Sohail Ansar, Executive Director, GroupM, Pakistan, on the dominance of TV and potential of digital.
AURORA: There have been rumours that WPP may be appointing an overall head in Pakistan. Is this a possibility?
SOHAIL ANSAR: There were discussions about this in the context of Pakistan, and my opinion was that if WPP want to have that kind of position, then they must give the person in that position the power to make certain calls. WPP has in the past experimented with a single person heading all WPP companies in a market but it didn’t work out. They are experimenting with the role, if I am correct, in China and Indonesia. So far, their business model has been to not have a single WPP head; this is the way they are structured – the various companies are independent and there is no central head other than Sir Martin Sorrell.
A: Then why are they experimenting again in a couple of countries?
SA: There is no one right way of conducting a business and if someone makes a case for doing things differently... it’s like test marketing a brand; try out the idea in a couple of countries. Business is never black and white and with an alternative route there are always pros and cons, and this is why you use the word ‘experiment’ to see whether that model works or not.
A: To what do you attribute the fact that today WPP is the multinational marketing communications company with the largest footprint in Pakistan?
SA: There isn’t another company that has such a large equity stake in Pakistan – the others have affiliations – and that makes all the difference; it becomes a game changer. If I have a stake in a company and invest my resources in buying shares, I am going to be much more involved than if I simply were to let a company use my name and take a percentage of the profits.
A: Why haven’t other similar conglomerates followed suit?
SA: WPP is a global market leader and our number two competitor, even globally, is nowhere near WPP. As far as Pakistan is concerned, firstly they were the first movers and they had that advantage and secondly they believe in Pakistan more than other groups do. Pakistan has been through challenging times and the other multinationals have shied away from investing here. WPP invested in GroupM Pakistan in 2003, which was post 9/11 and they increased their investment over successive years. Of course, at the end of the day, it is about business and I think GroupM has done quite well and this has encouraged WPP to invest in other companies.
"WPP believed in Pakistan more than the other groups and they have been rewarded by investing in Pakistan."
A: GroupM is made up of four media agencies, three of which are operating in Pakistan; there is now talk that MediaCom may also open in Pakistan. Is this likely?
SA: I am not sure when MediaCom will come to Pakistan, but if they do it will be for two reasons. Firstly, because of competitive reasons, GroupM is structured in such a way that in the event of a potential conflict of interest, we have the capability to bring in a second, third and then a fourth agency. Secondly, some global clients are aligned with certain agencies, so it is possible that at some point in time, we may have an affiliation with a MediaCom client, and in that scenario a MediaCom presence in Pakistan would lead to better coordination because of the global relationship.
A: To survive don’t all these separate media entities have to compete for local business as well?
SA: Absolutely; when you target a business it has to be a combination of global and local clients. Obviously, it depends on the size of the market and the potential.
A: Relatively speaking Pakistan is a rather small market, so when it comes to local clients how can four media agencies survive without undercutting one another? SA: This where the role of the COO of GroupM comes in. He or she has the macro picture. All the media agencies report to the COO, who makes the call relative to local business, based on a number of reasons. For example, it could be because one media agency is better placed to service a client out of Islamabad, because the cost base is lower there. Or an agency is under bigger profit-and-loss pressure, so you decide that a particular business will go to that agency. It is essentially a matter of pros and cons. The con is that a fourth agency is competing for the same business and the pro is that it makes it easier to acquire global clients because they are globally affiliated with that fourth agency.
A: In terms of media, would it be right to assume that things continue as they are, with TV as the overwhelmingly dominant medium?
SA: TV still dominates, but at the end of the day, you need to have vision and project the future. Digital is now a big growth area everywhere in the world.
"Pakistan is virtually the only country within Asia Pacific, and most parts of the world, where digital is very small, although having said that, mobile penetration is now big."
So, it is a matter of time before digital grows to a more significant level in Pakistan. According to WPP stats, in Australia, China and Singapore, digital already accounts for 20% of Adex. Even in smaller markets (in terms of the pie), like India, the Adex for digital is seven or eight percent. Pakistan is the only country where digital is very small. However, this will change and we need to start investing in the future. Yes, TV still dominates but three to five years down the road the ratio will change, although TV will remain dominant.
A: On what basis do you foresee these changes; will they be purely audience driven or will other factors kick in?
SA: Obviously we have to keep looking at how to target consumers in the most effective way. Digital in Pakistan has grown tremendously on the mobile platform and the potential to target consumers on that platform has yet to be fully exploited. As advertisers become more digital savvy, they will discover better ways of targeting consumers. The way you can target consumers through digital is phenomenal; especially if you think of what you can do with location based marketing.
