 Hello everyone and good afternoon. So I must thank exchange for media, I think for bringing out this important subject for discussion. The topic is I think sharply focused. I'm going to sort of focus my attention on not media investments and all of that, but just on what should the media agency of tomorrow be or what will it be and what should it be so that you know it continues its preeminent position in the A&M world. Now for a bit of perspective, the media agency first appeared in the world in France in 1968. It then moved to the U.S. in the 1980s and it took about a decade for it to finally arrive in India in 1985 when Procter and Gamble first appointed Madison to be their media AOR and soon thereafter and really soon in a few months Lever appointed Hindustan Thompson which later became Group M. Perhaps many of you or maybe most of you in this room do not know that the arrival of the media agency in India and unbundling as Anurag recalled just now it was the buzzword then created a storm at Three Years of Eye of which I was an executive committee member and we spent almost two years discussing at the Three Years of Eye platform and outside over innumerable whiskeys as to how to stop this unhealthy trend which had taken root in Europe and U.S. from taking root in India or from growing in India. But as they say you can't stop an idea whose time has come and ultimately Three Years of Eye gave up trying to resist this idea and in fact a few years later created a new category of membership at Three Years of Eye called Media Agencies. Today in fact media matters dominate our discussion at the Three Years of Eye Executive Committee to the extent that creative agency heads almost feel left out and don't want to attend Three Years of Eye EC meetings. When WPP's creative agency CEO or so I'm told protested to Martin Sorrell about this unbundling and the creation of Group M he's supposed to have famously said the toothpaste has left the tube and it can't be put back. Today I'm told media agencies contribute the highest amount of profits to global networks. I dare say media agencies have grown in importance over the years and this has happened not just because media agencies got lucky but because media agencies around the world and in India have kept up with the times with the changing environment the changing media landscape and responded adequately to meeting the advertisers ever changing needs and rising demands very often as many of you will agree with me unreasonable. If I am to track the pitch presentations made by Madison media every year to our clients and prospective clients I can see how every three four years and of late perhaps more often there has been a dramatic change in the content of our presentations as well as the composition of and background of the teams that present these. This was in fact sharply evident to me last week when I was present at one such pitch. Now the question that arises in my mind and I'm sure that is what provoked Naval and Anurag to pose this question is will the media agency of tomorrow continue to enjoy this preeminent position in the advertising and marketing industry in the near future. The answer to that I believe will depend on how open we are to further change and the speed with which we will respond to the rapidly changing media landscape and the rapidly changing needs of our brands in what is becoming for them a very competitive market. All of you know this but let me show you just two graphs on how a media landscape has changed so dramatically in just last five years. Traditional media and many of you have heard me speak on this at the Pitch Madison annual report in February every year. Traditional media was just 82% was in fact as high as 82% in 2017 and as now in 2022 is expected to come down to 63%. Digital has doubled in market share in the last five years and those of my friends from print and television and radio and outdoor industry sitting in this room will know how difficult it is to move a one percentage share point at a macro level in an industry and in that environment digital has more than doubled its share. Print on the other hand has come down from 35% to 21%. TV mercifully has held on but early signs of stress are surfacing with Bach registering a decline in viewership. One can complain about Bach figures as very often my media friends do and dispute them but as you know studies like Bach always catch the macro trends rather well. What happens in the West or in fact around the world is often seen in India a few years later and travel time is reducing by the day. This chart makes even more dramatic reading. Globally and I quote here walk figures because I believe they are the most reliable and independent source for us for global ad-ex. Their digital accounts for 56% of the global ad-ex of 881 billion. All of you know until recently we used to talk of a global market of 600 billion right under our nose and a few years even globally ad-ex has moved up to 881 billion. Significantly print globally is down now to just 6%. India and Germany are the last two bastions of print where there's a share of about 20% compared to the global average of 6%. TV once the dominant medium in the world is also down in the last five years from 39% to 29%. This is an interesting chart I've put together and I've not seen many others do this analysis put together to highlight that digital besides standing tall on its own feet at 56% has now penetrated every other medium and accounts for 20 to 30% of other media in print in the form of advertising on print titles web versions connected TV digital OH and digital radio. So really digital is all pervasive. It has now entered every medium and now every medium obviously is trying to introduce either separately or integrated with it a digital offering and mind you the global digital figures I've quoted here are standalone digital figures. If you added the print and OH and TV con TV part of digital into digital alone then the digital contribution I think goes as high as some 67%. Conventionally we've held the view that digital is great for bottom of the funnel and TV ideal for top of the funnel because TV is more cost efficient and better at brand building and creating the pull factor which ultimately helps in building large profitable brands whereas digital is a bit more expensive great at pushing sales which invariably is a bit more expensive though the results are more immediate. However with the rapid emergence of digital branding options and our two digital behemoths building a body of knowledge on what works in branding and what doesn't work on their platform in creative terms