Campaign India Team
May 22, 2013

VIDEO: ‘The easy part of an acquisition is the deal and the press release’: Mark Patterson, CEO, GroupM Asia Pacific

Patterson moved from media sales to an agency in London (Ogilvy) in 1998, at half his salary. He explains why media agencies could do with more talent from media owners, GroupM’s digital push, an integrated client-facing model, and more, in conversation with Campaign India.

Patterson’s now spent over a decade in Asia, where he moved to as CEO for Mindshare Japan in 2000. Since 2008, he’s donned the hat of CEO, GroupM Asia Pacific. In conversation with Campaign India, Patterson opens up on GroupM’s growth in the region, the rise of digital in different markets, the beauty of Asia’s diversity and its ‘can do’ spirit, GroupM's ‘relentless’ focus on talent with the view to leading the change, what keeps him going – and what keeps him awake. Edited excerpts:

You’ve been in Asia for a while. How have you seen the media business evolve in the region?

I came into the region in 2000; landed in Tokyo straight from London to join Mindshare. I came into the North (of Asia) and sort of worked my way through the region over the years. More by luck than judgement, I came at a perfect time as Asia was awakening. The story of Asia over the last decade, across many markets, has been extraordinary.

I have been fortunate enough to be at the right place at the right time. I’ve been fortunate enough to see markets emerge, grow and mature at different paces. One of the joys of being in the region is the relentless change. And the diversity.

Even as technology is reshaping peoples’ lives in real time, we see how technology adoption and digital marketing and communication have grown and developed at different paces in different markets – at light speed in some and at sort of glacial speed in others. That has again added a new dimension.

When I started, we were a single agency business. It was Mindshare and it was three years old. Now it’s 16 years since Mindshare started. And today we are, through acquisition, organic growth and hard work, a huge business, a complex business, with four global agency brands and a broad range of integrated specialist services at a regional and local level.

Our product has developed beyond recognition. If you look at a pitch document for a client today versus three years ago (or six years ago), you’d think those are from three completely different companies.

One of the pleasures of my job is that while my title has remained the same for four years, each year I seem to be doing 50 per cent new stuff. It doesn’t feel like it’s the same job. It’s changing and developing at that sort of pace – be it the product or agency or client-related or geography-related. And obviously, you have the turnover of senior talent.

This diversity, pace of change, energy, and most importantly that spirit that you find in Asia that you don’t find in the West – that way of working, that attitude of ‘can do’, permeates right across the region. So while I say there is diversity, there is commonality in some areas. What I have learnt is that you have to be very careful generalising about Asia-Pacific, because of the diversity.

Tell us about the growth of the audience buying unit Xaxis in the region...

We launched the audience buying unit in Australia in 2011. We felt that was the best market to pilot it in. One could argue that it is a more mature and developed digital market, with strong digital and trading expertise. We were able to bring in the right talent from the publishing side. We got off to a flying start.

The plan was always to roll out rapidly. Eighteen or 19 months since launch in Australia, we are now in nine markets, most recently in Thailand, Taiwan, Hong Kong and China, delivering high value targeted audience to clients on mobile, on video and on display. We’ve invested in the right talent. Our clients have seen the value. We’ve communicated the proposition to them openly. It’s required different types of commercial conversations. And we’re really pleased with the progress.

In India, we spent time last year planning, getting the right structure and explaining the product, to ourselves primarily - you have to get the team on board in the business so that they understand what the benefit is, and then communicate and sell that benefit to clients. It’s been an active task in the last few months and accomplished very successfully.

A majority of clients see the value that we deliver. The value is benchmark-able. We found that we now create products that didn’t exist in the market, whether they are tailored products, premium products, audience-related or genre-related products. And there’s a market for it. Publishers have come to the table and worked with us; they’re obviously a part of the opportunity.

How are the four agency brands – Mindshare, Mediacom, MEC and Maxus - faring in the region?

When we started, Mindshare was the biggest everywhere. It still is big. One metric is size, but if you look at it closely, they (four agency brands) all have quite different profiles.

Mediacom is very strong in Australia and is our largest agency there. Maxus’ strongest market in terms of share would be India. MEC is the strongest in Taiwan. There’s a slightly different profile for each agency; partly client-based and partly by history. The reality is they all have different scale in different markets. What is common is that they operate as a joined up network. There’s capability everywhere, all backed by GroupM. So even if one of the agencies in a market might what on ground be termed much smaller, it still has the power and back up of GroupM.

It’s been a good model for us. It can be cyclical in terms of the health and vitality and momentum of any one agency, and we’re aware of that.

There have been conversations around the need for an integrated client-facing model. Even a lot of talent is coming from creative agencies to the media agency side... What are your views?

As far as we are concerned, we deliver an integrated, client-facing model and that has always been our ambition.

Look at digital, where you are required to deliver end-to-end. With the capability of Quasar or Madhouse or any of our entities, we are able to deliver an integrated full-service digital solution. Through Dialogue Factory, we can deliver end-to-end strategy to execution in experiential marketing. So we’re full service in quite a lot of areas. Our strategy is to advise on a holistic marketing communications strategy, with the ability to implement in all of those areas. We manage a majority of that implementation in-house, but there may be things we get implemented from outside.

We don’t have an ambition to build a creative department with copywriters and art directors sitting in big offices and producing beautiful 30-second pieces of film. Where we’ve taken a view to producing video content is through our creation of Mash Up, which is producing - on an industrial scale - high-value, sustained-engagement video content. The business has moved on. So we’re continually looking to provide full service solutions but not in the old definition of ‘full service’. We’ll never go that way.

Could you explain the growth of ‘digital’ in the region?

One metric would be by proportion of our revenue from what we define as digital. We have markets like Japan and Korea where 40 per cent of our business is digital. And then we have emerging markets where it would be at low single digits like Vietnam and Philippines. India is at double digits in terms of revenue from digital. Australia behaves like a developed market with 20 to 25 per cent revenues from digital.

We still feel every market has potential to grow; we’re not satisfied with the level of digital share. We set ourselves quite high benchmarks in terms of capability of work. One of the things CVL (Srinivas) is doing in his role very, very quickly is focusing on accelerating digital development. We’re good, but we got to be great. We’ve got to be ahead of the pack.

India is becoming even more competitive in that area. We see a lot of acquisition - acquisition noise - in the last few months. This is WPP talking; we are a very acquisitive company...

But we’ve not seen much ‘noise’ or news from WPP on acquisitions in India...

We’ve brought in Quasar, we’ve done a JV with Madhouse, a strategic alliance with Mash Up. That’s three in the last few months.

May be we’ve already been through that phase; we already have scale. One of the things we have learnt - and I have learnt in particular while looking around the region - is that the easy part of an acquisition is the deal and the press release. The really, really hard part is integration of those businesses successfully.

Generally, in digital acquisitions, you are acquiring companies that have small businesses built around some key individuals with strong, independent cultures. You’ve then got to marry them with corporate cultures.  We’ve learnt to focus on the integration plan and make that work. Everybody likes to shout about acquiring X, Y and Z. What’s more important is what happens a year later.

Campaign India

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