Sandeep Goyal is an intrepid entrepreneur with an itch to step out of his comfort zone. Take his stint as the group CEO of Zee Telefilms, for instance. In 2002, even as one of the highest-paid CEOs of a listed company, he was driven by the thought that if he could make so much money for the promoters, he should start his own firm and make money for himself.
At that time, Japanese advertising agency Dentsu was looking to enter India through a local partner. Despite having only a single proprietor firm (an unincorporated business) Mogae Consultants, which he had started as a head hunting company with his wife Tanya in 1992, Goyal went ahead and pitched for a joint venture (JV). Fumio Oshima, then No 2 at Dentsu, had worked with Goyal in his previous role as the president of Rediffusion DY&R, a marketing and communications company, and was convinced of his abilities. Add to that a positive feedback from their biggest client, Toyota, and the JV was swung in Goyal’s favour.
Goyal then morphed Mogae Consultants into a private limited company in 2003, and launched a 26:74 JV with Dentsu. The ratio changed to 49:51 when the JV was taken to the Middle East in 2005. And, as chairman of Dentsu India, Goyal headed three full-service agencies.
But, in 2011, Goyal displayed his ability to get off the winning horse yet again and sold his stake in Dentsu for around Rs 250 crore. “We create businesses to primarily create value, and they were offering us a lot of money,” he tells Forbes India.
That exit also brought him a non-compete clause for five years, but that didn’t rein in the entrepreneur in Goyal. In 2012, he started Mogae Media, a subsidiary of Mogae Consultants, as a mobile marketing services provider.
In four years, Mogae Media has a client portfolio of 800 companies, which includes Pizza Hut and Domino’s, cafés like Starbucks, beverage brands like Coca-Cola and Pepsi, digital companies like Google and YouTube, and banks like HDFC Bank, SBI and Axis. In 2014, Mogae raised Rs 100 crore from Renuka Ramnath’s private equity fund Multiples. The next year, its revenues touched Rs 100 crore.
Says Goyal, 53, chairman of Mogae Media, “We help telcos monetise their subscriber base by selling their inventory to third party brands.” The company started out as an exclusive partner to Airtel and helped it make money from its 180 million subscribers by sending targeted SMSes from its retail partners. Which means that if a Starbucks outlet in an area wanted to attract local customers with an offer, Mogae would help Airtel spread the word through texts.
Bhaskar Bose, managing director-client success, Meltwater India, a global media intelligence company headquartered in Norway, says: “Any company offering services and solutions around mobility has a bright future.”
While mobile as a medium of advertising is gaining prominence only now, Goyal had identified this opportunity way back in 2006, when he had started Mogae Digital. The company had over 200 employees and produced mobile comics for Aircel customers. “Each comic used to be no more than 12 frames, so we could finish off easily in a 2G bandwidth,” he says. Mogae Digital gradually became the market leader in creating value-added service (VAS) for mobile. However, when the Telecom Regulatory Authority of India (Trai) brought in stricter regulations, the VAS industry began to peter out and Goyal quickly wound down the business in 2011.
Goyal has no qualms about folding up a business that was considered a trendsetter. “I prefer to run a far simpler operation where I wake up every morning and go to work, hoping to make additional value on what we make. If there is no economic surplus at the end of the day, I believe it is no business,” says Goyal.
He, however, wasn’t happy despite his burgeoning mobile media business. Instead, he was planning a strategy to tap a vast uncharted territory in the space. “I was doing all this advertising and I realised that unless I marry mainline media with mobile, it is a scenario where we are doing a small little furrow on one side and there is a huge ocean sitting on the other side. We need to connect the ocean to the device, or it won’t work,” says Goyal.
In 2015, he launched Tango Media, a subsidiary of Mogae Media to sell StarStar, a new product that he developed in-house. StarStar plugs a critical gap in mobile advertising that Goyal identified. According to him, advertisements are meant to serve two goals: One, to let people know about the brand and, two, to prod people to respond to it. “Having spent 32 years in this business, I know the call-to-action bit is the most difficult part,” he says.
Typically, the brand name pops up in the dying seconds of the ad, along with the plea to call or SMS to engage with it. This is where consumers are seen to have selective recall: Most seem to remember the name of the brand, but not the engagement procedure. “If you could connect a TV or a hoarding outside to the mobile device, it would be a fabulous 360-degree connection,” says Goyal.
