Interview with Farhan Khan, COO, Starcom Pakistan.
Farhan Khan, COO, Starcom Pakistan, speaks to Aurora about what media agencies have to do to stay relevant in the next five years.
AURORA: What brought you back to Pakistan after a long stint with Starcom in the Middle East?
FARHAN KHAN: I have been in this industry for 17 years. When I started, I had no plans to join the media industry. In 2000, I had just completed my MBA and it so happened that I knew a few people working in this industry and I was fortunate that Raihan (Merchant) asked me to join him. In those days, barely a few people were even aware of the concept of a media agency. All I knew about ad agencies was that they made the ads we saw on TV. Once I joined Pak Mediacom, I began to like the work. We were a small team of about 15 people. P&G were our client; they were the biggest client in Pakistan in the FMCG sector. Later, I joined AC Nielsen and worked there for almost three years. It was a good combination to have acquired media as well as market research experience and gain an understanding of the entire process; both are part of the brand’s marketing journey, but from two different perspectives. Then, in 2005, I had the opportunity to launch Telenor. Adcom had won the account and Imran Syed asked me to move to Islamabad. It was a great experience to run an office and work on one of the biggest launches in Pakistan.
A: When did you move to the Middle East?
FK: Starcom Dubai approached me in 2007. It was a completely new environment to work directly with the Publicis Group.
A: What accounts did you handle?
FK: I handled three to four clients as Media Director, including Almarai, which is one of the biggest dairy companies in the Gulf Cooperation Council (GCC) countries. As they were based in Saudi Arabia, I was eventually asked to move to Saudi Arabia as it was difficult to handle the account from Dubai. Then, at the end of 2016, Raihan approached me to join Starcom Pakistan, because their CEO, Farhan Qureshi, was moving to Google. It was a better opportunity and a better position, involving as it did running a team of 150 people out of Karachi, Lahore and Islamabad. I joined Starcom Pakistan in March 2017.
A: In your opinion, how has the media buying and planning function evolved during your 10-year absence?
FK: I was surprised to find that things were more or less the same, which is quite unfortunate for the industry.
A: What is holding it back?
FK: Several things – perhaps mostly in terms of human resources and here I blame the agencies mainly; we were unable to train people the way we should have and as a result, we are lagging behind. In fact, it was one of the reasons why Raihan asked me to come back; ideally, he should have been able to find someone from within Pakistan. It is unfortunate that we haven’t been able to train people properly across all levels.
A: What are the reasons behind this failure?
FK: At our end, we were not able to sustain the Management Trainee (MT) Programme Raihan had instituted. This programme stopped for about three to five years and as a result, we missed out on hiring fresh graduates during those years. Our policy is to train new graduates ourselves; we prefer not to hire someone with one or two years’ experience from another organisation because they will already have developed their own mindset. From the early days, Pak Mediacom was recognised as an institute of media planning and buying. Apart from the on-ground experience, the training is very academic. We have 15 training modules and our MTs are required to pass a proper examination.
A: From which academic backgrounds do you select your MTs?
FK: We look for backgrounds in science, marketing, sales and finance. They come from CBM, IBA, Hamdard, LUMS, Szabist – all the universities. We do not have a policy to hire graduates from only IBA or LUMS. In my opinion, graduates from smaller institutions (in terms of size, not quality) stick with us for longer. IBA and LUMS graduates tend to get more opportunities and this distracts them. We look for the right attitude. If the attitude is, “I am here to explore and enjoy myself and move on if I don’t like it,” rather than “I am here to learn,” we prefer not to take them on as MTs.
From an overall perspective, I believe the broadcasters and publishers have not evolved in the way they should have. In terms of digital media, Pakistan is three to four years behind the Middle East and a further two or three years behind the rest of the world. Google and Facebook are interested in markets like Bangladesh, India, Myanmar, Pakistan and Sri Lanka and in the next five to 10 years, the money will come to these markets. Digital penetration in the West is at 70 to 80%; in Pakistan, it is at 30%. As a nation, we don’t spend money on education, but we do spend on smartphones.
A: What specific training do you provide?
FK: From media planning to buying, operations and finance. It is a rotational six-month programme and all MTs interact with teams in every department after which there is a performance evaluation. If they qualify, we offer them a job. We are the only organisation in the industry to offer Rs 50,000 as a salary in the MT programme. Once they are confirmed, they can expect a further 10 to 15% increase. This is one of the reasons why people join us. We offer good money and the intention is to get good resources. Although today we have 40 MTs on board working in Karachi, Lahore and Islamabad, there is a 25 to 30% resource gap between middle management and associate director and director levels. This is what I am struggling with because if I don’t close the gap, I cannot groom successors for management level jobs or even for my own. Another challenge is that due to the vacuum in resources, after a year or so, my MTs are hired by other agencies at higher salaries. But I am continuing with the programme because most of them do stick with me.
A: What other factors were responsible for holding back the development of this industry?
FK: From an overall perspective, I believe the broadcasters and publishers have not evolved in the way they should have. In terms of digital media, Pakistan is three to four years behind the Middle East and a further two or three years behind the rest of the world. Granted, there were factors beyond the control of the industry, such as the YouTube ban, which lasted about three years and resulted in the industry lagging behind the rest of the world. The good news is that we are evolving in digital very quickly and the three- or four-year gap will be overcome in the next one or two years. The numbers speak for themselves. We have a population of over 200 million; the total population of the GCC countries is 100 million. Google and Facebook are interested in markets like Bangladesh, India, Myanmar, Pakistan and Sri Lanka and in the next five to 10 years, the money will come to these markets. Digital penetration in the West is at 70 to 80%; in Pakistan, it is at 30%. As a nation, we don’t spend money on education, but we do spend on smartphones.