Furthermore, although every medium has a certain wastage factor, digital is very focused and you can gauge the effectiveness of a digital campaign more efficiently than you can with any other medium. It is rare that a product will be strong in every market in the country and it is difficult to target weak areas through TV or most other media, but you can do this with digital in a very focused and cost effective way, and also know what response you are getting. Having said this, we are still learning about digital and we need to know how to do it better, but it will happen, it is only a matter of time.
A: Doesn’t digital involve a change of mindset? Doing this kind of focused and targeted marketing means being on the ball 24/7; it no longer a nine to five job.
SA: This kind of environmental change is happening not only in digital, it is happening across media and across the corporate world. The world has become extremely demanding; nothing is nine to five anymore. People have to tune into this. They will feel the pressure, but these are the market forces they have to deal with in an extremely competitive world.
A: How do OOH and radio figure in the overall Adex?
SA: They account for a relatively smaller portion. The biggest problem here is measurability. Today’s world is very number focused; advertisers want to know what the returns are and the minute they know what they are getting in return there will be a higher Adex on these media. Every media has its pros and cons, and sometimes TV does not fit the bill. The issue is that you have to be clear about what you want to achieve.
"There is so much wastage in this market, because people spend X amount on a certain medium because everybody else is also spending on that medium."
This is because there is lack of clarity on what they want to achieve; they are doing it more because it is the done thing. Having said this, at the end of the day measurability and transparency is the challenge for those mediums.
A: What about print?
SA: Print in many parts of the world has synergy with digital. In Pakistan there is a literacy issue as well as a habit issue, people are reading less and watching more. The print media have to help themselves. It is such a competitive world they have to make their case and find a niche where they can do a better job than any other medium.
A: From a media agency perspective, how satisfied are you with the performance of the people
SA: What I will say on this topic is that it is critical that the stakeholders resolve the issue of having a joint industry body. There has to be an overseeing body which can act as the custodian of this project and say we are happy with this aspect and but not happy with that one; we want to expand here and not there, we need the data like this and not like that; this is the audit we need and this is the party who should do it. We need to crack this. It is sad that for the last 10 to 15 years we have not managed to do so. It is a matter of getting our act together and there are a few fundamentals that need to be in place to make this a success and one of those fundamentals is a joint industry body.
A: The joint industry body would consist of which entities?
SA: The PBA (Pakistan Broadcasters Authority), PAS (Pakistan Advertisers Society) and maybe representation from other media; but mostly from PBA and PAS.
A: What is preventing the establishment of such a body?
SA: I have no idea. I will be very honest; we did try to get involved, but it became so political that we pulled back.
A: Would cost be an issue; in most other countries it is the TV networks that finance TAM systems, while here the burden falls on the advertisers – therefore the resistance to a joint industry body?
SA: It may be an issue, but given the amount of money we spend on TV advertising, it would be surprising if people were not willing to foot the bill, because at the end of the day what people meters are supposed to do is tell us whether or not we are spending the money in the right area.
A: How do you foresee Adex growth this year?
SA: Still growing, although growth is slowing down. One big segment to have slowed down is the cellular market, especially compared to a few years ago, and because of this the market has slowed down as well. I think from double digit growth, this year it will be single digit growth.
A: Where will the growth come from?
SA: FMCG are again on a growth path. Then there are some service sectors; real estate and financial services to a certain extent. Certainly FMCGs, although obviously that category is relatively more mature compared to what cellular was a few years ago, which was why they were growing at such a ridiculous rate.
A: There are large numbers of small businesses, which although do promote their products, have yet to become mainstream advertisers. Do you foresee any change there?
SA: I will reply to this from the perspective of a small advertiser and not a media agency. As a small advertiser I would start with what I want to achieve, set my objective and then decide which media I need to use. As a small advertiser, I may not opt for TV, because there is no point spending just for the sake of spending and even if I were to go for TV, I may pick a regional channel, but then my whole marketing strategy has to be aligned with my media spend. In fact, media comes last; it has to follow the marketing strategy. Sustainability is the name of the game. There is a concept known as minimum media weights in advertising, whereby X amount is the minimum required to go on air and get a certain desired response and if your budget is below that threshold, you are wasting your money.
Sohail Ansar was in conversation with Mariam Ali Baig. For feedback, email firstname.lastname@example.org