Raahil Chopra
Feb 28, 2014

‘Digital isn’t going to stop because ultimately it empowers consumers’

Q&A with Razorfish's Michael Karg, Vincent Digonnet and Nikhil Sarup

‘Digital isn’t going to stop because ultimately it empowers consumers’

In April 2014, Publicis Groupe’s Razorfish completes a year in India. The company's international CEO Michael Karg,and the executive chairman of Apac Vincent Digonnet, were in India earlier this week. We caught up with the duo andNikhil Sarup, senior VP-strategy, Razorfish India, to find out how the year has been, plans for the second year, challenges and opportunities. Edited excerpts:

You’ll be completing a year in India in April. How’s the ride been?

Vincent Digonnet (VD): It's been a very good journey. We have fully functional operations in the country now with a strong technology backbone. We have combined technology with strategy, creative and marketing capability to scale. Technology platform development for rest of the world is now based out of India. And we have been able to scale our ability to develop better solutions for our clients in India. We have got 400 people across our offices in New Delhi, Bengaluru, Mumbai and Pune.

Our plan in India is to be leading business transformation through technology and change it from advertising to response design - taking brands from advertising into services. The one thing digital is bringing in but has not been recognised yet is that it's bringing the death of advertising. Media (by itself) is worth nothing now and it’s about content, platform development and use of big data.

From where do you target growth for the second year?

VD: Mobile is going to become the key driver of everything. And nobody wants to see an ad on the medium. If you look at what’s happening in China at the moment, the big traction isn’t through advertising but through building services and platforms likeentertainment. In three years, WeChat has got 500 million subscribers. People are using the platform to open bank accounts as well!

Michael Karg (MK): In the early stages, Facebook brought on a lot of advertising and media executives as a part of its staff, but then realised consumers don’t really like that. Now, the Whatsapp acquisition is very important and I don’t agree with the perception that they overpaid. The big gamble is that if they do it right, it’s the end of advertising as we know it. Messaging is now a dominant platform and there’s no question about it. The most time people spend today is on a messaging platform and you have to look to own it. You build brand utilities and drive commerce on those platforms and that converts to sales - it’s no more about media or advertising. The one who owns the messaging platform owns the entire experience. Over time, there’ll be no role left for the media agency.

What is the future of digital content? Who is best placed to create it?

MB: It’s a talent question. Digital is moving really fast. Companies that work with different brands will be the ones to create content.And that’s why agencies - not in the traditional sense, but the service providers, or consultancies that provide services - will be very important.

Razorfish is an agency that looks to deliver creativity and technology. What's more important in a market like India where there could be instances of a lack of technology to match the creative idea?

MK: I think there are three things. Media, in terms of what the context is, is also extremely important along with creativity and technology.

To answer your question, it’s a case of one feeding the other. I would say the idea starts first and then translates into new technology or evolution of existing technology. So basically an idea is no longer just a concept that you’re going to put on a billboard or in a TVC.

The difference now is that if somebody has an insight about the consumer and an idea which is a consumer need, technology has become more accessible and cheaper. That’s why India is very important for us because we can develop products and services at scale and very cost effectively. Things like the Uber (car rental) application wasn’t possible before because technology wasn’t available.

It is no longer about communicating through advertising messages but by bringing value. Nobody wants to hear these advertising messages because information is provided everywhere. People can go on Google and check everything and are getting savvy about it.

NS: The phone has become the third item for a man - wallet, watch and phones. It’s a very personal device and you can’t provide promos on the phone. A lot of brands say they are doing a brand engagement, but it really is a promotion. Most of them are not services. Another service is bookmyshow, which users don’t need an advertisement to download. So brands need to launch a service and through that, be in it for the long term.

OgilvyOne recently appointed a chief data officer. Is Razorfish looking to hire one?

VD: We don’t have a chief data officer, but we have a lot of data analysts and data capabilities. Data is at the centre of everything now.

Earlier, technology was so complicated that the CIO was the king. Now thanks to Oracle or Adobe and others, technology has been made accessible to everyone. Marketing managers have platforms to drive marketing from their computers in a way that couldn’t be done before. Most of the innovation will now be on the collection of data, aggregation of data to get to something that is useable.

How evolved are clients across markets when it comes to viewing digital as an element outside the advertising bouquet?

MK: Many clients still look at digital as an element of an advertising campaign. This is unfortunately a very wrong perspective because digital is a lifestyle. What would we do if we didn’t have digital devices now? So, I think digital technology changes every single industry, enterprise and society. What we are trying to do is to look at the space and see how digital is changing society and value chains. It started with the changing of the music industry. People thought that was it. But it went on to change the entertainment, publishing, automotive and retail industries.

And digital isn’t going to stop because ultimately it empowers consumers. There’s no way a brand can counter this development so you have to anticipate what’s happening and that’s the most exciting part of our job.

We launched a fully digital showroom for an automobile manufacturer without any car in the showroom and people are buying higher spec, more expensive cars, without test driving them. We created the Audi City in London, Beijing and Dubai. It works on the insight that ultimately luxury car companies are lifestyle brands and you don’t want to drive to some sleazy car dealership to get talked in tobuying the car you don’t want.

NS: There should be no digital campaigns - there should be initiatives or experiences and that’s the thought that we have. The brief cannot come from a client that they’ve got a campaign coming up and if we can do some banner ads. That will happen, but we are talking to clients in India who are saying, ‘Forget my ad campaigns, show me a road map which is not just an excel chart. How can you improve my relationships? What experience can I give to people?’

Razorfish India recently tied up with Adobe to provide more personalised digital solutions to consumers and brands in India. How will this partnership work?

VD: We’re not an advertising agency but into business transformation. Adobe is a platform that allows companies to transform the way they operate. We want to get in at that point and help them, before managing the marketing and helping them connect with creative solutions to engage consumers. So, it’s a total breakdown of a traditional model of getting into a business. We don’t want to compete with advertising agencies in pitches.

What are the challenges in India? Is talent one of them?

VD: Talent could be a challenge in other markets but not in India. The challenge in India is that the intelligence and technology capability is way beyond what the market can absorb at the moment. Talented people in India work across the world. So the challenge in India is to get the domestic market to a level where it can absorb the same intelligence they’re creating for others.

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