Ad agencies have been pathetic in their talent practices

Ravi Kiran, managing director, Starcom west/south, is a man full of energy. Apart from leading a team of 40 people in Mumbai, he finds time to shuttle between offices in the country, especially in his domain areas in the south and west, with the result that over the last one year, Starcom has managed to grab the headlines for significant account gains, people movements and allied initiatives. In this free-wheeling conversation with Viveat Susan Pinto of agencyfaqs!, the ex-Lintas, Initiative Media and Leo Burnett hand, who has an MBA degree from FMS, Delhi, dwells on the problems plaguing the media industry and Starcom's turnaround since its restructuring last year.

Edited Excerpts

In reality, it has been very exciting. It may be a cliché, but the view from the top is very different. Growing from functional leadership (heading buying and new business at Starcom) to a much larger organisational responsibility, where I am in charge of the people, place, new recruitment, clients, the organisation's growth road map, is a unique set of responsibilities altogether. It has been hectic, exciting, and couple of times frustrating.

I think the biggest challenge for me, when I took over, was to understand how happy our people were with the company. How happy were our clients with us? I knew there were no straight answers. So a month or two after I took over, we did a satisfaction survey within the company. In addition to getting a quantitative score using one of our global templates, it also gave us a chance to understand the areas of satisfaction or dissatisfaction within our people. A lot of the learnings we derived from the survey have helped in making Starcom a far more exciting place to work.

The credit for this transformation should not go to me. All of us understood and realised that we need to be much more focused about people than we have ever been, and everybody participated wholeheartedly. The day I took over, that is, February 3, 2003, I thought there were 40 people who would work for me. But the very next day I figured that it is better for me to work for those 40 guys. I think this has been the most exciting part of my journey, to work for 40 bosses, technically speaking.

We are far more energetic, positive, perhaps aggressive, and certainly youthful as an agency. We have maintained the fundamental elements of what Starcom has always stood for, which is to accept every brand and client as unique and not be a provider of standard, cookie-cutter solutions. In that sense, we believe in providing solutions that are practical and made-for-the-client.

With regard to our portfolio of clients, I think it is wrong to evaluate them solely on the basis of size. This applies to any client for that matter. It is true that if you cannot service an account, you should not take it. We've had to decline a couple of accounts in the past because the kind of demands the client was making and the revenues were not commensurate. There are a number of reasons for taking up an account, and size and revenue are one of them. Sometimes you take up an account because you can do great business-building work, where the client has a specific problem, and you believe you have a solution to it. By taking up the account you are allowing yourself the opportunity to significantly impact your client's business.

When a small client comes to us, whose spend levels are in the region of Rs 5-10 crore, we look at that as a kind of opportunity. Sometimes clients can bring with them a new way of looking at a problem or solution. Some clients, on the other hand, are rule breakers. Hence, if you get a rule-breaker client regardless of size, it is necessary to evaluate whether it is worth taking up because you will find new ways of breaking rules. Symphony, a client we signed last week, is a case in point. This company has created a category out of a commodity around 10-12 years ago. And nobody has been as successful as them in that particular segment, which is branded air coolers. We took up an account called MTV Plugged a few months ago, which is a very small business. But we took it up for specific reasons. The client's core target audience was youth and that time we had a couple of disciplines, which we felt required application of a youth brand.

Hence, there are reasons for taking up clients of different sizes, and it is not always true that big is better. Sure, big clients give you the stability of revenue and ability to invest more. But it is not client size alone that counts. What is the kind of product he will buy from you, the kind of people you will attract on the account, whether you can dabble in good work at all, these are the issues that matter.

We are not claiming that we want to take only small clients. We are saying that the size of the client is one criterion to decide whether to go after that particular business or not. On the one hand, we have IOC, Heinz, Balsara and Sony (in Delhi), which are large enough. On the other hand, we have smaller accounts, some of which are taken up because the partner creative agency is keen to do cutting edge work on the brand.

The point I am trying to make is that irrespective of size, if you are not able to service the client's needs you should give it up. The issue is not small versus large. The point is can you service your client's needs profitably, at the same time keeping the morale of your team high? If you can, you should hold on to the business.

