"We cannot discount the learnings from the local market especially one as strong as India": Stephen Li

In an exclusive conversation with afaqs!, MEC's Stephen Li discusses the performance of the agency in the Indian market, trends and growth plans

Stephen Li, chief executive officer, South and Southeast Asia and Australasia, MEC considers India to be his "spiritual home". According to Li, his visits, besides reviewing the agency's business, also are also about exchanging learnings from the global and Indian markets.

afaqs! caught up with Li and T Gangadhar, managing director, India, MEC as they spoke about the agency's performance in the country in the wake of recent significant business wins; trends in media planning; the benefits of being associated with Group M and more.

Excerpts from the conversation:

afaqs!: What are the learnings you bring to India, and what are you taking back?

Li:
You are only as strong as your client. And I think we have a very interesting, eclectic yet balanced mix of clients; globally, regionally and locally.

You have certain agencies that could be dominated by more multinational clients, and then there are agencies that are more locally focused. We, at MEC, are very fortunate that we strike a very good balance between the multinational and the local clients. That is true, whether you look at the US, the UK, Singapore or here in India.

With that in mind, when it comes to multinational clients such as a Mercedes Benz or a Colgate Palmolive, there has to be a degree of consistency in the way we deliver work to them. Hence, it is important that we stay joined up.

But at the same time, when we are dealing with our local clients, like say Zee TV here in India, there will be a certain way in which we function with that piece of business. We may not have such clients elsewhere. We can take learnings from them as well.

There could also be some interesting new developments -- the IPL (Indian Premier League), for example. IPL, in some ways, is a uniquely Indian institution. But the way in which MEC India works with our clients on IPL has really been a very strong lesson for all the MEC offices around the world, on how to help clients leverage an opportunity beyond the usual vehicles.

These instances help us not to discount the learnings that we can get from the local market, especially when it is a market where we have a team as strong as we do in India.

afaqs!: Comment on the performance of MEC India in the APAC region, as well as globally.

Li: India, at the moment, ranks only behind China in the Asia-Pacific region, in terms of absolute size of the market. Having said that, if you look at our growth rate over the course of the last 12 months, the new businesses that we have won and the incremental business we have gained from existing clients; the absolute growth in our billings year-on-year reveal that India is clearly head and shoulders above every other market in the Asia-Pacific region.

Even on a global level, if you compare year-on-year, the growth rate here in India is probably only second or third behind some of our larger markets in Europe and America.

Gangadhar: I think we have had one of the most prolific runs this year, among all agencies. It started with Zee, Mercedes Benz and then Colgate, to name a few. And then we won Reliance Communications.

afaqs!: What does Group M bring to the table? Is there a perception of MEC being an underdog in the group?

Gangadhar:
I do not think we are an underdog. We are one of the lesser known compared to the rest. We are also very new. Having said that, in terms of size, we would be the youngest among the top six agencies today.

We have shown rapid growth in the last two years. We have built our reputation on the back of fantastic ideas plus great resources. It is a lovely melting pot of both. We have a unique identity in the market and within Group M.

We are very different culturally in terms of our processes, our people and tools.

In terms of what Group M brings to the table, I think it is much leveraged. Of course, we have a lot of shared services. HR is shared; training is shared. That is the Group M-MEC relationship.

Li: In spite of the fact that we are the youngest among all the Group M agencies, the fact that we have had lesser presence on the ground, the fact that, till recently, we were among the smaller of the Group M agencies; yet whether it is Reliance, whether it is Zee…all the new wins in the recent past, we have been entrusted with these businesses.

Let's face it; clients have choices! And the fact that they chose MEC speaks a lot.

Now that we are far from being the young challenger in the group, now that we have grown up significantly and are more mature; the challenge to look forward to now is how we retain the beautiful melting pot that we have, whilst having a significant presence in the market.

Sometimes, having that size does become a baggage. There are certain things that you can do when you are smaller and get away with, and there are things you cannot. So, retaining that balance of who we truly are as an agency, whilst now being a significant player in the market, is going to be the next big challenge.

