Campaign India caught up with Jarek Ziebinski, president, Asia Pacific, Leo Burnett and the Group’s newly appointed CEO for India, Saurabh Varma, to discuss the agency’s plans for 2014, priorities, views on the planning function, ‘HumanKind’ philosophy and more. Edited excerpts:
What brings you to India?
Jarek Ziebinski (JZ): I come to India regularly. This is one of my strategic markets within Asia Pacific and India is also one of the strategic geographies for us globally. We have started a major change and we have new leadership at the agency in India. Since then I’ve been coming even more often to support Saurabh and see how the transition is moving forward.
How has the year been for the agency in India, and across Asia?
JZ: Over the last four years, we’ve been growing in pretty much every region in Asia. Every office was growing in every market. In 2010, 2011 and 2012, we had fantastic double digit growth. In some countries including India, Malaysia and Singapore, we doubled our size during that period. Even markets which were mature and stable like Japan and Australia grew during that time.
2013 has been slightly more difficult in India. We’re still growing and we are still happy with results, but the economy didn’t support the industry as much as it did previously. We’ll know the overall results of the year soon but it’s been positive for us.
We saw certain trends that we predicted, like digital being the high growth area. In India, digital growth for us is close to 47 per cent, which is tremendous. We have also seen very rapid growth in the area of activation and shopper marketing. Our strategy in this area has been that we identify pillars of growth to invest in. Digital and shopper marketing/activations were the pillars and that’s where the growth has come from.
What’s the agency’s plan for 2014?
JZ: We have aggressive and bullish plans for 2014, 2015 and 2016. I expect nothing but growth, profitable growth and progress from Saurabh. He’s a man with a lot of experience. I’ve worked with him for almost five years now as we were close partners running the region when he was CSO for Apac. He has contributed big time in solving our clients’ problems, handling strategic issues and building brands. Now it’s time for Saurabh to focus on building our own brand and business and he’s sharing with me visions and plans for the future which I appreciate, because they’re ambitious. In the next three years we’ll see the next chapter of Leo Burnett’s growth in India and hopefully we’re double our scale and strategically transform the agency.
Saurabh and I strongly believe that our future is in integration, so we are working closely together to transform the advertising agency into an integrated HumanKind communications agency. Behind this, there is a solid strategy and plan. We’re thinking how we should offer to our clients, both specialisation that they require in this very fragmented and complex world of communications, and offer integration. We’re thinking of transforming our account management into integration management. We’re thinking about rooting everything that we do in the HumanKind philosophy and approach, of which Saurabh is actually a master.
Creating the specialisations that we need and delivering them in an integrated manner to our clients is what we need and where we want to go. That’s going to be our focus.
In terms of business objectives, we want to grow; we want to double our size in the next three years in India.
It has been reported that you were being groomed for this job for four years. And you’ve said you have been looking at the P&Ls of 14 different markets. What are the key (i) priorities and (ii) concern areas in India for the agency, going into 2014?
Saurabh Varma (SV): So for us, like Jarek said, the priority is integration. We want to embrace the incredible tools we have created under HumanKind. From a structural perspective, it also means creating teams that can deliver that integrated experience. (To have) The processes that we need to make sure clients are not looking at silos or solutions that come in silos, but storytelling that flows through these channels. So, for us that is the key focus moving forward.
The integration of Indigo into Leo Burnett and HumanKind would be the key areas of priorities. The key challenge would be finding talent that helps us deliver the integrated experience. Like Jarek said, the one big focus is pushing the activation and event business we have. That’s growing brilliantly for us and tripled in the last two years for Leo Burnett. So, we have massive momentum there and we’ll be investing big time in it. At the moment, we have capabilities to deliver solutions across 700 cities. We want to go beyond that and make sure that the experience that we create is more holistic in nature. That’s where we think the big advantage for us will come from.
How many account managers really understand the disciplines of e-commerce, social media, mobile, design and shopper? They don’t. What we have created are a bunch of people who understand that but sit in a silo. But if someone is going to create a narrative across all these pillars, it requires a special breed of people who understand these channels far more effectively than we have at the moment and that’s where we think the Leo Burnett difference will come out. That’s what we refer to internally as Leo Burnett 2.0 in India.
Jarek: We see this trend developing rapidly over all markets in Asia Pacific. Our digital business is growing fast and so is our activation business. In the next 18 months, 50 per cent of our business in this region will come from non-traditional areas. That is illustrating how massive this change is.
Does that mean we’ll see more activations like Leo Burnett Sydney’s work for Coke (Coke Machine)?
SV: Absolutely. These are not empty words that we’re saying in terms of the importance of these disciplines. We’ll be sending 25 people to Cannes next year (up from one or two). We want them to experience what integrated communications really looks like and what the cutting edge of change at the moment is. Our contingent won’t only consist of creatives, but also account managers and planners. We want to make investments in to the future and that will help us create the modern creative.
JZ: This is so important because creativity remains at the core of what we do and it remains the only competitive advantage in business. We need to be a source of creativity that provides the cutting edge for clients. We have to make sure, that creativity is not reserved for the creative department only.
How do you see HumanKind being brought into operations in India? Would the work for KBC qualify as ‘HumanKind’ kind of work?
SV: I think it’s a mistake that people think HumanKind is about doing emotional work. That’s not what it is. It’s understanding of people that helps deliver business results on the ground. Like, we say, one of the things about HumanKind is that it has changed marketing forever. The old 4 Ps of marketing have gone and we believe they have been replaced with People, Purpose, Participation and Populism. So, yes, KBC is HumanKind work, but that’s because it delivers around populism.
