'We have an incredible opportunity in India to grow our business in many exciting ways'

WPP India Country Manager CVL Srinivas spoke to BW Businessworld and exchange4media group chairman & editor-in-chief Annurag Batra in a fireside chat at e4m Digital 40 under 40 Summit about the bounce back in the advertising industry, structural shifts in the agency business, and the transformation that is happening at WPP-owned agencies in India.

Excerpts:

Has the advertising industry bounced back from the pandemic-led impact?

Yes! It has bounced back, and the bounce back has been stronger than we expected. In CY2020, the AdEx in India de-grew by 20-25% versus CY2019. If you look at the CAGR up to 2019, the Indian ad industry was growing in double-digits quite comfortably. Suddenly, we saw a big dip last year. This year, the ad industry will be up by 20-25%, albeit on a lower base. By 2022, we will far exceed 2019 levels. The bounce back has been extremely robust in 2021. When we were going through the second wave, there was still some uncertainty but the lockdowns were not as severe as the first wave. In the recent past, cricket and the festive season have helped. Right now, the numbers are telling us that we will end the year with 20-25% growth in AdEx.

What are the key factors behind this bounce back?

At the macro level, the India growth story and the bullishness around India is still intact. We work with a lot of multinational clients and all of them, their headquarters, continue to see India as one of the key markets or perhaps the most important market from a growth perspective. Relatively speaking, India is in a much better position compared to other markets because the headroom for growth is still there and this is true across sectors.

If you look a little deeper at specific sectors, there will be some variation. A few like traditional retail, travel, hospitality and airlines were challenged during the pandemic but are slowly getting back on track. There are other sectors like D2C and tech brands that are spending heavily. If you put all this together, the next few years look very strong.

What are the structural shifts happening in the agency business?

There is a massive opportunity for agencies to move up the value chain. There is a big shift happening from the analogue to the digital world, which is throwing up a lot more data and insights, opportunities on e-commerce, and a heavy demand for content at scale and performance media.  

Given the deep understanding we have of consumers and brands, the investments we have made in data, tech, and our fantastic pool of talent, we get in at an earlier stage of the consumer journey and also play a very important role in the feedback loop.

The word ‘agency’ has to be redefined. Now, it is more a strategic advisory plus delivery model, and that's the evolution we have seen.

Has the Indian media agency ecosystem kept pace with that change?

We have seen a much faster shift to digital media, e-commerce and fluid content post the pandemic. Clients expect their agency partners to help harness their first party data, build communities and drive continuous engagement with compelling content. 

Therefore, the days of working in silos are gone. We went through this whole era of specialisation where the marketing value chain got very fragmented. Today, there is an effort to build a more integrated model together with a strong feedback loop. This will ensure we play a far more strategic role as agencies. 

What is the biggest shift you are seeing in the way clients operate?

Based on the conversations that are happening today with clients, we can call out a couple of themes. One is the theme around helping solve client’s business problems. As part of that solution, we can deliver an ad campaign, a media plan, you could do something on digital media, social media etc. But how do you join it all up and ensure it’s moving the needle on business.

The other theme is around purpose. It cannot be just a tagline, but needs to be built into the company’s philosophy, product, partnerships etc. We have seen data that shows over 80% people believe that brands should put people and planet before profit. Purposeful actions by companies are being rewarded by clients and customers. Brands perceived to have strong ESG credentials grew 2.5X faster. It’s not just consumers demanding more from organisations, but our talent too. Employees say they will be more loyal to a company that prioritises ESG.

What’s your outlook on mergers and acquisitions, and what has been the change in WPP India since you took over?

We continue to look for opportunities to acquire technology, and skills in areas that complement our existing strengths. We already have nearly a dozen centers of excellence in India working in areas like martech, e-commerce, content production, performance media etc. We are leveraging this expertise to drive transformation for our clients.

I would like to believe that we work very collaboratively across the wider company ever since we have had a dedicated country management structure.

We have been integrating our offer to clients, building industry defining partnerships that benefit our clients and people, focusing on strong culture building initiatives and scaling up the impact we drive via our WPP Foundation. We have simplified our structure, including back office, and now have two world-class campuses (in Mumbai and Gurgaon) that house all our operating companies.

What is the biggest transformation that you have done since taking over?

We have great talent and leadership across all our operating companies, and for me, it is an absolute honour to be a part of this team. The coming together of this wonderful team to create more value for our clients, people, partners, and communities has been extremely satisfying. We have a lot more to do as we look ahead, for which, we have together built a strong foundation.

You have been in this business for a long time and have the biggest job in the advertising industry as WPP India chief. You have been there and done that, so what's next for you?

We have an incredible opportunity in India to grow our business in many exciting ways. I am looking forward to the next phase of our journey.