I love a good story, be it through advertisements, movies or an entrepreneur who dared to think differently. I believe in bringing in fresh perspectives -- to a corporate profile or a Facebook post -- like new wine in an even newer bottle. I graduated with a journalism degree from the Xavier Institute of Communications. My weekend rituals involve watching Bollywood movies and reading up on style trends.
When Tarun Rai took over as CEO, South Asia, of J Walter Thompson (JWT) on March 2, 2015, the advertising agency was experiencing single-digit growth. In just a year since he assumed charge, the results have been impressive: JWT now boasts a nearly 15 percent growth rate, is the number one agency in February 2016’s The Gunn Report—a global index of creative excellence in advertising—and Contract Advertising, part of JWT South Asia, is ranked third. Rai knows the pulse of the company, having worked at JWT for 19 years previously before becoming CEO of Worldwide Media in 2008. In an interview to Forbes India, he discusses the changes he is bringing about in his second innings at JWT and his targets for this year. Excerpts:
Q. What was it like to be away from the advertising industry for seven years?
It was useful because it gave me an outside-in perspective. Coming from a traditional advertising agency, I used to think that client spending has reduced. In fact [while I was away], I learnt that clients are spending a lot more on communication, but not necessarily through traditional agencies. Their spending was getting fragmented, including clients working directly with the media. The other important thing [I realised] was the need to develop multiple revenue streams. Third, in terms of people in the advertising agency business, I sensed that the entrepreneurial zeal that they should have is missing.
Q. Why did the growth rate [of JWT] drop to single digits?
We are a 151-year-old company globally and we have completed around 85 years in India. There are bound to be ups and downs. The global recession hit everyone, but some companies took a bit longer to recover; JWT was one such organisation. But I am sanguine about such things because a couple of slow years are okay. The good thing is that this is a resurgent company and I am looking at more growth.
Q. What was the mandate given to you when you rejoined JWT?
The first was to focus on the right thing, and for me, that was growth. I wanted everyone’s attention, energy, commitment and passion on growing the company. And if everyone is aligned to that, the costs and profits manage themselves. The second was to fill up all the important positions quickly. The third was to set the culture right. I removed the frosting from my cabin door to give a signal that we’ve got nothing to hide. It is important to empower people. And lastly, it is all about teamwork.
Q. Are the changes that you speak of beginning to reflect within the organisation?
Yes. People are already collaborating. We keep talking about integration, and I believe more interaction leads to better integration. This is what clients are also looking for. Globally, our organisation is pushing to deliver business solutions to clients. Not just communication and advertising. You can do that if you have collaboration between the various companies in the group.
Q. Where do you see growth coming from?
Our growth essentially comes from three areas: One is new business accounts. The second is new business from existing clients. Third is acquisition. I don’t want just a larger market share from the traditional agency space; I want more market share from more markets.
Q. How has the strategy translated into business in the last year?
We have had double-digit revenue growth, close to 15 percent. If you fix your revenue growth, your profits will get fixed automatically. Our profit growth was into the high twenties. In terms of new business wins, across group companies, we managed 166 new pieces of business. A caveat here is that for some of our companies, like Encompass, new business is a factor of life because they don’t have long-standing clients. But even after taking that and project-based businesses out, we still have 120 new clients on a long-term basis.
Image: Getty Images
14.2% is growth in ad spending in India in 2015, to Rs 49,758 crore, according to media agency GroupM
Q. Do you believe in the policy of ‘Digital First’ or ‘Digital Only’?
I have always said that there is one brand, one brand message and one consumer. The difference is that the same message is being conveyed to the same consumer through a variety of platforms. So you can’t say ‘Digital Only’ because the consumer does not consume digital only. I want ‘Digital First’ because that will force people to think out of their comfort zones.
Q. What percent of your revenue comes from non-traditional media?
Around 35-40 percent comes from non-traditional media currently. We expect it to go to 50 percent this year.
Q. So, is the pie for traditional media shrinking?
It is not shrinking, but it is not growing at the pace at which the other pies are growing. To my mind, this [traditional media] will be growing in single digits; the others in the communication space are growing at strong double digits.
Q. What are the kinds of companies you are looking to acquire?
So far, we have moved from traditional to digital to experiential to shopper marketing, but we have not gone to design, nor have we acquired a company on data, content or technology. We plan to launch our own content company called Colloquial (content marketing unit), which is a global initiative. There is also the option to acquire a content company and grow Colloquial through that.
Q. What challenges does 2016 throw up?
Apart from Colloquial, we will launch a production house called Small Fry. We want to expand the footprint of our smaller advertising agencies like ADK Fortune, Mindset and Contract, and are also targeting two to three acquisitions. The challenge is growing in double digits after a double-digit year. But I am sure that it will happen. Another worry is to attract the best talent because that comes at a premium. I want multi-disciplinary people who have never worked in an ad agency.
Q. What makes you optimistic about the future of the advertising industry?
I see huge opportunities for JWT globally. Seven years ago, you would hear more cases of global brands coming to India. Now, Airtel and Godrej are in Africa, Hero is going all over the world, Tata Sons’s mandate is being handled by JWT London and so on. I feel happy when I see Wipro at the English Premier League stadium hoarding or Infosys and Tata Consultancy Services sponsoring the New York Marathon. We are in a good place because ultimately it is about content, though the consumption may vary.