Populism is work that is part of popular culture, which people want to talk about and share. Work that becomes part of everyday vocabulary, will ultimately lead to our success. To achieve that we need to understand human beings in a far more integrated way than we did in the past. We need to understand their behaviour not only across one channel, but many channels. That’s what HumanKind is really about.
Globally, we have something called a Human Lab. We’re creating tools and methodologies that we will be rolling out in the next year in India. That will help clients win in the market place, and that’s what the focus for us is.
JZ: Helping clients win is the key. It’s not about creating jargon. When clients come to us, they usually illustrate their business problem with sets of numbers. So we’re seeing data showing market share, etc. So our job, with the approach of HumanKind, is to look behind the numbers to see what is the behaviour of people that drives the numbers. What is the feeling, thinking and ultimate behaviour and what is driving people away from the brand or business? We focus on 4 Ps, the first being People. Clients don’t own brands, people do. We apply our creativity to come up with communication that will impact people in a supportive and positive manner for a brand.
SV: One of the things the whole industry is making a mistake in is that it still thinks of people as consumers. What consumer implies is that there’s somebody waiting at the end of a message for a transaction. Those days are gone. Our big focus is to understand people as people and not as consumers.
Let’s take the example of Altoids (a breath mint player); Altoids sales are falling. Looking at the numbers, one would think that people have stopped consuming mint altogether, but the human problem could be totally different. It could be that people have only two pockets and a lot of the people nowadays carry two mobile phones and fat wallets with lots of credit cards, so there is no place for Altoids. This is where HumanKind comes in. We want to understand the behaviour behind the numbers. Once that’s done, I can start solving it by using ideas.
JZ: As long as you think of consumers as people behind the counter, you start talking to people’s wallets rather than their hearts and brains. We want to talk to people and that requires a lot of understanding. If the brand can answer one question on why it exists in peoples’ lives, it’ll outperform other brands.
SV: We have to find purpose of brands, because they’re living and breathing things just like human beings. We need to find out the reason for their existence. Once that is achieved, we will change the way people connect with brands much better. There’s data to prove that purpose brands have done twice as well as others.
You spoke about sending planners to Cannes. Is planning as a function gaining currency in your view, across agencies and clients?
SV: I think planning in India has to evolve. I keep saying there are three kinds of planners..
One is the planners who do simple stuff. They do no homework and start with the simple and end with the simple. They’re not too effective.
The second type of planning is what I call the old school of planning. This is where a lot of planners in India still are. Here, you start by exploring the complexity and you leave it at complexity. Planners in India have taken pride in creating the complexity. So much so that they leave people with the problem and don’t help in taking the problem forward.
Then there’s level three. Here’s where the magic is... Here complexity is explored and it’s left at simplicity so that everybody can create magic with it. We need a breed of planners who will explore the complexity but reduce it to such simplicity that everybody falls in love with the idea. This is where I think the future of India is.
How has the acquisition of Indigo Consulting worked?
JZ: 2013 was the first full year of having Indigo within the Leo Burnett family in the country. Now, the challenge is how we further integrate Indigo and the capabilities they bring into the game, across all our operations in India and across our portfolio of clients. It’s been positive overall.
Tell us about Arc Worldwide: We haven’t heard much about it since Venke Sharma relocated to Indonesia. Are digital and activation still housed within that unit?
SV: We’re looking for integrated solutions. For any agency today to say that we don’t do digital means it’s in the prehistoric age. Mainline creative agencies need to have digital as part of their core offerings and that is what Leo Burnett offers. So, there was a time when you needed the role of Arc in India and that was to create digital expertise. Now, digital expertise is mainstream and that’s where the future of Leo Burnett is.
JZ: We want to create under the Leo Burnett brand, fully integrated offerings. In the way we structure ourselves, Arc played a crucial role in the past and it still exists, still does work and does have great capability. Step by step, it’ll get more integrated and closer to the core agency.
Once upon a time there was a full service agency, and that model was broken over the past 20 years. Specialist agencies have come up. Clients have a new challenge, of integrating three or four agencies to create one campaign. That is time consuming and complex, and sometimes not creating an integrated campaign. So, what we want to offer is integrated solutions.
Where do you see greater – and more immediate – opportunity? Acquiring new clients or growing revenues from existing clients? Has there been enough done, in your view, to expand on digital/experiential services offered to existing clients?
SV: I think we’ll be doing three things... The first would be not losing the current crop of clients we have. Jarek keeps saying that not losing client is growth.
Secondly, we’ll look at organic growth which will come from integration of digital and building on the activation piece we have. Number three is winning some big pieces of businesses as we go into 2014.
Beyond that we need to look at strategic investments and acquisitions.
JZ: To build on what Saurabh said, we have a very simple growth mantra in Asia Pacific. We’ve identified five things that agencies need to do to grow five times or three times as fast as the industry. If you do three out of five, you’re doing better than the industry.
We need stability once businesses are won instead of the leaky bucket scenario, where clients are lost and won in abundance.
Pitching is expensive and time consuming and it’s difficult to pitch and manage operations at the same time. We will be in the market pitching for major accounts. We won’t be pitching for every account that moves, but we will be in the market. Saurabh and his team will be out there. I’m sure we’ll convert some of them into wins.
We acquired Indigo recently and we’re out in the market looking for potential acquisitions. We will not be there just to be shopping but out there to look for strategic matches between Leo Burnett as it stands today and what it wants to be in the future.
It’s too early to say what type of an agency we’re targeting, but we can’t discuss it currently. But we are actively searching for our next acquisition target.