and opening more and more interesting options and offering products to advertisers to experiment with things I feel are bound to change. It is widely acknowledged now coming down to brass tax and the media agency in particular that traditional media has been simpler to plan for to buy execute and administer compared to digital media. The arrival of digital media and its rapid growth has indeed brought in a lot of complexity for media agencies. Planners and buyers of traditional media like TV print radio outdoor have shown considerable resistance to fully immerse themselves in mastering planning and buying for digital thus giving rise to the emergence and growth of standalone digital agencies or digital units or divisions of media agencies. At Madison World between the two agencies Madison Media and Hype Minds we have 685 media planners and buyers but there is still unfortunately a divide between traditional and digital with now almost 65% dedicated to digital. Even for very large accounts whilst there are integrated teams there still are digital experts within the teams. Let me now come to the heart of the matter and outline my thoughts on what media agencies and should do to continue their preeminent position. Now as we all know us is a people business and the most important thing for us is to have the right talent. It should be a matter of some concern to us to all of us that today none of us can afford to hire from the country's premier management institute the Institute of Management Ahmedabad. Look at this chart which shows offers received at the Indian Institute of Management Ahmedabad in 21 by business segments. Knowledge businesses like consulting, BFSI and technology account for 74% of total offers. We are missing on this chart and didn't we all think that we were also in the knowledge business British created ICS. I'm taking you back a long time to administer their colonies. The Indian government adapted that to create IS the Indian administrative service and the Tata group created TAS to generate a pool of people to administer and manage the growing Tata organization. We need to create mass a media administration service or whatever other name you fancy but to start with we need to get high quality at the core. The mass cadre of people as I said need to have hands-on work experience in advertiser companies and creative agency and some exposure to at least one of either a digital first business or PR or content or analytics. Once it will be difficult for us to start from scratch and create these people at entry level I think such people could join the media agency or we could hire them at mid level with a fast track to the top. This is because I believe at the CXO level at our agencies we need people who fully understand branding how it works more equally importantly brand finances and other such aspects that concern a CMO and CEO in advertiser organizations. This is required and necessary in today's fast-paced world to adequately back our recommendations on spending millions and millions of rupees to our clients. I believe it will not be enough in the near future to be a media expert as you begin to occupy higher levels in the agency. Of course we need to hire data specialists, data scientists, martech professionals and content creators at entry level. We need to have a mix of both math men and mad men and critically we need to move to integrated planners who are totally conversant with the opportunities and digital and digital benchmarks on CPM, CPC, CPV and whatnot and all the other opportunities that digital can offer. Perhaps for this engineers are better suited and we need to tap engineering colleges equally we need to expose our digital planners to the vast body of knowledge that planners of traditional media have acquired over the years. Our trainees from day one need to be exposed to all media traditional digital outdoor and activation. In our agencies we need more cows and less milkmen. This is not my original phrase but a phrase used by David Ogilvy many many decades ago when he saw that agencies were beginning to hire more and more fancy account executives than creative people and media experts. He cautioned his agency management that look you're making a big mistake. This in my view if you're to heed that advice we would make way for a leaner, meaner organization with higher capacity to handle more business at more competitive rates and good profitability hopefully which clients will love. Let me briefly talk to you about financials. I know possibly agency financials do not concern many of you but here is a chart that plots the gross margins of some sectors like insurance, restaurants, entertainment, broadcasting, IT services, cable TV and of course advertising. No surprise that advertising is on the extreme left and has the lowest cross-profit margin of 26%. As this chart shows lower contribution results of cost and lower revenue. As you can see in this chart, Accenture is in the right hand top corner high on both gross revenue and gross margins whereas agency networks are at the middle level in terms of gross margin but extreme left in terms of gross revenue. So tells me that agency networks do a hell of a lot of more work but for very little to gain in return because of this the market cap of say a consulting company like Accenture as this chart tells you is 15 times that of agency networks and agency networks trade on the New York Stock Exchange at a multiple of 10 to 13 whereas Accenture at 25. Now whilst it's true that we are in the people business I feel we also need to standardize processes, automate them, convince our clients that when they come to us this is our standard format, this is our standard way of doing things and you have to follow our way. We can't be creating a different system and a different format and a different way for every client who comes to us. We need to harness technology and artificial intelligence to replace as much as possible human talent and use that scarce human talent only when technology can't help. There was a time when the bedrock of advertising was insights unearthed through quantitative and qualitative studies. Today and tomorrow we need to master the art of uncovering insights through data mining. Take a look at this interesting chart I have which gives you the top 10 most valuable brands of the world in 2007, 17 and 22. Notice that in 17 and 22 all the brands that dominate this list all without exception are those brands with one thing perhaps in common and that is they collect more first party data and mine such data to uncover insights to develop cutting edge strategies. At one point it was