‘India a beacon of excellence within our APAC operations’
INTERVIEW
Mergers can signify a seismic shift in any industry, with the potential for both triumph and turbulence. But EssenceMediacom, born on 31 January 2023 from the fusion of two powerhouse agencies within GroupM, has emerged as a strong leader in the industry in just 15 months. Boasting $21 billion in global billing, this amalgamation represents more than just a union of assets. In an interview with Mint, EssenceMediacom’s APAC CEO Rupert McPetrie, and South Asia CEO Navin Khemka, shared insights into the merger journey, the imperatives guiding their approach, and the roadmap for future growth. Edited excerpts:
So, it’s been 15 months since the birth of the youngest and the largest agency within GroupM, boasting $21 billion worth of global billing. But mergers of this scale and size are not always easy. What key insights and lessons have you gained from integrating two such distinct agencies?
Rupert McPetrie: Bringing together these two businesses was an extraordinary moment for us—merging two robust agencies, each with a stellar client list and a wealth of talent. Our aim wasn't merely to combine them; it was to forge something entirely new.
Hence, we crafted a fresh proposition centred on breakthroughs for brands. Reflecting on the merger, there are several vital learnings and insights. Firstly, prioritising the well-being of our people was paramount. With 2,500 employees in the Asia Pacific, it was essential to keep them informed and cared for throughout the process. Secondly, communication played a pivotal role. Thirdly, balancing speed with thoroughness was critical. Lastly, maintaining unwavering focus amid the daily operational demands was crucial.
How has this played out from the Indian perspective, particularly in
Facquiring new business?
Navin Khemka: Prior to the merger, our track record in India showcased steady growth, adding between $80-100 million in new business annually. Despite this, we didn't rank among the top 10 agencies in the country. However, post-merger, we ascended to the top three. Overnight, the merger propelled our benchmark from $80-100 million to $120 million in the last year alone. In the first quarter of the current year, we've secured $35-40 million in new business.
Is this growth in new business coming at the expense of cannibalising GroupM clients?
Navin: Not at all. We maintain robust relationships with our sister agencies within GroupM, governed by a strict non-compete policy in the market. If EssenceMediacom pursues a client, others abstain from pitching for the same business. Incumbent agencies defend their existing clients in case of a pitch. With a client retention rate of 99% and a pitch conversion rate of 90%, our focus remains solely on winning pitches. We only pitch to win and feel nobody is bothered if you come number two.
How did you navigate the merging of distinct thinking styles from the two agencies?
Rupert: The amalgamation of the two agencies provided a brilliant opportunity to harness genuinely complementary skills. The future-forward approach, coupled with the ability to cater to a diverse array of client needs, is instrumental to our success.
With the emphasis on performance marketing, do you believe the role of the CMO is diminishing?
Rupert: The evolving role of CMO extends beyond marketing execution to encompass strategic business contributions. As such, discussions with global clients increasingly revolve around solutions that span various marketing disciplines, underscoring the ongoing evolution of our industry and the imperative to demonstrate value.
Are clients in India receptive to this perspective?
Navin: A point to consider is the significant presence of startups within the top 10 spenders in the country's advertising expenditure landscape. This begs the question: why invest such substantial sums if not to eventually cultivate a brand presence? While initial returns may be garnered through B2C or e-commerce platforms, the imperative of brand-building becomes undeniable in the long run. The aim should not be to remain niche but to resonate as a brand accessible to the masses.
Where does India fit into EssenceMediacom’s overall business strategy?
Rupert: India stands as a shining beacon of excellence within our APAC operations, currently ranking third in scale after China and Australia. It's also our fastest-growing market. This growth trajectory reflects two key factors: the tremendous potential inherent in the Indian market and our business's exceptional performance within it. Furthermore, our operations in India consistently outpace market growth, fuelling our confidence in the region's prospects. Globally, India holds the seventh position in our market hierarchy.
What is the vision for the next five years?
Navin: Our vision entails fortifying our business to withstand the imminent shifts in the Indian media landscape. While scaling remains a priority—aiming to ascend from our current position as the third-largest agency in the country to potentially leading the charts—we also recognise the imperative of diversification.
How are ROI, measurability, and related metrics evolving in your approach?
Rupert: We're increasingly integrating metrics that reflect consumer attention, especially considering the diverse engagement patterns across platforms. Also, we're striving for enhanced visibility across the value chain. While some aspects, like attribution and last-click measurement, are more straightforward, achieving an end-to-end perspective necessitates sophisticated modelling. We've undertaken efforts to advance in this domain, recognising the need to adapt to the evolving landscape.
‘‘ Prior to the merger, track record in India showed steady growth, adding $80-100 mn in new biz annually Navin Khemka EssenceMediacom’s South Asia CEO