8 months ago| article
Mindshare’s Dominic Proctor in conversation with Campaign India’s Bindu Nair Maitra on margins, agency profitability and procurement, among other things.
Feb 28, 2011 11:31:00 AM | Video | Bindu Nair Maitra Share -
“The pressure on compensation has been huge across all markets. Ultimately, it is the market that decides how much we get paid, it’s a free market,” says Mindshare’s worldwide CEO Dominic Proctor during a conversation with Campaign India.
He was responding to a question on whether he believed media agencies were being rightfully compensated for their services.
“Service companies like ours get compensated for what they are worth, and the market is very competitive,” he added.
So has price become the pre-eminent factor in clients choosing media agencies today?
Proctor definitely believes it is so, but says he understands the compulsions behind that decision.
“When clients' own businesses are in such difficult times, there will be more focus on cost and we understand that and we have to react accordingly. So yes, price is very important, still is and always will be. It’s not taken for granted. If you are competitive on pricing then you have the confidence from the client to introduce other services, other scope of work. If you are not good on pricing, then you don't have the right to bring all the other things to the clients' benefit,” he adds.
On the balance that media agencies today have to maintain when dealing with a big win/loss in terms of the manpower that they employ, Proctor responded, “You try and win more than you lose. Luckily, Mindshare has managed to win more than they have lost. In any agency it is really about momentum and having a winning momentum is very important. What you cannot do, if you lose a business, is to keep the same level of cost structure that you had before.Agency profitability levels are not high and they don't allow you to carry surplus cost structures between losing an account and winning the next one. It is tough,” he admitted.
On the way forward for Mindshare India, Proctor said, “Our plan is to broaden the business horizontally, introduce new products and services to bring to clients. That’s going to be as important as growing the billing number here in India. We have to continue to bring new parts of our service offering to clients.”