Low comprehension, uptake cause of slow embrace of digital media: Sandeep Goyal

17 Apr,2017

 

At 52, Sandeep Goyal has achieved what most people in the A&M business would strive to be at. Former CEO at Rediffusion Y&R, former Group CEO at Zee Entertainment, Former Chairman, Dentsu India, a jv partner of Dentsu in India and the Middle East, an investor in a dozen-odd enterprises and now Chairman of Mogae, which again has some prized partnerships. He is currently also purusing a PhD on ‘Human Brands’. Pinning down Goyal to an interview isn’t easy. Over many attempts to fix a meeting (some because of his schedule and some ours), a meeting which happened over some ‘gharkakhana’ but didn’t result in the desired Q&A, MxMIndia did manage to Sandeep Goyal to speak on Mogae, mobile and more. Excerpts:

 

As a veteran of the industry, how do you view the slow embrace of digital platforms even as the number of devices sold and being used has leapfrogged?

To me this is not surprising at all. I suppose when you refer to me as an industry veteran, you mean advertising?! Actually I have been now away from mainline advertising for well over six years. And in the interim, advertising has really not changed, or changed much.

The slow embrace of digital is simply a function of client and agency businesses being run by a generation that is too old. Thankfully, many of them have either retired or just faded out in the last few years. But the decision-making layer on both sides of the table is a pre-digital generation. In India, the dividing line is 1995 when mobiles were launched. If you were born before that, you are not born digital. You still think print and you still think TV. You don’t read your morning newspaper on the mobile. Neither do you catch all cricketing action on an app. You therefore also do not create for the mobile or think mobile first.

These are not sweeping generalisations. I have seen them first-hand. While a lot of the older guys in Indian advertising try to feign knowledge and understanding of digital and mobile, those from my generation, some even younger, struggle to make sense out of digital offerings. I have now been in digital, especially mobile, since 2005 when we setup Mogae Digital and started making Indian comics for mobile. Ever since then, my experience with fellow advertising peers has been one of low comprehension and low uptake. Reason is not just age. It is a mindset. Advertising was always about client briefs and campaigns therefrom. Concepts such as UGC (User Generated Content) or targeting using ARPU rather than SEC needed a fresh start. It never happened.

 

Captains of some large corporations like Coca-Cola and P&G have questioned the efficacy of digital… your comments?

Who am I to quarrel with such worthies? This is precisely the point I was making earlier. Captains of large corporations (and I won’t say Coca-Cola or P&G alone) are still calculating brand and communication effectiveness on parameters and metrics that are a generation too old. It is not that digital is not effective for their brands. It is that they have not tried hard enough (or long enough) to make concepts meant for a digital consumer.

Your answer lies in looking at sluggish sales for cola as a category. I am not singling them out, but perhaps some introspection on whether the brand owners are really connecting with a consumer who has either moved on in taste or in habits. Entire categories like banking, travel, commerce, even education and learning have adapted themselves to a new digital world where consumers became co-partners in the brand journey. FMCG never tried hard enough. Its digitalization remained dwarfed.

In some markets, the colas have done remarkable work. But as long as you continue to refer to such work as ‘innovations’, it will never become mainline or the new normal.

 

You have acquired Ao1 which is a personalised video platform as well Ngage, adtech platform of Nimbuzz. What are the specific growth plans for each of these?

We were already working on personalised video since 2015 when we tied up with Idomoo of Israel. But because we were dealing with CRM data, most clients wanted the servers to be located in India for regulatory compliance. With Idomoo, we were unable to that despite their product being a world leader. We had no choice but to look for indigenously developed solutions. Ao1 fitted the ask. We now have a versatile and cost economical platform that works like magic on large customer data bases allowing customisation of content and creating this entirely new category of targeted personalisation.

Today, we work across banking, insurance, travel, holidays, hotels, retail, e-commerce, in fact every category that has personalisation possibilities. Global research shows that personalisation of a message kicks up response rates by almost 86 per cent. Every one of our clients is now a repeat client. Initial hesitation has been more than overcome. Also, new experiments are being tried out every day. I think Ao1 will do well.

We never did eventually consummate the Ngage/Nimbuzz deal despite press reports to the contrary. The due diligence and the financial model did not meet satisfactory levels. We preferred not to take the deal to conclusion. We are instead fully focused on our Mozeo programmatic platform which I can discuss later in this interview.

 

Given the rapidity with which technology is changing, there is a need for continuous upgradation and bettering of service, especially in the areas of adtech and video. What are your commitment levels to both business.

