It
was interesting to hear live Sir Martin Sorrell talk at an event organised by India
Chapter of the International Advertising Association (IAA). Audience
comprised of many senior people from the agency background but not many noteworthy
from the client side. Even Sir Martin on the dais was not impressive enough for
healthy client attendance. While the IAA
or any other advertising body members do a fairly good job at selling client
products, they are relatively poor at selling their own events.
While Sir Martin is of course a visionary, I was rather impressed by his oratory skills and wit. He was up against our celebrated journalist Arnab
Goswami. While an honest and bold journalist, Arnab has a very
predictable sort of technique when in a Q&A session. He will pick on some
statement, sometimes insignificant, and will try to corner his guest by
constant hammering and extreme interpretations of the statement. However either
Sir Martin was well prepared or Arnab was not at his usual best, it soon seemed
like a one sided duel where Sir Martin shot each of Arnab’s accusations or
interpretations way outside the door, convincingly. Whenever Arnab wanted to
make an accusation, he would first not allow him to finish, move on to putting
context in place as per what he thought was what he meant and then justify it. Sir
Martin had the upper hand of being the guest of honour and Arnab had not done
his homework well or may be business was not his genre.
During the audience Q&A however Sam Balsara asked an
interesting question on why is WPP focussing so much on Digital in India since
it has just 12% penetration; whilst Print and TV are continuing to grow. Sir
Martin backed the decision to invest heavily on digital advertising since he
expected that to catch up soon. Here is where I have a disconnect.
Spends on Digital have grown substantially and it now
contributes 4% of overall media spends (FICCI). While Digital will continue to grow
it will be years before it catches on to Print or TV as far as Sir Martin India
outlook is concerned. Here is why.
Lets break digital advertising in two broad parts – crowd created
content (Social Media mainly) and business created content (News, Entertainment sites
and apps etc). Advertising happening on Social Media Platforms will be eventually negotiated
directly by the content aggregators such as Facebook, Google etc. These
platforms know only too well the perils of having a Group M mediate a deal
between the content provider and client. Group Ms of the world will be kept at
bay. Also, the biggest clients of such platforms will be people like you and me and not businesses. And the large business houses will get customisation only when dealing directly.
As far as content creators are concerned such as News and
Entertainment sites, few of these sites create original content. Most rely on
TV and Print to offer content. Versions of Print and TV find their way on
Digital media. This part of Digital therefore is not a creator of content, it
is an aggregator and disseminator of
content. If there is no Print and TV, there will be very little salable content on
Digital. Being largely free, it will be a challenge for Digital to produce original
content and be able to monetize it. If costs on Digital go up, advertisers will
start evaluating whether Digital really makes sense which as of now they are
not as it is very cheap. This is where market equilibrium will set in and allow
for all three to exist. But this equilibrium is nowhere in sight at least for
the next 10 years. Sir Martin’s investment may be too premature, therefore.