Agrees Preeti Desai, the country manager of Mobile Marketing Association: “According to Google, almost half of all local mobile searches result in a phone call. Unfortunately this is highly underused.”
This is where StarStar steps in. It has tied up with 12 brands to ensure that customers can directly reach the brand from their mobile. For instance, a user just has to dial **Bank on his keypad to reach Yes Bank or **Hero to book a test ride for a Hero bike. The service, which was rolled out on April 1, requires no smartphone, data or app download.
“This technology is the next logical step in terms of ‘fulfilling a mobile moment’. The ability to press StarStar followed by a category which links to a solution provider is hugely empowering from the customers’ as well as the brands’ perspective,” says Hareesh Tibrewala, joint CEO, Mirum India, a global digital agency owned by J Walter Thompson.
Milind Pathak, CEO, Madhouse, the mobile media and advertising arm of the WPP Group, adds: “For consumers, it’s no more about remembering tedious numbers, and for marketers, it’s a great way to create brand recall.”
Both, however, sound a note of caution. Adaptation of the technology itself is a challenge, they point out. “It needs to reach a tipping point before it becomes a part of consumers’ daily usage habit. And that is easier said than done. The example that comes to my mind is QR code technology, which never really took off in India,” says Tibrewala. Besides, Pathak adds, given the use of key words, StarStar works with a limited inventory model. It means **Bank allows it to tie up with only one specific bank, leaving many others out of its ambit. Hence, marketers and brands need to rush to take advantage of the platform. Goyal is aware of these limitations, and is working towards selling domain names at the earliest. “We are on the verge of closing a large FMCG, a beverage company, at least three more clients in the banking and financial space, and at least one more auto company. Discussions are on with ecommerce companies too. We should have 25 clients on board by the end of June,” says Goyal.
Goyal spent his childhood in Chandigarh and graduated in English literature (with a gold medal) from Panjab University. He later did an MBA from the Faculty of Management Studies in Delhi in 1984 and started his career as a salesman with Nerolac Paints. “I spent two wonderful years at Nerolac working in the mandis in Rajasthan and Punjab. This was the Punjab of 1984, full of terror and gore. Being a salesman was not easy. But I enjoyed the learnings and workings of the markets,” says Goyal.
He wanted to do something more creative and not just crunch numbers. In 1986, he switched jobs and joined ad agency Hindustan Thompson Associates, where he worked for brands like Maggi sauces and Horlicks. He says “it was the most fun job those days”, and his work was appreciated globally when he became the first Indian to be on the jury of the Emmy Awards in 2002.
He is also passionate about language, which he says is his “first love”. He has authored two books—The Dum Dum Bullet on the business of advertising in 2003 and its sequel Konjo-Fighting Spirit. He is now working on his third book and also writes fortnightly columns in business magazines.
Meanwhile, Mogae Consultants continues to remain an investment vehicle for Goyal and his wife. Some of their top investments included a stake in Turmeric Vision, which operates Food Food channel in partnership with chef Sanjeev Kapoor, stakes in a customer relationship management company (ClozR Communications), a digital agency (Clickstreamers) and a media market place (www.lastminuteinventory.com ). They’ve exited all these companies subsequently.
The ability to exit at the right time makes for a strong business philosophy, according to Goyal. “Today, it’s fashionable to not be cash positive, make losses and burn cash. I don’t understand this startup culture. We are still old-fashioned, so we make money, and it’s profitable,” he says.
Mogae Consultants has stayed invested in a creative boutique startup called The Mob and PR firms Torque and Midori. Mogae Media, on the other hand, is focussed on scaling Tango Media and using data to service clients better. It launched Mobocracy as a full-service mobile agency last year and has tied up with Israeli startup Idomoo, which will help advertisers create personalised video advertisements. Along with Germany’s Zeotap, it has also launched Mozeo, a platform for advertisers to buy media space on mobile platforms through real-time bidding.
Mogae Consultants has also decided to invest Rs 100 crore towards acquiring digital startups which have built strong brands, but burnt too much cash in the process. “With our funds, we would like to re-engineering and re-launch these startups,” says Goyal.
Over the years, Goyal says, one lesson learnt during his MBA has stayed with him: “Just like a soldier, in business, one should know when to shoot and when to duck.” And he is putting this learning to good use.
(This story appears in the 24 June, 2016 issue of Forbes India. To visit our Archives, click here.)