Mauricio Sabogal, global CEO, Kinetic Worldwide, was in Mumbai in late January. Among other things, he unveiled the WPP OOH agency’s new logo and made a ‘formal introduction’ of its new CEO for India, Suresh Balakrishna.
Campaign India caught up with the duo to learn more about the agency’s upcoming programmatic launch, how it intends to get mobile phones and billboards talking, and unlock the value of those interactions for marketers in India and abroad. Edited excerpts.
What brings you to India?
Mauricio Sabogal (MS): I’m here to introduce a man (Suresh Balakrishna), who actually doesn’t need any introduction as the CEO of Kinetic India. So, I’m here because of protocol. He’s well recognised in the market. He’s a friend of mine, we worked together in IPG. When we needed a person here, the first person I thought of was Suresh. He has excellent credentials and is well reputed in the industry.
We’ve sat down and discussed the evolution of Kinetic India and the launch of new products. We’re looking at redefining the scope of OOH. I’ve also met the heads of WPP and GroupM in India and some clients too.
Suresh, you’ve taken over only two weeks ago, but what are your key goals and how do you plan to achieve it?
Suresh Balakrishna (SB): It’s still early days. After I joined, the first thing I attended was the global strategy meet in New York, and we’ve just come back from there.
We are aligning our plans with the global plans for 2016. In a nutshell, we’re looking at a few areas.
One is product development. That means investing more in data, analytics and research. That’s going to be a major area for us.
Also, obviously, we hope to organise the industry more. Being the largest OOH agency in the industry, I think it’s important for us to do that. It’s easy to say that the industry isn’t organised, but we have to drive it. I want to lead that step. The IOAA is putting together some rules, and we’ll drive that a little more.
These are the two things that are top of mind.
How big is the India office in terms of size? Also where would it rank among the top global offices of the agency?
MS: India is number five in the world. We have 1,000 people globally.
SB: India has around 170 of these.
MS: In terms of people, the man power required shows how big and complex this market is. For us and WPP, India is very important as a market. The top four offices are UK, China, Germany and USA.
GroupM's TYNY report shows all media except magazines registering positive ad revenue growth in 2016. It foresees OOH ad revenue growing 5.8 pc in 2016 in India, up from 4 pc in 2015. This is the slowest rate, among all growing media, and includes digital OOH. OOH will account for 4.7 pc of all ad media revenue earned in 2016, down from its 5.1 pc share in 2015. Do you agree with this figure? If yes, what are the factors, if any, that explain the relatively slower growth of the medium?
SB: The problem with that is, how do you define OOH? As far as the conventional definition of OOH goes, maybe 5.86 is the number. I’m not arguing with that. But the definition of OOH is evolving day-by-day. (Pointing towards a mobile phone) Is this outside the home? You use it everywhere. Apart from TV and the newspaper that is delivered to your house, everything is OOH.
This is how Kinetic looks at it.
MS: It depends how things are defined. There are similar arguments with video and television. OOH is being redefined. The last time I came here, I was saying that the vision for Kinetic is to move OOH to the centre of media planning. To add to Suresh’s point, yes everything other than TV is OOH today. What is very important is how we create interaction between the mobile phone and billboards. How that interaction allows us to be more efficient than mobile or digital alone is what we want to do, because that interaction is priceless for the advertisers.
In mid-2015, you said Kinetic accounts for 10 pc of the global OOH buying of $45 bn, and India for 10 pc of Kinetic's business? How do the numbers look at the end of 2015?
MS: We are the biggest OOH specialists worldwide, and we continue holding that percentage now too.
You announced a programmatic model for OOH buying last year, expected to kick off in Q1 of 2016. How has that progressed?
MS: We are on track. We are scheduled to launch our programmatic model first in the US and UK by the second quarter of the year.
The big challenge in terms of programmatic in OOH is that we can’t use the same platforms we use in digital. We have to add place (physical and human characteristics) into consideration. Location is detected by the phone, but place isn’t. So it’s taking a bit more creativity and should launch by Q2.
There are six specialist services under Kinetic... How much does each contribute?
MS: We have some special units. We have Aviator, too, which is our travel unit. It’s targeting travelers instead of just targeting airports. We are targeting a person right from the time the person leaves the house, till the person arrives back. We have synergies with our sister company, tenthavenue, which helps us with in-flight advertising. We have shopper and health advertising divisions too.
We are implementing this (traveler tracking) in India. The office in India is receiving the training to work it. It’s called Apex. It has data of all gates at all airports with anticipation of six months. We know for instance, where the flight from Mumbai to New York will arrive at the JFK airport and that allows us to plan how to advertise. We can change languages of ads based on flight arrival. We know how carriers have different type of passengers. That’s important for us.
We are currently developing our sports division to target fans. This has currently opened in a small capacity in Argentina and we want to expand to other markets soon.
SB: The brand Aviator hasn’t launched in India, but all the tools it uses are available here. We are using it for our airport clients here.