On adtech, our Mozeo platform is world class. Our partners Zeotap of Germany now have a 25-strong backroom team in Bengaluru looking at customising the platform to Indian requirements. We have been running campaigns since January 2017. We are in an advanced stage of integration with most of the large digital agencies and large clients. We have created dedicated trading desks and both quantitatively and qualitatively, we are poised for large numbers in 2017.

 

Our biggest plus is that we are in the process of building up 150 million profiles on the telco data. These anonymised customer profiles make for the best targeting possibilities, far superior to FB or Google.

 

On video, I have already talked of Ao1. It is not video alone (and the recent YouTube controversy on inappropriate targeting is a good example) but personalisation of video content that will separate the winners from the losers going forward. With Ao1, we have a technology that can address an audience-of-one. This kind of precise targeting allows custom made content to be beamed to individual customers.

 

While everyone in the media agency business is talking of programmatic, the value of business done via it is minimal. Your comments?

The problem with programmatic is that not enough amount of consumer profiles are available. This naturally restricts and constricts the scope of business. As more and more of consumer profiles come into circulation, the conversion rates on programmatic will improve.

Also, programmatic worldwide is used for brand communication. In India digital buyers insist on running performance campaigns to these audiences. There is therefore a big mismatch there. The owners of the data are very hesitant to allow intrusion into the lives of customers. Performances campaigns necessitate that. So, there is a lot of learning required there between privacy and performance. We are pioneering this business. The road is tough but it leads to the right destination.

 

Talk to us more about StarStar… your launch happened with much fanfare and you have some big-name clients who have signed up?

StarStar has done well. The recent high-decibel Kotak Bank campaign for their 811 initiative was run on all CTAs with **811.

 

Our list of clients includes Star TV who ran a very successful campaign for HD a few months ago. Yes Bank uses StarStar extensively. So do SAB Miller, Discovery TV, Nerolac Paints, Axis Bank, Urban Clap, Kellogg’s, Merril Lynch and more. One of India’s largest car companies will be using StarStar soon.

 

StarStar is a disruptive idea. Yet it is a boon for creating an actionable real time customer data base. The opportunities are just beginning to open up. You will see a lot of StarStar in the days ahead.

 

We understand you are looking at investing in more digital startups. Are these all in the mobile space? Any specific direction that you are looking at?

We have a big appetite in this space. But I am not indiscriminate in making investments. Any business model predicated on advertising as the main source of revenue is largely pipe-dreaming. The reason is that discoverability of content and destinations in the digital world is a big issue. If you do not achieve critical mass, your business model remains theoretical.

Most businesses that approach us are copied ideas from the West with insufficient inputs or understanding on how this will work successfully in India. One Flipkart competing with an Amazon or one Ola competing with an Uber cannot become the flag bearers of every untested idea.

We are actually now focused on looking at distressed assets who have burnt sufficient investor funds so far to build some market visibility but now are running low on fuel. We think we can reinvent some of these businesses and take them to a new level of being able to succeed.

 

Most successful digital entrepreneurs and investors have a tech background, and can get their hands dirty on code or hardware. But you are essentially a businessperson with successes in the creative and marketing services business. Is the fact that you aren’t a techie a stumbling block to be on top of the various technology business you own and evangelise?

Yes, I am an English Literature graduate. And have 30+ years in advertising. But neither of this has prevented me from creating new and profitable digital ventures.

As I said before, we setup Mogae Digital way back 12 years ago. We pioneered comics for the mobile. We were the first guys in India to use JavaLite. I had to struggle to find developers and coders.

I setup India’s first Fantasy League when IPL launched 10 years ago. We were in the Alexa Top 100 within the first week. The Times of India group were our partners. We ran leagues for cricket, tennis, for the BSE and ran many jigs on politics, elections, the Olympics and much more. We had a team of over 200 tech guys working for us. We ran into legal complications and had to scale the business down. But while we ran the business, it was intensely profitable.

I launched www.lastminuteinventory.com in 2008. We did Rs 100 crore of business over the next 2 years, every year. We were again pioneers in the space. The contours changed when we sold out to Dentsu.

When I launched Mogae Media even the telcos did not know enough about mobile monetisation through third-party advertising. We used a lot of ingenuity and technology to mine the data and to meaningfully interpret it.

I think technology is just all in the mind. In fact those that come from a technology background struggle to find customers for their businesses. So, I wouldn’t worry too much about my Literature background. Life is about being receptive to opportunities. Technology is only a means to the end.

 

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