I believe the worst is behind us – Why Tarun Rai is so bullish on the future?

Three words that best describe Tarun Rai, Chairman & Group CEO, Wunderman Thompson, South Asia, would be –  Positive. Driven. Motivator.

An advertising and media professional with over 25 years of experience, Rai returned to the Group after a seven-year stint at Worldwide Media, a BBC Worldwide-Times of India Group JV. Under his leadership, Worldwide Media grew exponentially from just four magazines in 2008 to 15 consumer and six B2B magazines by 2014. In his prolific quarter century in the advertising and media industry, Rai has helped build some of India’s most iconic brands, including those of Hindustan Unilever, Diageo, PepsiCo, Hero, Nestlé, GSK and Godrej.

Also read:  Tarun Rai is Chairman & Group CEO of J. Walter Thompson South Asia

In today’s dynamic and fragmented communication landscape, Rai believes building diversity in capabilities and offerings combined with a ‘digital-first’ approach is key to meeting clients’ business goals.

In this exclusive conversation with Adgully, Tarun Rai’s optimism shines through as he speaks about how Wunderman Thompson has stayed resilient through the pandemic period and lockdowns, how the economy and the advertising industry can be resurgent, digital strategy at the heart of operations and the road ahead.

It’s been 7 months now since the COVID pandemic hit the world and India, and all the projections for AdEx that had been made over the last year and the beginning of this year have gone all awry. How do you view the current scenario for the advertising industry and what are the headwinds that you foresee for the industry? In your opinion, how long will it take for things to see a semblance of normalcy?

What started off in India as a three-week lockdown has got extended, in one form or another, to seven months! We have gone through phases of lockdown 1, 2, 3 and then Unlock 1, 2... but at the end of it, now restaurants, malls, cinema halls, gyms are being allowed to reopen in parts of the country, of course, with strict COVID-19 guidelines. The good news, if at all there is good news in this very tragic period that we have gone through, is that consistently we are opening up as an economy – it might be slow, it might be patchy, it might have some spikes and it might have some weekend lockdowns or some other kinds of lockdown, but generally speaking, the economy is opening up. So, the trajectory is of opening the economy up, despite the fact that we have not conclusively flattened the curve.

India is a big country, what was initially a problem of our metros, today is a problem of our Tier 2 cities. So, it’s not going to go away, it’s not as if one day we will wake up and it will be gone – that’s not going to happen, but I think the general sense is, and what I believe is, that the worst is behind us. And when I say that the worst is behind us, I mean it both from the economic front as also in terms of people’s psyche and the immediate panic and fear that this virus had brought about, has evened out. How long can we keep living in fear? We should still be very careful, we should still wear masks, we should still maintain social distancing, wash our hands often, but we need, as an economy, to get on with it.

From the industry perspective – and as you know we are a derivative industry – if our clients’ business is not doing well, before they shut their production lines, they will cut their marketing budgets. That is pretty clear. So, the entire industry has gone through a very difficult time, and the other reason it’s been difficult for us is that in terms of opportunities to save costs, we are unlike many other industries where they have various options and opportunities to save costs. 70% to almost 75% of my cost and our industry’s cost is people costs. We don’t like to refer to them as costs – we would like to refer to them as assets – but that’s all we have. So, when somebody says that you need to cut costs, it means losing our people and that’s something that we don’t want to do. Therefore, for us, it is, in a sense,  a double whammy – our revenues have come down and we don’t have too much play in terms of saving costs. So, it has been a difficult time, but as I said, it has taught us a lot of things and the worst is behind us. Whenever I am asked if the situation is better, I tell them May was better than April, June was better than May, July is better than June...and that’s how we are looking at it. I refuse to compare with last year, because last year and this year’s comparison doesn’t make any sense – we didn’t have a global pandemic last year. All we can say is, directionally, we seem to be going in the right direction, and with the festive season we are going to see more improvement in the coming months.

According to you, how long will it take for things to return to some semblance of normalcy?

I wish I had a conclusive time frame, unfortunately I don’t, and I don’t think anybody does. However, recently  the Chairman of Maruti Suzuki said that this festive season, the sales of Maruti Suzuki will be as good, or even better, than this time last year. So, while I loathe comparing our performance of this year with last year, the Chairman of Maruti Suzuki has said that auto sales are going to be back. And remember, in April the entire industry could not sell even one automobile. So, from those bad, dark days, we are in a situation where the chairman of the largest car manufacturing company is saying that this festive season may even be better than the 2019 festive season.

It’s anybody’s guess as to how quickly we will recover, all I can say is that cricket is back, which itself is a mood uplifter as well as a sign that brands are willing to start spending again on sponsorships. We may have different kinds of sponsors this year, a lot of new faces have joined the sponsorship bandwagon, but they are there. The timing of IPL is coinciding with the festive season, and on top of it, there is pent-up demand which has still not been satiated completely. So, given the combination of these factors, I am pretty bullish, optimistic that this festive season is likely to be a pretty good and robust festive season.

