a semi-retired life. I chose to start my own agency. I quit because I wanted to do things on my own and started Confluence in 1999. Even in my wildest dreams, I did not envisage that Confluence would reach this level. My vision of Confluence was to have a close-knit system, do good creative work and be Delhi restricted, but it hasn't worked that way. Now that I have tasted growth, I am bullish. I have given up my vision of a compact creative agency. This agency has become big now. If I am able to drive it the way I am driving it, in two years' time we should be among the top 20.
Confluence entered into a foreign collaboration with BEI about two years back. I felt that in order to drive growth one needed an international partner because today clients respect the so called international agencies more than the desi agencies, today it's more about an image.
Q. How has advertising changed over the years? Is it for the good or the worse?
Advertising has changed in terms of technology. It has changed a lot in terms of creativity too. Today, advertising has come far closer to the consumer's psyche because the new generation of advertising professionals does not have any colonial hangovers. They are very clear about the consumer's psyche. Today, advertising has become far more consumer centric and language centric. It captures India's ethos, dreams and aspirations. India has emerged as a powerful country and advertising is reflecting that. Today, any good advertising creates far more difference to the brand as well as to the consumers than it has done in the past. Advertising has certainly changed for the good.
Q. You have recently strengthened your team in Eastern India. How is advertising perceived in East India compared to other markets?
When you talk about East India, I would primarily focus on Kolkata. I see Kolkata as an emerging market. Advertising there is perceived with equal interest and enthusiasm. Eastern India also has the same psyche. Kolkata is an introvert market, but things are changing drastically. I don't see any great difference in the interest and involvement in advertising, but I do see a difference in buying power.
Q. How can we deal with the situation?
We should organise big festivals, big events and seminars to attract talent more often, to show the youngsters the dream. It is far better to show them the dreams about the industry collectively than to do it one on one. It is important to make advertising a national industry and, therefore, have training and development, have workshops and seminars.
Q. What kinds of thoughts go through your mind when you pitch for a client? How do you decide on that?
We go for non-conflicting and reputed clients. We do business only when it makes business sense to us or when it gives us a good creative opportunity.
Q. What kind of revenues does Hocus Focus contribute to your entire portfolio?
It's just a two-month old baby and has not yet started contributing in a substantial way. As of now, the revenues come to the Group. But I might spin off Hocus Focus as an independent company in June or July this year.
Q. Share with us your expansion plans. What about overseas plans?
We are not looking at further expansions in India. Internationally, we are looking at starting our operations in Dhaka by 2008.
Q. Tell us something about Q-Plus.
Q-Plus is basically a quality mantra that we started in October last year. We not only use it in advertising but also in our office. Q-Plus stands for Quality Plus, it is about being obsessive about quality.
Q. You are one of the members of the executive committee of AAAI. What are the issues, apart from the retention of talent, that need serious attention?
I think the other serious issue that we are grappling with is to make advertising a prominent industry in the country. People still don't look at advertising with respect. I don't think advertising is still designated as an industry. Industry status is required since advertising plays a very significant role in our lives. We hope to be earning respect for the industry, earning respect for its professionals. Shrinking revenues from advertising industry is another big problem that we are facing. It has to be addressed on an industry forum level.
