AURORA: How did someone with a background in manufacturing, automotive and entertainment end up running a communications group?
ALI MANDVIWALLA: I have an educational background in marketing and I come from a family business involved in manufacturing, automotive, and of course, entertainment – we grew up with the cinema industry. So managing businesses has been a core strength, and at a certain point there was a discussion which led me to enter this field. It has been an interesting journey so far. Running Synergy would not have been possible had I not had experience running those other businesses.
A: How did that experience help you?
#### COO, Synergy Group, speaks to Aurora about his recent affiliation with Carat and the ups and downs of running a business in times of economic uncertainty.
AM: It has a lot to do with how one manages people, situations and companies. How to make ideas marketable, how to implement them; the kinds of returns you need to sustain an idea.
A: Synergy Advertising is still perceived as a mid-sized agency. Are you looking towards taking it to the next level?
AM: If you look at the figures and even at the placements, for the past five or six years Synergy has consistently registered among the top five agencies, and in different categories; I don’t consider this to be mid-size. We have done very well in a short span of 13 years; being able to compete with agencies three or four times our age.
A: Yet so far Synergy has not been able to find an international affiliation?
AM: Things have changed. We recently signed a media affiliation agreement with Carat. Also, being affiliated does not mean that every company takes full advantage of the benefits. An affiliation has to be an exchange of training, knowledge, human interaction, a lot of things, and in many cases affiliations have been used by some companies as just a name plate to position themselves in the industry. Our understanding of an affiliation is totally different. We plan to use this partnership effectively and as an added opportunity to benefit from global knowledge and best practices. We are aggressively working with Carat on all aspects of the business. In this respect, a very important part is to first identify your own weaknesses, because once you do, you can understand what value you want to draw from the relationship. The next step is to fill those gaps and take advantage of the value added part of the relationship.
A: When was the agreement signed?
AM: In September, and earlier in June we acquired the China Mobile [media] account, so these past six months have been interesting for us and that is also part of how businesses work. On the advertising side, there are continuous opportunities and we keep looking at where we can enter into different relationships. The idea is to acquire the knowhow required for each business in our Group in order to achieve the excellence that is needed.
A: How many divisions are there within the Synergy Group?
AM: Six, and we call them SBUs (strategic business units). They are Synergy Advertising, which is the advertising and creative arm of the Group; Syntax Communications, which is a PR solutions provider; Synergy Marketing Corp, which is the event management and brand activation SBU, and Synchronize Media, which started off as a media buying house but has evolved into the media research and digital company of the Group. In fact, the scope of services offered by Synchronize is perhaps the most extensive in terms of traditional and non-traditional media as well as media and consumer research. We use the ICP (integrated communications planning) framework to achieve enhanced media planning capabilities. This involves setting objectives and then exploring the consumer journey in order to identify moments when our target audience is most likely to be receptive to the brand message. Then based on this knowledge we identify new media opportunities. Synergyzer and Brandsynario are initiatives for the industry; we wanted to create a platform where people can interact and gain knowledge.
A: Approximately what is your total employee strength?
AM: About 220 across all SBUs in Karachi, Lahore and Islamabad.
A: How challenging is it to find and then retain the right people?
AM: It is probably the most challenging part. Within each separate SBU we provide an environment where people have the opportunity to learn, grow and prove themselves through hard work and dedication. The best part is that most of the people who are running our SBUs today, joined us five years ago; they have grown from within the Group. We have given them the opportunity and the responsibility to lead those businesses.
A: Given that digital is so specialised, are there even enough people in the market capable of fully handling the challenges of the medium?
AM: Yes, there is less talent available when it comes to this medium, which is why digital has not exploded yet. But it will gain momentum. It has in fact come a long way in the last three or four years.
A: In the Pakistani context, how would you define ‘digital’?
AM: Digital is digital, whether in Pakistan or anywhere else in the world; it is a new and growing media. Although online audiences are increasing, some of the businesses in Pakistan are still sceptical about putting in a lot of money in this particular medium of communication. There are, however, brands that are becoming comfortable with the digital space and are reaping the benefits in terms of tapping into their audiences in compelling ways. Pakistan has a huge growth potential in terms of digital. We have one of the fastest growing populations on Facebook. The number of internet users is constantly on the rise and the latest research has proved that an increasing number of Pakistani audiences are interacting with brands online. Pakistan also has one of the highest mobile penetrations in the region, in particular the use of internet-enabled mobiles and smartphones is on the rise.