This is one of the biggest myths of the business. In all markets, not only in India, as long as you are in the Top 6, and we are probably fourth or fifth in line, size doesn't matter. Sometimes being too large can work against you because quite often you are competing against yourself. We have faced such a scenario in a couple of markets abroad. Second, agency size, by and large, despite what some entities may want the world to believe, has very little to do with the product that the client ultimately gets. In the good old days, markets where media was under supplied or too much demand was chasing too little supply, being large helped. In our market, media, in general, is in over supply. Hence it is not in being large, but being smart that counts. In fact, if you get too large, it tends to feed on itself. You think that because you are large, perhaps, you are getting the best. Ask the media owner. It is not in the media owner's interest to give the best of prices to the largest agency. It defies logic because they expose themselves that much more, and we have proved this to several clients, which we will continue doing because there are advertisers still holding on to classical perceptions.

The question is not whether I am No 1 or No 2. The point is that we are a large global player, not a homegrown, small-perspective brand. In any market that we operate, we are not going to resign ourselves to a No 4 or 5 position forever. It is not in our interest. Having said that, we also don't believe that a mindless chase for billings is good for the client or the agency. We know of agencies, which, in their mindless chase for billings have created havoc within their setups. They have played around with their people's motivation, profitability, product offering and dropped service levels to clients. Some agencies even offer their services for free. They have undermined the role of the brain of our business, which is strategic planning. Such agencies are disgusting. It does not matter whether you are No 1 or No 30; if you do not know how to respect your people and their intellect, your ranking is just a mathematical figure. For the client, it (that is, ranking) is merely a badge. They do not give a damn. If I were a client, I would rather be significantly sized to a No 4 agency than be a minor client to a large agency. Ask the client. The truth of the matter will be revealed.

I will not deny the possibility. But that doesn't mean we are about to launch a new brand. We have three mainline media brands - Starcom, MediaVest and Starlink - that operate globally. It was decided when the merger between Starcom and MediaVest happened globally in the year 2000 that the Starcom brand name would be retained in the Asia Pacific region. Barring eight or nine markets, where the MediaVest brand operates, elsewhere, the Starcom brand is in operation. Starlink, on the other hand, operates in the US market with an interesting business model, namely, it does not take up direct clients, but only smaller agencies. It operates with the same pedigree and heritage of Starcom, but it gives its clients a different made-to-order kind of service. The possibility of launching new brands exists for any global agency, but until we know of the time when it is absolutely essential, we are not going to use branding frivolously. We know of agencies that are doing that, but we will not indulge in such a practice.

This trend is prevalent all over the world. I don't think media agencies are moving away, they are merely reinventing themselves. In the early days, the media guys were particularly shy, good in calculations, not good in client servicing, most of them did not have a business school background. Over time, as more and more media data became available coupled with information on product usage, the skill sets required to analyse and study this data became different. That is when media planners developed skills to understand and assimilate information beyond traditional frontiers. They understood the relationship between product usage and media behaviour.

Over time, the separation of creative and media led to account planners in most full-service agencies giving up the quantitative side of their function. They became more conceptual and qualitative-oriented. This separation of functions is pretty much complete today. Most account planning people in creative agencies today do not have a quantitative research background. They either have a client servicing or qualitative research background. Again, the real insights, that is, quantitative insights and the ability to analyse data and make meaning out of it today decides the media.

So I am not surprised that media honchos are thinking much more about brand custodianship and communication planning. But I don't think one should read it as some kind of a conflict scenario. Whoever thinks brand or delivers better service to the client is the guy who deserves it. These demarcations are man-made. I think what media guys would never want to do is actually produce creative. I hope they don't. But how about creative thinking? Is that the domain of anybody in particular? I don't think so. It is a human faculty and a lot of media agencies are focusing on this basic human faculty to deliver solutions to clients. I don't think there is any harm in it. In fact, it is the basic requirement of the business.

There should be specialisation around consumer groups rather than a medium. Around the world as well as in India, a lot of media agencies are committing themselves to media neutrality of ideas. In other words, an idea should be able to transcend media because that is how consumers are. They are media neutral. Speaking about media professionals, I think too many of them have become information postmen. A lot of their effort is driven towards those media vehicles where they can quickly get tons of information on hand. As a result, many of them are too focused on the computer screen and believe that human beings are numbers on the computer, and therefore, perhaps, media is mathematics. But let me tell you that media is not mathematics. Media professionals today, need to shape themselves to be better insight providers not information providers. That is what the client expects from his or her media agency. Clients don't have the patience to derive insightful meaning from data. At the same time, clients want insight. They want sharper ways of converting customers rather than merely talking to them.