A: Apart from the YouTube ban, what were the other issues?
FK: Most TV channels focus on news and the entertainment channels have limited themselves to dramas and sports; yet, there are a lot of other entertainment genres such as music. We used to have two or three music channels; now, even those are gone. We have been running Coke Studio for the 11th season and there is a big appetite for music in Pakistan. Unfortunately, the big media groups are not doing anything about music; this is just one example.
A: How does it affect the media buying industry?
FK: The more ways I have of spending money, the more I will be able to convince my clients to spend on different genres. Today, if I talk to P&G or Coca-Cola, dramas and news are the only two highly-rated genres available in Pakistan. If I have music, then I will have a third option. I am not saying that I will invest the same amount on music, but at least I will invest some money. Cinema has made a comeback only in the last two or three years; why did we not do this 10 years ago? Today, the TV networks are investing in film and that is both a good and a bad thing. Good, because they are investing in film; bad, because I don’t know for how long they will be able to sustain such investments in the future. We have not invested in theatre for the last 10 to 15 years. The industry has not tried to evolve itself holistically; in the West, they work on all these genres. The outcome is that what inventory publishers and TV networks offer me is not enough. Eighty to 90% of the digital spend goes to Google, Facebook or even to international publishers for that matter, and only five to 10% goes to the local publisher. My question is – why aren’t local publishers looking to take a higher share of this? Why aren’t they investing in providing media agencies with more opportunities to spend on them?
A: Starcom Pakistan seems to be putting a great deal of emphasis on digital.
FK: Yes we are, but that doesn’t mean that TV will stop being effective. That is a misperception people have. When I returned to Pakistan, I met a lot of people who were under the impression that eventually there will only be digital and TV and print will disappear; this is not possible. Yes, some of TV’s budgets will go to digital, but TV will remain the largest reach platform in Pakistan as well as globally. Digital’s penetration in Pakistan is 30% compared to TV’s 90% penetration.
The hybrid planner concept is a global Starcom one. It will not only have a positive effect on the agency in terms of cost-saving, it will have a positive effect on our human resource because in the near future, agencies will not be hiring a TV planner or a digital planner; they will expect the same person to be able to do both. It is extremely important for anyone who wants to make a career in this industry that he or she prepares themselves for this.
A: Starcom Pakistan is credited with having launched the first programmatic campaign in Pakistan for Telenor. This suggests you are investing significantly in technology.
FK: The future of media planning and buying is about resources, data and technology. If you have these aligned in the next five to 10 years, you will be able to survive; any agency (in Pakistan or globally) that does not have these three elements aligned will not be able to survive. I am not talking about growth; it is about survival.
A: Yet, not many agencies in Pakistan seem to be anywhere ready to do this.
FK: The local agencies are not doing anything about this. The global and the affiliated agencies are, because they understand this is critical to surviving. Resources are critical because that is how you run an agency. Data is critical in achieving planning efficiencies and meeting the client’s business objectives. We are the only agency in Pakistan to have partnered with Oracle’s data management platform BlueKai; this has given us access to data that enables us to precisely target the audiences we want to reach with regard to specific products and offers. For programmatic, we have invested in Google’s DBM (Double Click Bit Manager) platform.
A: Programmatic has come in for a certain amount of flak. People sometimes click an ad by mistake, after which they are bombarded with similar ads no matter where they are in the digital space.
FK: Yes, it is an issue because with programmatic, I am not buying a specific medium or platform; I am buying people’s interests and their behaviour on digital. I select these interests at the start of a campaign and then the system automatically delivers my ads. So, yes, it is possible that the system can identify someone as having an interest in a specific product when in fact, he or she does not.
A: The problem goes further; there has been a great deal of debate about ads landing on inappropriate sites.
FK: Yes, this is a problem and I am not defending it, but it accounts for about 0.5% or 0.3% of the total inventory going out. However, solutions to this issue are being developed. A global third-party company called Vidooly has developed a technology capable of checking the content of large numbers of websites and white-listing those that are free of unacceptable content. In Pakistan, we have white-listed about 7,000 websites ourselves and we did it manually, because the technology is not available here. It is important to remember that programmatic provides greater levels of efficiencies in terms of inventory, as well as in terms of planning and buying.
A: You have identified HR, data and technology as the three pillars that will define an agency in the future. What other changes do you foresee?
FK: Another important change we are implementing since last year is to start training our planners to become hybrid planners – planners who are equally proficient in both conventional as well as digital media. I will not be able to survive as an agency if I have to hire two parallel teams. The vision is that in the next one year or so, the same person will be talking to my client about conventional as well as digital media. The hybrid planner concept is a global Starcom one. It will not only have a positive effect on the agency in terms of cost-saving, it will have a positive effect on our human resource because in the near future, agencies will not be hiring a TV planner or a digital planner; they will expect the same person to be able to do both. It is extremely important for anyone who wants to make a career in this industry that he or she prepares themselves for this. A further change is the fact that when the concept of media planning and buying took hold 10 or 15 years ago, media departments were taken out of the advertising agency and became separate media agencies. Today, what clients expect from their media agency has grown three to fourfold. Today, we have to be communication consultants because clients expect us to understand the implications behind their research, understand the concept behind the creative campaign and act as their partners in the brand communication effort. I can no longer limit my agency’s expertise to media planning and buying. This will no longer be workable in the future.
Farhan Khan was in conversation with Mariam Ali Baig. For feedback: email@example.com