A: How effective is cinema as a communications medium?
AM: Cinema itself is an emerging industry in Pakistan, which is why the use of cinema advertising by clients is very limited at the moment. However, I am convinced that as our cinema infrastructure becomes stronger so will cinema as a high-impact channel of communication. Having said that, it is interesting to note how cinema has opened new avenues of marketing and we are seeing examples of integrated communication, where brands have capitalised on the opportunity of associating themselves with blockbuster movies. Cinema has a lot of potential, the problem is that we don’t have that many cinemas of that stature.
A: Stature as in?
AM: I am talking about the Cineplex concept. A lot of people have taken the initiative to bring the concept to Pakistan, but we need more Cineplexes. The next two to five years are crucial for rebuilding the medium. Cinema had totally collapsed so it has to be rebuilt; there is no way to just revive it.
A: Given the gloomy scenario, what sparked the initiative to rebuild the cinema industry?
AM: The passion of the individuals behind it; without their passion and commitment this rebuilding would not have been possible. Most people, when they see a business declining tend to move on, but in this case, these individuals took the initiative to show the potential of this business. And once you begin to realise the commercial potential everybody wants a piece of it, and interest and support is generated. After many years of trying, people in the business finally convinced the Government to take an interest and the Government played a big role by giving the medium room to grow. The kind of investment that has gone in the cinema industry in the last five years has been great. And it will have a wider impact, as there will be reinvestment in the form of local film production and this in turn will revive other areas of the industry.
A: Do you think what happened on Youm-e-Ishq in September will dampen the momentum?
AM: It is very unfortunate when something like this happens. And when such things happen, the situation has to be managed and support needs to come from everywhere. The Government especially needs to play a big role. This is a big thing to happen to an industry which is going through a rebuilding phase; it is necessary for the Government to step up and support the affected people, so that they can rebuild.
A: What are the challenges an agency faces in the current economic situation. How do you see the next year panning out?
AM: The overall economic situation has not improved much and there are serious challenges in terms of infrastructure in general and the energy sector in particular. Good governance, security and long term government policies are also major concerns for most companies. In this situation, the challenge is to keep innovating and focusing on sustainable growth and diversification. We are hoping for substantial growth in the coming year in all our different SBUs. The main issue as far as agencies and the media are concerned is the decline in revenues. People are fighting over minor issues of revenue, and yet you cannot not charge if you are to provide those services at the level of excellence required.
A: Is this decline because less business opportunities are available?
AM: Everyone is cutting costs, but it has to be balanced. You cannot cut a certain cost and expect to get the same result or let alone a better result. If you compromise on a cost, you will end up compromising on what you want as an output and on the final result.
A: Yet, if you look at retail, business there seems to be doing very well.
AM: It is only a certain segment. But yes, there has been progress in the sense that a lot of new brands are coming in, a lot of new malls are opening up. The environment there is good and that activity needs to be there; it opens up new opportunities for employment.
A: Would you agree that the existence of these pockets of ‘boom’ are a function of the fact that we have a parallel and undocumented economy running across Pakistan?
AM: Taxes are a challenge. The Government and the Federal Bureau of Revenue (FBR) are constantly trying to increase the tax base, but to do this effectively they have to plug in the loopholes within the system first. At the moment there is a contradiction between the people who are being asked to pay taxes and those who don’t see where the money is going and the FBR. Until that contradiction is managed and addressed, things will not change.
A: Which category of products will do well next year?
AM: There is a constant rise in the confectionary segment. Although they are also facing challenges, I still see the telecoms as being the largest players. The FMCGs too; a lot of them have improved in overall business performance.
A: How nervous are the telecoms given the recent issues regarding the interconnectivity taxes combined with recent hints by the Government regarding blocking prepaid SIM cards?
AM: Regarding the tax issue, the telecom’s perspective has not really been taken on this. They contribute billions of rupees in taxes so I don’t think one portion of it can be taken out of context; overall telecoms are a taxed industry. However, they are addressing this issue with the FBR. Regarding the prepaid SIMs, this is not practically doable, and any measures have to be done with their cooperation. They have already taken the required initiatives so in essence we are talking about the past. Registrations are done through NADRA and the systems are in place.
Ali Mandviwalla was in conversation with Mariam Ali Baig. For feedback, email email@example.com