Hence the transition for the media professional has to be from information to insight. The days of being a walking encyclopaedia are over. What the client is looking for are simple solutions to complex problems. What we end up doing, however, is making the problem seem more complex than it really is at times. I am not saying that problems are simple. Typically, clients have very complex problems. But I don't think our objective is served by making the solution even more complex. We have got to go back to basics, got to provide solutions out of big, breakthrough, rule-breaking ideas that are simple.

Each one of us owes it to ourselves to base our decisions on knowledge as much as possible, but we must be willing to take calculated risks as well. If I rephrase gut feel as a willingness to take calculated risks and judgment based on experience, then everybody takes a judgmental call. I don't think it is black or white. You do as much fact-finding as you can from available knowledge and research, but at some point, you will be challenged with an opportunity to take a risk. Unfortunately, gut feel is portrayed as being negative. From where does gut feel emanate? It emanates when you really feel something in the gut, right? It squeezes your stomach, doesn't it? To put it succinctly, gut feel is a strong belief in yourself, your product, preferably based on experience. And knowing fully well that everything I do, particularly in media, since I am playing with human minds, has a finite chance of success. There is a finite chance of failure as well. There is no either or.

We (that is, Starcom) invest heavily in research. But there is no mindless usage of research. What are human beings for? Why would I recruit MBAs? I could simply invest in machines for that matter. In our zeal to deliver the product faster, in succumbing to client demands to be more and more responsive to the extent of being over-responsive, some of us adopt these short cuts, where we either take too mechanistic a view and throw up whatever comes first or we don't even bother at unearthing knowledge and finding out anything from research before taking a gut call. In my view you don't have to take a categorical call between research and gut feel. I think both are important. You do what you believe is right; base your decision as far as possible on meaningful understanding of data, that's it.

I see many traits of an imperfect and less than mature market. Obsessiveness with rates is one of them. The question is equally valid to both agencies and advertisers, but I think the trend is positive. Also in securing the lowest rates, the earlier tribalism is giving way to some amount of discipline and scientific negotiation planning. What is a pity is that some of us, that is, both advertisers and agencies, make media investment (buying) look too simplistic and facile while the others over complicate it beyond desire. I believe both extremes waste human energy and are avoidable.

I don't expect dramatic changes in client attitude to compensation in the period of a year. Most clients are still focused on the input side and prefer working on the principle of 'a bird in hand is better than two in the bush' trying to save a buck on agency compensation. The trend will continue for some time. However, evolved clients, especially those who understand and respect the intellectual role of agencies contrasted with the middleman role, will be fairer in remunerating their agencies. Over a two-three-year timeframe, I foresee many a smart client moving to an outcome and value-based remuneration system rather than an input and effort-based one prevalent today, both with percentage as well as fee. Some of our new clients already remunerate us on value delivered. I also foresee many clients moving to a more disciplined and mutually rewarding PBR or Payment by Results system, where good performance can yield dramatic profitability for the agency.

My first priority is continued enhancement of service delivery to our clients. Last year we gave ourselves a new vision of being the most exciting service organisation to work with and this is going to be the first full year of translating that vision. On the cards is a formal client-satisfaction survey, which will determine our future course of action in turning them (that is, clients) into advocates.

My second priority is de-risking of our long-term growth by developing non-mainstream offerings. We have completed a five-year plan in December last year and have a fairly clear idea as to where we want to go. Late last year, we announced the launch of Relay Worldwide as India's first sports agency and are going to focus a lot on this initiative. Our digital marketing service, Starcom Digital, is doing a rejig, and we have achieved some early successes with Bollywood in this area. This division will see a lot of action in at least, five other domains that we have identified with a possible name change of the wing (that is, Starcom Digital) as well. We are incubating four new competencies within Starcom and as many as six new business areas, couple of which are market-firsts to be launched over the next 18-24 months depending on market receptivity and how profitable the business model is.

Apart from all this, we will improve our investment in talent, training and workplace enhancement dramatically. I believe ad agencies have been pathetic in their talent practices, very often putting policy ahead of people and relegating the human resources function to junior people. We are changing this in our own way. At Starcom, talent is a top management function and 2004 may see us taking an educational initiative into half a dozen B-Schools in an attempt to proactively develop the talent base available to us.