Clients are happy to pay wherever one demonstrates value

13 Nov,2018

 

It’s been a year since GroupM merged its two leading media agency networks – Maxus and MEC. We spoke with Kartik Sharma, CEO-South Asia of the merged entity called Wavemaker on how the business has been in the past year, the credo of ‘Rapid Growth Planning’, winning awards, talent and more. Excerpts from Part Two of an interview with Kartik Sharma… (Part One of the interview can be accessed at http://www.mxmindia.com/2018/11/we-cant-sit-on-past-laurels/)

 

One of the challenges in attracting young talent specially at the entry level is the low salary levels in media agencies.

We relooked at how we attract talent. This is not just about Wavemaker, but we worked with the GroupM leadership team and the composition revisions have already happened. Also, my genuine belief is that while people may talk about compensation, the real reasons why people stick is obviously due to the people they work with. Second thing is if you have a great purpose. It’s easy to rationalise and say I don’t get money and move out of an organisation. Also when you go deep and we sit in exit interviews and we find out that people largely leave for two reasons. Either you have a lousy boss or you are not able to connect with a purpose or not able to see a purpose of what you are doing. As long as you are able to address these two factors well, I think people want to stick much, much longer.

 

In the light of the various changes in the media landscape, digital gaining ground and as we enter the new year, do you see a dramatic shift in the way the media agency business is going to be? Also, will be there be a change in the current commissions-/fee-based structures

See the way the compensation structures were done, because commission-based compensation structure was actually invented more than 100 years ago. Agencies or as they were called agents and we started selling it. But markets are maturing, clients are maturing. Agencies are maturing. I can’t talk for the entire industry but surely wherever one can clearly demonstrate value, clients are happy to pay. Wherever you cannot show value, why should the customer pay?  So there have been many, many instances where we are able to get our fair share based on the work that we produce which often is loosely termed that we are more costly. But its value, the value creation for the business is demonstrated and that job is on us to show and demonstrate why we are asking for whatever compensation. It’s not easy but in many, many instances those are happening even today.

 

So, would you be able to give an indicator on what is the kind of increase that you get from your existing clients in terms of percentage?

It increases when we are able to show value.  I can’t speculate any number. I can’t share anything else…

 

Broadly. Are the big clients paying you more?

Big clients see value and they pay more. Even small clients. Big or small is not the point. We have been able to ask for a reasonable compensation which when compared to many other competitors would be higher. It’s a guess. If and whenever we are given that kind of feedback based on that we deliver. Whenever there is value, clients will pay.

 

You were among the early players looking at startups and looking at non-legacy businesses. But now you have grown as an agency.  Do you find that you are still as hungry for those start-up kind of clients?

Absolutely. We have recently conducted a startup connect in Bengaluru where we invited a couple of good startups which we believed in. We invited some of our media partners and creative partners what they are seeking is kind of, if they were to launch their product and services in the market, what should they be doing. It was an experimental project and has done exceedingly well for us. Some clients are signing up. Once that is done we will announce the name. Some other startups have also started talking to us so I think the hunger to be in that space is very high.

What startups do is they kind of come with a very different point of view compared to the larger, well-established players. They want growth faster. They want to look at the product and services differently and it challenges us. Recently we have got one very big startup. We will announce once the contract is closed. Our solutions have been so different! Had we not pitched for that business. We have to constantly think that maybe what we could have done different or a standard mode is not what is going to work. It helps us to also think afresh. The solution of the client is very important.

 

I know it’s an integrated agency now… but how is the MEC part of the business doing?

All the clients are doing very well as brands and as categories most of them are doing very well. For eg., Netflix is a case in point. There are other clients. Eureka was an MEC relationship which we have. Today it doesn’t matter if it is Maxus or MEC, it’s a client we are working or. Whatever we have promised to a client we have to deliver on that. Overall, I think all the business that have come from NEC they are all in good space.

 

As you go forward to the next year, any specific target or sentiments that you would like us to look at.

I’m an eternal optimist. I think next year will have its own set of challenges and opportunities. What I am seeing is more use of technology and technology-based solutions. It could be in the area of analytics and actually creating new technologies for clients. That’s broadly where it is. Of course all the traditional media business or use of media will continue but there are many opportunities in the way that we use technology where I am seeing early trends.

 

 

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