Trends 2020: Globally, the days of runaway growth are over - Ashish Bhasin
There are several exciting developments and trends anticipated in the advertising and media industry in 2020. Ashish Bhasin, CEO - APAC and Chairman - India, Dentsu Aegis Network, lists some emerging trends and their long-term implications for the industry.
What were the key developments that took place in advertising and media in 2019?
In the past, there was scepticism and people were still experimenting with digital. But 2019 made it clear that going into 2020, digital is going to be a critical medium. By 2020, it will be the second largest medium in India, outgrowing print.
While there has been a slowdown of growth rates from earlier rates, even so, digital continues to grow at 2.5X times the rate of traditional media at 25 per cent. 2019 was the year in which the Indian advertising industry touched the $10-billion mark in ad spends and typically such markets are deemed as major markets globally. There is still a lot of headroom for growth in India because we are a growing economy and underweighted in terms of advertising per capita.
There was a wakeup call this year for the old world, dinosaurish creative agencies which were still making 30-seconds TVCs and 100CC ads, that the world has changed. Since the market grew much slower than anticipated, when the tide went out, they were caught unawares. The year 2019 marked the beginning of the end for such creative agencies, many of them giants of the past era.
Could you share an international and Indian perspective on the emerging advertising trends in 2020?
Globally, the days of runaway growth are over and clients are demanding efficient ways of doing business. In many senses, our One P&L model implemented at DAN India and in other countries is where it is all coming back to. Clients are fed up of working with different silos in agencies and want the benefits of specialisation without coordinating with several silos.
Both internationally and in India, we are grappling with the quality of talent coming into the industry. I fear the quality of talent leaving advertising is better than the quality of talent entering advertising, and 5-10 years from now this will be a major issue.
India will be one of the only remaining major markets in the world where all media still continue to grow, albeit at different rates. Print has tanked and TV is beginning to slow down in most Western markets. That’s not true in India, where we are seeing some form of growth in all media, albeit at different rates.
The one P&L model allows us to offer different specialties under one umbrella, which is going to be the key. The best testimony is that all of our competitors have begun to copy the same model under different names. We have the prime mover advantage and intend to make the most of it.
What will be the theme for 2020 and why?
Video, Voice and Vernacular will continue to be the theme this year, as the calendar year may have ended but consumer behaviour does not change. These three are going to gain a lot of prominence this year.
Video will be big because data consumption is growing so rapidly, whether you look at OTT or the cost of data coming down. Voice, because that’s a global trend particularly in search and performance and most agencies don’t have a Voice strategy or know how to monetise it yet. Vernacular, because you cannot communicate only in Hindi and English in India and get away with it. A lot more digital communication will start becoming vernacular.
What issues do you want the Indian ad industry to resolve in the coming year?
As far as digital is concerned, we have still not arrived at a common metric and an agreed currency. That’s an inhibitor for growth and I am hopeful that in the next two years this will be resolved. The consumer is watching content and doesn’t care about a 3-inch screen, a 13-inch screen or a 30-inch screen. It matters less where they watch content as consumers are moving seamlessly across screens.
As an industry, all of us are guilty of poaching talent from each other, but we haven’t done enough to grow the talent pool available. The quality of people we are able to attract and retain today is often not what it should be and that’s an important area we need to focus on.
Will legacy organisations catch up by undergoing digital transformation?
Being digitally ahead is the single greatest advantage that DAN has in India and I hope we can continue to maintain that leadership for many decades to come. In 2019, one-fifth of the Indian market was digital, but it accounted for nearly 47-48 per cent of our revenues from India, which is almost half. Our DAN India team of 3,800 professionals has 2,100 people who are digital experts. We are 2.5X times of our competitors in size, in terms of search and performance and no other network can boast of having half of its revenue coming on the back of digital. This decision on being digitally overweight has been one of the best decisions that we took and has held us in good stead in these times when the growth has been slower.
An organisation needs to have digital in their DNA. In a couple of years, there is going to be nothing like a digital agency. Any agency that does not have a digital DNA will perish because the client is not going to say create digital advertising or create traditional advertising. The consumer does not see it that way.
What will be the challenge posed by entities such as Accenture Interactive?
Many people in the advertising world see the consulting firms as a threat. I look at it from a different perspective, because in India clients do not pay you for making a PowerPoint presentation, they pay you for implementation.
These entities are unable to execute at scale at the rate and price we offer, because their cost structures are very different. As advertising agencies, we have mastered implementation at scale, at a very low cost. It will be easier for us to go upstream and grow our remuneration and eat their sandwich than for them to come down into our area, as far as India is concerned.
We launched DAN Consult a year and a half ago keeping in mind that it is much easier for us to go upstream to eat the consultant’s lunch than the other way round.