Twenty-one months ago, armed with an entrepreneurial streak and a few close colleagues, Nabendu Bhattacharyya, founder and managing director, Milestone Brandcom, who having spent a decade at Ogilvy Action, quit as president, to launch the OOH (out of home) agency, during one of the lowest financial phases of the decade. Bhattacharyya, in an exclusive interview with afaqs!, talks about his future plans for the agency, its vision, and its learnings
We are looking at covering the whole spectrum of communication in through the line and below the line (BTL) solutions. The idea is that when we go to a client, we should be able to address all his communication needs with a complete all-round solution.
One logical move from here for us is to get into retail solutions. We are looking at visual merchandising, in-store, and outside the store merchandising in upscale retail. The retail division will be called Milestone Last Mile. Secondly, we also plan to roll out a promotions and events division, which will be called Milestone Connect, in order to connect with the consumer. Both divisions are scheduled for a launch within the next two months.
The other big news is that we are looking at setting up Storyboard Brand Communications, our second OOH agency, in the next couple of months.
The reason behind the launch of a second agency is mainly to attract more talent, good talent, in the company, and not just build another agency to attract more clients. Storyboard will have separate teams and separate clients.
Jim Collins, in one of his books, talks about how you try and get the best people on the bus and remove the dead wood from there because then you don't need a captain. The bus will automatically reach its destination. We plan to operate accordingly.
Why we can't have all this talent within Milestone Brandcom is because people have their needs of hierarchy, so the idea is to give them comfort. We are looking at a team of 30 members for Storyboard, within the three offices across Mumbai, Delhi and Bengaluru.
While it's still early to talk about this, our plan is to roll out a full-fledged advertising agency. We have 50-70 brands with us today, so why not create an ad agency and take the logical move forward? We are looking for the right opportunities, and if we attract the best talent, there's a possibility that we could start within six months. Thus, the agencies will all fall under the Milestone Brandcom Communications umbrella, where Milestone Brandcom will be the communication agency -- the advertising agency, its outdoor division will be Milestone Out of Home, followed by Milestone Last Mile and Milestone Connect.
For Storyboard, we're creating a separate company, it will operate as a separate entity, and will have its own liberties, its own positioning, and its own character.
The initial brands that came on board were a big boost for us. These consisted of 12 brands that joined us in the first month and included Binani Cement, BSP Black Rock, Tanishq Watches, Cloud 9, DishTV, Colors, Axis Bank, Axis MF and Prudential Life Insurance.
Recent brands that have come on board include STAR TV (it works with multiple agencies, though). We've handled Kingfisher also in a number of locations, as well as BBC Entertainment and Tashi, the premium shoe brand from TATA. Marriott, Tanishq, Tata Indicom, Photon and Walky are also some of the other important brands.
We started with seven people initially, and built a small team of 25 people. Today, we are 115 people, in 42 offices across the country. The relationships built with clients while at Ogilvy helped us quite a bit. Also, the top key 6-7 people who left with me gave the clients and me, the strength we needed. Our objective was clear, we were looking at fresh talent to get fresh energy, and also take into consideration the cost factor.
The most important thing was when we decided (as a strategy) that we will have complete transparency, and credibility through our payment structure, and that we would follow the best practices.
We ended up reducing the minimum payment terms from 120 days to 45-60 days. That helped us get the best prices in the market from media owners and also spread goodwill for us. Also, as an agency, we have developed a more strategic level of thinking and creative solutions, offered more value and also developed our digitised monitoring web portal for clients.
This is a very honest confession that I'll make about the basic difference between entrepreneurship and the corporate set-up. At the corporate level, we were running more as a brand, which was Ogilvy, and many clients never questioned us when we drove the business through creative leadership. It's when we became entrepreneurs that we understood the things we needed to do for a brand that were not being done.
So, we concentrated more on accountability, like the digitised monitoring part. Then came planning -- you have to be able to tell clients why they need to spend a specific amount and what return on investment (ROI) it will get them (basically, the logic behind the plan).
Today, at any presentation, any brief, we approach this very logically and scientifically. When you come out on your own as an entrepreneur, your mind works 24x7, and is constantly hunting. You're thinking 'what is it that I can do differently that the client will be attracted to'. That's exactly what we did. One example was we brought in the new outdoor format of 'Airships' at that time, which did well for some time.
As entrepreneurs, we are saying that the next milestone is avant-garde. We want to become pioneers, not just by numbers, but through our vision and the way we behave. We want to be nimble-footed, talk less and our actions should speak louder. I will not rest until I reach that level.
I do not want people to associate this agency with me and the others who started it. It should become a big enough agency with its own identity and name.
Also, the edge I want to achieve is to move beyond India. That's a very close-knit discussion I'm having with my private equity partner. We are planning a presence in the Asia-Pacific and Europe region.
Currently, there are a couple of large media houses that would like to acquire us, and while one gets lured by that, I'm very composed at this point, and I know this is not the time. It's not just about money, but about one's achievements.
We're looking at investments to forge ahead and are looking more at strategic investors now, who can help us with their contacts, network and knowledge. Earlier, the focus was financial investors -- not so much strategy, but now this has reversed.
Competition has increased immensely. Everybody is undercutting to give lower and lower rates and one can't blame clients for it. There is no science to pricing of a site. Nobody now knows the real rate. But, I'm sure it will settle down in time because clients will look at value offerings from the industry.
I see many agencies closing down in the next couple of years, because of this undercutting. People are working with commissions as low as one per cent. No one can sustain that. I foresee consolidation not just amongst media owners, but OOH agencies as well. I believe media owners will become bigger and stronger.
Also, the new rule for service taxes laid down by the government for the media and advertising industry is a positive move. The rule of paying the service tax on the day you bill means that an agency has to invest so much more money. In the outdoor industry, a client pays in 90 or 120 days, thus this money goes from your pocket. For someone like us, who is doing Rs 15 crore billing per month, 10 per cent of that is Rs 1.5 crore. A 90-day payment term means that we have to keep a cash flow of Rs 4.5 crore ready, if we don't collect it from the client. This new rule will make our industry much more organised. Fly-by-night operators will have no place in this industry.