So, how long it will take for this pent-up demand to get satiated, will it continue into the first quarter of 2021 and the entire year, is anybody’s guess. But, as I said, the trend seems to be positive and I am of the opinion that the worst is behind us. Besides, given a choice I’d rather be an optimist than a pessimist. And when I speak to our clients – barring a few industries like aviation and retail, which are taking a bit longer to recover – I think overall the mood is upbeat. As I said, there are two reasons for this optimism – one, the economy is opening up and second, as people, as companies and as brands we are pretty resilient. And once we have got used to the fact that this is not going to get over in weeks or months, we have found different and innovative ways to get on with it, to reach our products to consumers and communicate with them through different means. We have been pretty innovative and resourceful as time has gone by.

You have spoken about the learnings that you’ve had during this period, could you share some these learnings and how these are going to help you plan your future strategy?

My biggest learning was reinforcement of what I believed about my company and about our people. We are one of the biggest in India and South Asia, and to move this entire huge organisation into work from home mode within 24 hours, to me, was a remarkable reinforcement of what I believe our company is.

The second thing is about our people. I have always believed in flexible working hours and I have never put too much of an emphasis on people reporting to office on time, punching cards as I have always focussed, rather,  ontheir output. But having our entire staff working responsibly from home, collaborating with each other, supporting each other, maintaining quality of work, keeping their motivation up… despite the very anxious time we are going through, was certainly a revelation. I am truly proud of them.

How do you see the agency-client working relationship, agency-client association and collaboration in the future? How have the learnings and experience of the past few months during the lockdown changed the partnerships for the future?

A crisis either breaks relationships or it brings you even closer. What I have seen in the last six months, despite being difficult times, our relationships have become stronger. We have got clients from every sector, some of them like FMCG, pharmaceutical and IT, were not as badly impacted as others. Those certain others are aviation, hospitality, retail, auto, and we had a lot of clients from these sectors too, where our partnership required us to give them the right strategic advice, even if their budgets have reduced. To find innovative ways to keep the dialogue with ‘consumers open’. While companies and brands have been challenged by the pandemic, consumers have been challenged even more. Brands just can’t disappear and hope that your consumers won’t abandon you, because then when you don’t have any dialogue for consumers for six months, why would they want you back in their lives when the crisis is over?

For me, it has been an interesting journey of how the strength of the partnership actually come to the fore when you are tested, and this time, we were tested by a global pandemic. I am very happy that just about every one of our partnerships stood up to the test.

Could you share the new client additions that Wunderman Thompson has done in the last one year? As you said, you haven’t lost a single client in your portfolio, have you added new clients during this period as well?

Yes, we have. Even in the last six months, we have won 50 new assignments. The number seems rather large, but we also have many offices and many companies within our group. So, as a group to have 50 new business wins is really impressive and I think the reason for this is that these 50 new businesses are, not necessarily, only the ones that we have got in competition with other agencies. There are lot of projects from tech and digital, from design and data that we have won against new competitors. The opportunities to pitch for new business, for us,  have multiplied beyond just the advertising business.

You have spoken in detail about how the transition has come, work from home has been there in Wunderman Thompson and how the agency has been encouraging working remotely. The new normal also calls for a lot of skill upgradation, how are you helping your workforce in building skills by providing them various opportunities?

One thing that this pandemic has done is to collapse two years of tech adoption into two months. Everything has got accelerated, which is why if our people’s skills do not keep pace, we have an issue. Our people realised that they need to fast track their skill upgradation and we, as an organisation, realised that this is an opportunity to invest in our people’s skills through on-line training and that would be very receptive. We actually ran 80 online programmes for skill upgradation – 80 training programs in 6 months! And what amazed us is that we got around 80-85% participation level, which was terrific and unprecedented.

What has been the situation in the brands’ side, how has Wunderman Thompson been helping drive the technological capabilities of their clients, especially in India?

The pandemic took everyone by surprise. I remember being at an industry party in February, where there was some talk of a flu-like virus in a remote place called Wuhan. It was, at best, disrupting some of our clients’ supply chains. And then, withing a few weeks it was a problem for the entire world. The speed with which the pandemic travelled was incredible. And in India, we had a national lockdown by March 25. For our clients and their brands, there was a lot to grapple with and understand. And we acted as how partners should. Being a global company, we had access to how companies and brands were responding to the crisis in other countries. We shared that knowledge with our clients and gave them strategic advice on how they could navigate these turbulent times. Wunderman Thompson also has diverse capabilities in data, digital, technology and e-commerce. All of these capabilities were, now, in high demand if consumers needed to be reached. Conversations on these subjects that had been initiated before the pandemic were now very urgent. And for our clients, to be able to talk to just one partner for all these needs was certainly an advantage.

Finally, how has your growth been like? How are you recalibrating growth for 2021?

So much depends on how quickly we can solve the health concerns of people. The best way, of course, is to have the vaccine. But one thing is clear, the effects of the pandemic are going to be felt next year too. Overall, I am hoping that we could go back to the numbers we posted in 2019. The more interesting development, though, is where this revenue is going to come from. I think the mix of our clients’ spends is going to change dramatically. Technology, digital, e-commerce, will play a more significant role than ever before. The trends were already visible, but the pandemic has accelerated those trends. And we, because of our diversified capabilities, are in a sweet spot to provide solutions to our clients in these new areas. So, it is not just recalibrating growth, but also recalibrating our offering to our clients. And, by doing so, improving our growth projections.