Gangadhar: If you ask me what MEC is all about, I think we recognise the changes that are happening in the landscape much earlier. We have built an organisation to take care of it about two-three years ago. In many ways, we are what we call a 'future-ready' agency.

The way we are structured is in line with the changes that are happening, and we are playing a better role in communication planning.

afaqs!: How do you think you stand out within the group and in the industry? What is unique of MEC?

Li:
In terms of our strategic approach towards clients, MEC, globally and in India, was one of the first to understand the core implication of being a true 21st-century media agency, in the sense of the understanding that we have, and how we continue to develop our communication expertise beyond simply media planning and buying.

If you look at the history of MEC, we first developed this whole ethos of active engagement. In order to affect a change in consumer purchase pattern and behaviour, you have to engage them in a conversation. That was something MEC was practising a long time before anybody else.

This is why we were among the first agencies in India and other markets to embed special services in our agencies. So, when you look out there, you are not just looking at media planners and media buyers. You are looking at communication experts in sponsorships; you are looking at interaction and digital specialists; you are looking at content specialists.

That is something that is very much in our DNA -- we always try to provide the best 360-degree solutions to clients.

Sometimes, clients say that here is the budget and what could be done best with it on TV and press. The easy answer would be to go back with a media plan that satisfies just that request. But then, we believe that we can work harder for them. Even if it means that we have to sometimes take them out of their comfort zones, we are very ready to do so.

Second, and although it might sound a bit 'airy-fairy', I believe that we do have quite a unique culture at MEC. I think the way we treat each other as people is very important. We have a culture, in which if you had to ask myself or our global CEO or any of our colleagues that is MEC a good place to work for; I think you would get a uniform answer. We do have an enormous amount of respect for our people. It could be a cliché, but we do function as a family.

All of this translates for our clients as well. When they get a combination of challenging and interesting thinking, combined with the culture and ethos that is there, clients respond to that. That is why our client attrition around the world is incredibly low.

Gangadhar: The way we approach problems and opportunities and the way we craft our communication strategy, we are not about media buying and planning anymore. We are playing a much larger game. The sheer product that we put out, you can pick out a MEC presentation vis-à-vis anything else.

We are not about the numbers. We are really about the story behind the numbers. For example, when it comes to IPL, we are one of the most prolific agencies that have brought brands and the property together.

Culture is something that is difficult to articulate. You know it is there, but you cannot exactly say what it is. There is a certain 'MECness' that is there. That is what makes us unique.

afaqs!: Going beyond the conventions, who sets the benchmark? Is it the client pushing the agency, or does the agency show the way?

Li: I think it is a combination of both. At the end of the day, to use a cliché, it does take two hands to clap.

Clients are getting more sophisticated. Clients are getting more demanding. However, when we talk about pushing the envelope, sometimes it is not because clients are demanding.

Let's face it; we still do live in a real, tangible media world in many ways, and the client in a very tangible business world. Every dollar they spend needs to be justified. At the end of the day, it is just what a lot of traditional media still gives you.

In order to get the right kind of impact and the right kind of connection with the consumer, sometimes it is about looking beyond the obvious. But we would never do that without being in consultation with our clients. It is about walking with them down that path together.

It is about agencies and clients having a common understanding in terms of what their objectives are about; and a common understanding of what the broader parameters are of what should and should not be done.

Quite often, it could be clients who lead the way. Clients could come to agencies and say that the same things are being done through the year, and it is time that something different is attempted. Our answer to that is always 'yes'. There is always a different to approach the same problem.

afaqs!: Do you see any major trend in the way media planning is going forward?

Li: Certainly, there are certain things that India is getting right more quickly than the rest; for example, leveraging sports sponsorships.

If you look at the new media channels, obviously, the key word is digital. When we talk to clients now, we always talk in terms of what we call 'paid, owned and earned' media.