How many of these specialist units are present in India?
SB: Kinetic Active, is very active in India. It’s our creative solutions unit. It’s there across most of the international markets Kinetic is present in. Today, when it comes to OOH, clients expect a full solution from the agency. They don’t just expect a billboard plan from us. They expect the creative rendition too because for some reason this doesn’t excite creative agencies, and that’s good for us. We’re also doing a lot of creative solutions for clients. Clients don’t give us a brief for OOH, they ask us for solutions. Active does this.
We also have Kinetic Futures in India. It’s been developed by Marucio. It’s picking up talent below the age of 30. We have a board of nine leaders from across the world, and one of them is from India. They try to predict/show us future sources of revenue for Kinetic. It also has a focus on CSR. Kinetic believes hugely in CSR. The whole junior team is busy doing this.
MS: In fact, we just met with WPP’s new CSR unit in India this morning. We were talking about creating synergies between what we are doing globally and how to bring it here. That’s very important for us.
We are starting a programme through which we want to recycle all the material we are using in our advertising in order to help the planet.
You spoke about creative agencies ignoring OOH, but those type of agencies, and even media and digital, end up dominating the category when it comes to award shows…
SB: Not that I want to put the responsibility on the organisers of the creative awards... But when a creative solution is presented, it’s the creative solution that gets the award. The solution is the amalgamation of a great idea, execution and the creative itself. Who owns this solution is usually the debate between creative agencies and OOH agencies. Sometimes, it could be that the creative is from the creative agency, but the solution is from an OOH agency. So, then who deserves the award?
We believe that if it is a creative award for creative solutions, then the award belongs to the agency that created the creative solution.
MS: When you see the awards, 80 to 90 per cent of them consist of OOH as a solution. So, that’s a great potential for innovation, for creativity. Creative agencies need to take this beyond the awards and work on a strategy to benefit the advertiser. Sometimes there’s an opinion that those awards are just awards and are not necessary serious campaigns that are running. That’s the same situation in CSR too. People create CSR activities, because they want to enter them into awards (Cannes), but after that nothing happens. We have to be consistent.
How big an issue is measurement? How does the scenario in India compare with more evolved OOH advertising markets?
MS: I think that there is no lack of measurement, but there is a lack of agreement. It’s about how to measure. We have tonnes of data today, with different sources that are providing information about population. With cell phone information we can see how people move, how they behave while they’re on the go. So, that gives us plenty of information to create tracking for our system.
The big issue is that there’s no unanimous methodology across markets and companies. Big data is huge.
When you are sitting with other companies, there’s no agreement, not even between media partners on how to use the data to measure. There are old fashioned methodologies, and they’re being redefined, with sources like social media and mobile phones. We also have our partner, who is installing cell phone antennae behind billboards. That helps us get data on how people move and interact with the billboards.
We launched this last week with a partnership with a Dutch company that allows us to make billboards, even static ones, interact with cell phones. That’s also a possibility to measure audience. We’re trying to make that system standard across markets because that gives us a unanimous measurement for the system.
SB: In India, today, luckily we are having a lot of surrogate measures like social media. We’re soon going to launch an app which will make all billboards interactive. There’s a lot of measurement that’s coming into the industry, but how much of it will be used to justify the investment on OOH remains to be seen. We’ll have these discussions with partners and clients. We’ve made progress, from zero to probably 10.
Has Kinetic explored the space of media rights / ownership in any markets? Is there scope for this in India?
MS: Not as Kinetic, but as tenthavenue, which is our holding company. We have some divisions, which work as different companies, but have media rights and ownerships. They are totally separate because of WPP’s business model. We don’t have any in India.
Isn't it fact that most OOH in India is static? What would the split be, in terms of revenue, between static and digital OOH? How do you see this changing in India?
SB: A large percentage of OOH in India is static. But, how would you define a lenticular poster in a mall? It’s not static. All mall activations technically fall under OOH. Nine times out of 10 they’re being activated by an OOH agency too. So it is specifically OOH.
We don’t have enough digital screens in India, but that has nothing to do with the capability of the agency; it has to do with the law enforcement authorities. If we get permission, we can convert 25 per cent of the billboards to digital in Mumbai by tomorrow. It takes nothing because technology is available easily within our country.
MS: In fact, I have to add, that there are some multinational providers who are based in India.
SB: It’s a question of change of law in a State, and the rest will follow. It’s bound to happen and I think it’ll happen soon in closed environments like airports with digital screens.
MS: We want to make static billboards interact with mobiles. It’s happening in some markets. We want to make this happen across markets.
You have spoken about the drone-advertising efforts, in partnership with a Philadelphia-based company. How has that taken off?
MS: Yes, the guys in Germany have worked on a couple of cases with them. Some clients are staying away because of the news that drones are invasive. It’s more about creativity to use the drones than availability.
(This article first appeared in the 5 February 2016 issue of Campaign India)