thought that global learnings are the most valuable thing going in the world and they can be used in any market which would provide great competitive advantage to their owners. Many multinationals who entered India discovered to their peril at great cost that this was a fallacy at least in a diverse multicultural country like India. Local insights of course are inevitable. I was delighted to read recently the thumbs up a local brand launched 45 years ago in 1977 and then acquired by Coca-Cola is still going strong and now a billion dollar brand indeed a tribute in my view to the pioneering spirit of Chohans of Palais and their product development and marketing genius. When I started Madison way back in 1988 my belief was that a good agency is a small agency with a few large clients and I dare say I stuck to this belief for a fairly long part of Madison's life but today we have to recognize that the world has completely changed small is no longer beautiful large is so indeed we need to scale up the mushrooming digital agencies in India could consider mergers amongst like-minded people to retain their entrepreneurial instincts and yet achieve scale which will help them attract talent invest in talent other resources technology and data I will not be surprised if after the aborted initiative of merging Omnicom with publicists with some of you may remember there is another effort somewhere sometime soon since the need of the R for networks is to reduce costs on milkmen and administration reduce debt burden and invest more and more in technology as we need as we know there is a need to invest in talent and technology to reinforce and improve our capability there is of course a simultaneous and growing need to increase our profitability because only then can we improve our delivery and improve our ROI to our clients but I don't expect nor should you our clients to help us in this process in fact in the last decade I have noticed that since they can't do too much about prices of sugar or milk or steel or oil or whatever other raw materials they use which in most years have inflated they have found it expedience to expand the scope of their procurement teams to agency fees and media costs in the process stunting agency talent pools to my mind we will have to learn to fend for ourselves we are ourselves to blame for the situation we are in because I believe we have forgotten to say no to clients it's not the client's fault that he wants lower and lower commissions give lower and lower increase in fees and whatever else because if we don't look after our own business priorities nobody else will to me agency profitability is more important than market share for agency for agency sustainability and growth in fact growth of the entire industry in my view I ask you a question my view is obvious is it better to be the world's largest agency with poor profitability or better to be the hundredth largest or the tenth largest in a market but with good profitability profits are essential not just for the promoters and shareholders but for the agency to invest in expensive resources and technology so that it can remain competitive and survive and grow and not allow somebody who is more resourceful to take over the business see the story of Infosys and G I believe it is very relevant to all agency management at one point in time in the maybe in the 90s Infosys had become over dependent on G and a third of its revenue came from G G continued to put downward pressure on rates to Infosys Infosys took the courageous move to say no to G and then what happened did Infosys collapse no as we all know they in fact went on to become bigger enjoy better margins than their competitors over the next decade and you know what G continues to be Infosys client another point for too long advertisers and their consultants have held us accountable for output like rates cprp grp reach frequency and whatnot I think the time has come where we should consider making the bold move for taking responsibility for delivering outcomes initially in terms of increase in brand health parameters but ultimately in terms of sales this to my mind is not just risky but complex to arrive at a fair attributable system to agency actions but I should think in today's technology backed world it should not be impossible this I believe would pave the way for better remuneration and bringing us closer to the top table India as we all know is the land of entrepreneurs and there are millions of small businesses in India who are profitable and growing at least 10,000 or 20,000 of them are candidates for becoming our clients in the near future many of them reside in metros but equally many reside in the top 50 cities in India the real power of India lies with them take a look at this chart I can't vouch for its accuracy but I believe directionally it is correct google derives 60 percent of its revenue from 30 lack such advertisers not from our clients I don't know if they can even be called advertisers today or we will recognize them as advertisers but remember at one time nirma gadi viko all of them were only on the fringes of advertising till they burst on the doodh darshan screens and monopolized that times chitra hard full kill a high gilshan gulshan and the sunday feature film and thereby built large businesses for themselves which are thriving even today even if we don't go down all the way down in this chart there are 35,000 advertisers who contribute 20 percent to google's revenue we should think of how we can tap into many of these and convert them to our clients and help them grow their business not only will we be helping ourselves we will also be helping speed up india's race to become a five trillion dollar economy and now let me come to my final point and i'm glad even anurag referred to it in some way what's in a name you may say we should know quite a lot indeed given the length and breadth and the comprehensive almost end to end services that most media agencies offer and we are continuing to expand the scope of these services and even entered the creative area i believe we should substitute the word media in media agency with the word marketing and since media continues to remind us especially on the three is the why platform when it comes to sequential liability that we have guys principle to principle agreements with you i think we could consider substituting the word agency with company or consultancy don't you think if you're called a marketing company we would move closer to the top table attract more diverse talent attract more clients and hopefully be remunerated better thank you guys for listening to me