Beyond media mindset, agencies need to have business mindset as well: Lodestar UM's Aditi Mishra

In a rapidly evolving marketing landscape, Lodestar UM, a legacy agency that belongs to the global network IPG Mediabrands, is striving to go beyond its traditional media duties. Working on the promise of future-proofing its clients' business, the agency not only focusses on media plans, but also looks at the purpose and impact of media in driving business objectives. 

"A media agency, today, needs to have a bifocal view. We're training people to develop a business mindset that goes beyond a media mindset," said Aditi Mishra, CEO, Lodestar UM. 

Speaking on the sidelines of Goafest 2023 last month, Mishra said that a media mindset is hygiene, but beyond it, an agency needs to also have a business mindset. For example, if a brand's spending on the Indian Premier League (IPL) for two years, should it continue to spend on it, or invest the money elsewhere and do something more business-oriented?  

"Current conversations with clients, revolve around determining the optimal allocation of marketing budgets for media, looking at other things they should be doing that can be more powerful, and how media can collaborate with that." 

Mishra also spoke about Lodestar UM's recent account wins, plans and the advertising outlook for the year.

Edited excerpts:

How has the year been for Lodestar UM, from a business standpoint?

The year has been quite favourable for us, particularly the last eight months. We've retained some prestigious businesses after a fairly rigorous process. It's truly gratifying when a business we've been working with, decides to continue partnering with us, because it establishes the fact that the client believes in what you've done for them.

One notable example is our BMW win. It's a brand we're proud to collaborate with. Despite facing stiff competition from a larger, well-established heritage brand, BMW has come close to surpassing all its business targets in the past year. We've also had other clients who've chosen to stay with us, which further reinforces the trust they have in our services and the value we provide to them.

How much business have these new accounts brought in?

It's difficult to say, because when one acquires new clients, it takes time for them to start spending. It also depends on the industry and changing market categories. Two categories have seen significant change - EVs and fintech. Our collaboration with Ather began one-and-a-half years ago, when it had just entered the media space. This category has experienced significant growth, as has PhonePe. These kinds of categories have shown substantial progress.

However, the overall economic situation last year, led many of our traditional clients to hold their budgets. They preferred to observe market developments, before making any investments. Thus, the business landscape has been a mixed bag. These new brands that have been spending a lot, such as Ather, would have brought in gains of around 15% over the past one-and-a-half years. 

The business performance has been a combination of growth in emerging categories and cautious spending from traditional clients, with industry-specific changes playing a significant role.

What's the direction that Lodestar UM is headed in right now?

Our promise is to future-proof our clients' businesses. It means not just winning in the short-term, but also establishing growth over the long-term. We've identified three key principles to achieve this. First, being audience obsessed and understanding the target audience deeply.

Second, prioritising experience mapping to create a holistic brand experience throughout the consumer journey, considering all touchpoints, rather than fragmented silos. Last, highlighting the importance of measurement, ensuring that all actions have clear business outcomes and results. So, that's the direction we want to take.

The agency needs to have a bifocal view. While we strive to deliver on current plan KPIs, we also need to assess if those KPIs are really driving what the business needs to do tomorrow.

For example, if a brand was spending on the IPL for two years, should it continue to spend on it, or invest the money elsewhere and do something more business oriented? We're training people to develop a business mindset that goes beyond a media mindset. It's understanding the purpose and impact of media in driving business objectives.

Additionally, agility is critical in today's fast-paced world. Clients now require quicker responses, with shorter planning cycles, like one-month or one-quarter plans. Marketers are under pressure and have to be adaptable partners to help the clients navigate these demands effectively.

How have brand's expectations from their agencies changed, post-COVID?

One notable change is that marketing, as a function itself, is being questioned. In some cases, marketers now report to chief technology officers (CTOs), highlighting the evolving nature of the business. As agencies partner with marketing functions in this changing landscape, it becomes crucial to enable the marketers to effectively communicate the value of marketing, both internally and externally.

The focus is on telling the story of marketing more compellingly, while remaining outwardly focussed on driving business. These tasks must be accomplished at a faster pace, than ever before, leveraging the abundance of available data.

Now, there's also greater emphasis on ownership of business results by brand marketers. In the past, a media plan based on impressions, or GRPs, was often deemed sufficient. However, current conversations with clients, revolve around determining the optimal allocation of marketing budgets for media, looking at other things that they should be doing which can be more powerful, and how media can collaborate with that.

Since media represents a significant investment, it has become increasingly important to have these conversations well in advance, rather than simply creating an ad and running it. Early discussions ensure focus on delivering measurable results, with a bifocal view and much faster.

We've seen an ad blitzkrieg play out with the IPL. But there's a lot of talk about the macroeconomic conditions affecting advertising. How does the outlook look right now?

From an external perspective, India has been regarded as a resilient market, surpassing global scenarios. However, official data indicates that the projected GDP growth has declined, as compared to the current situation. This is the first macroeconomic perspective. 

The second perspective is related to consumer behaviour and spending. Interestingly, over the last two years, particularly the last one, categories catering to affluent and premium audiences, have witnessed growth.

On the other hand, the middle-income segment, which constitutes a significant portion of the economy, is experiencing pressure. While people still have money and disposable income, the demand for daily products and services, isn't growing. 

Moreover, challenges such as unpredictable monsoons, further impact demand, especially for consumer packaged good (CPG) brands in rural areas. Taking all of this into account, the outlook can be described as cautiously optimistic. It is not a situation of great prosperity or an immediate bounce-back as initially expected after the pandemic. Progress will likely be gradual and incremental. 

However, it is not a dire situation either. Some categories, like infrastructure and BFSI, will see growth. CPG will remain stable, but may not experience dramatic growth due to challenges, such as rising input costs. 

The automobile sector is expected to be interesting, with premium autos likely to witness growth, while mid-range autos will cater to pent-up demand, without significant investment in creating demand. In such cases, brands may focus on leveraging existing demand through customer relationship management (CRM) and relationship-building strategies.

Overall, it's crucial to have conversations about business objectives and the deployment of marketing resources to navigate the current landscape effectively.