You have the paid channels. It could be online media, such as display advertising, or television or print -- the paid areas where the clients put down the money and buy the media space. That has worked for the last 200 years, and paying for space shall continue to work.

Now, we have something like 'owned media', the media that is really within the clients' ownership. It could be the content vehicles that they own.

And then, you have this emerging new area called the 'earned media'. It is all the social media activity, the blogs and so on. These are areas where you have to earn your recognition. You do not pay for anything; you do not own that space. But what you do there could lead to very significant benefits, in that earned medium space.

For us, when we look at new media now, we see it as how, as a brand, there could be a consistency of message. It goes through stages where you are developing that relationship; and conversation and communication does not remain a one-way model.

Gangadhar: We look at media completely in a new light, where we could be the pioneers in the paid, owned and earned spaces. What you do in the paid and owned spaces is really what drives the social chat, blogs and what people talk about online.

The other trend with India in perspective is perhaps that the opportunity in this country, the internet revolution could be on the mobile. You could see a lot of people accepting the internet on mobile and of course, when 3G comes, it will go through the roof. I think that is interesting.

We also recognise changes that are happening socially. There was a time when we talked about the retail boom. It calmed down in 2009, but the retail boom directly impacted home television viewership. If you have a large set of people increasingly spending time outside the house, then you have to find other ways of catching them.

Talking about youth, they are traditionally considered as light viewers of television, which means you have to catch them in the places they are, the hotspots. Therefore, the mobile phone can really play an active role there.

Take IPL for example again. IPL this time was on four screens -- the television, YouTube, mobiles and in cinema. These are real opportunities. You can now engage with the consumer on each of those platforms.

And the whole thing about social media is all about sharing. Good content will be shared. Great content will be shared more.

The lines are blurring between advertising and content. Earlier, you had brands chasing consumers. The newer metric, I think, will be where consumers chase brands.

Why is Apple so popular? Every brand today aspired to be chased by the consumer. For that to happen, a regular TV spot is not going to help. It could be a communication, but the platform you put it on is going to be critical.

You have to move from passive persuasion to active engagement.

Li: That is a key consideration, yes. You might talk about digital, television, mobile or whatever the delivery vehicle may be; we all know with the younger generation, the patience threshold for advertising has become lesser and lesser. When you are delivering an advertising message to the youth, never mind if they are bothering to receive it, if they are not reacting immediately in a negative manner, it is a victory of sorts. They only care about content and how you entertain them.

If you are entertaining me, then perhaps I will have some time for you.

Think about the iPhone. Why would anyone chase it, if it was just another phone on which you could store music? It is because of the apps, the technology that makes the iPhone what it is. Otherwise, it is just another phone.

afaqs!: What are the growth plans for MEC? Are you focusing on organic or inorganic growth?

Li: I would be wrong to say that the focus is on one over the other. As an agency, we have to keep growing. You are only as good as your last success. Whether that growth comes organically in terms of growing our existing clients' portfolio or from new business wins, we do not play favourites in that perspective.

Ultimately, when you ask us where the greatest satisfaction comes in, it is always great to win new significant business. Winning Reliance was fabulous. We definitely are chasing more of such wins.

However, it is equally satisfying when you are working with a client for a considerable amount of time; and it is truly through your strategic prowess and through your ability to understand the client's needs that you grow your portfolio with them.

We do not have a favourite son. We like any kind of growth that comes in. In India, there are a lot of opportunities for the short, medium and the long term; in a market as dynamic as this.

Talking about mergers and acquisitions (M&As), I will go back to the earlier question on Group M. This is one of the benefits of being associated with Group M and WPP. We often look in areas of M&As.

When it comes to M&As, it is rarely a case of going ahead and buying a like-for-like agency. When we look at M&As, it is in new discipline areas. For instance, within Group M, the M&A activity would usually be looked at to help all the agencies in the group.

One good thing about working within WPP is that when you are working with Sir Martin Sorrell, he is always on the lookout for the next interesting deal. There will always be opportunities for all of us.