Havas India eyes to break into top 5 markets in 5 years: Peter Mears, Global CEO, Havas Media Network

Delhi: Peter Mears, Global CEO of Havas Media Network and Chairman of Havas North America Village, expressed high optimism about India's potential to rise from a top 10 to a top 5 market for the agency within the next 5 years during his recent visit to India.

Highlighting the agency's strategy to achieve this goal, Mears outlined key focus areas: optimising the core product of media planning and buying by leveraging AI to enhance and improve it; refining the acquisition strategy; developing Havas Play; and launching the CSA data practice in India.

In an exclusive interview with BestMediaInfo.com, he mentioned, "While digital advertising expenditures are surpassing TV globally, what distinguishes the Indian market is the resilience of linear TV.

“It's too easy to say that TV is dead. That's not the case in any market. However, the way Indian consumers engage with TV is evolving. We're witnessing the rise of connected TVs, blurring the lines between digital and traditional television. This trend will likely continue both globally and here in India,” he said. 

Mears further said that Havas Media is increasingly engaging in discussions with clients about alternative compensation models that are not commission-based but rather outcome-based.

He further spoke about the impact of e-retail advertising on the overall digital landscape, possible solutions to decreasing agency commissions, selling media experiences and much more.

Excerpts:

Today, many clients are not only focusing on e-commerce or retail advertising but are allocating 70% of their digital ad budgets towards this area. How will this impact the agency business and the broader digital landscape?

The way consumers shop today is very different from how they shopped before the pandemic or even five years ago. An incredible statistic shows that this year, 20% of all global retail will be conducted through e-commerce channels. The e-commerce explosion drove us to launch Havas Market in 2020 because navigating the e-retail space requires a different approach, skills, and knowledge.

Havas Market is now operational in over 20 countries globally and has become a crucial tool that we leverage on behalf of our clients. E-commerce will continue to grow and will become even more important as a channel for us to consider.

More and more digital platforms are evolving to offer shoppable features. Therefore, social commerce is an area that we've really invested heavily in.

How will this brand's focus on e-retail impact brand-building exercises?

The distinction between brand-building and performance-led marketing has become increasingly blurred in recent years. We're engaging in more conversations with clients about linking all brand messaging to specific performance-based metrics. Moving forward, the separation between brand building and performance-led marketing is likely to be less prominent than it has been historically.

India is the only large market witnessing the growth of digital and traditional mediums together. In your estimates, how long will the India market be able to operate differently in comparison to the other global markets?

This trend will persist for at least another five years. It's interesting to observe how the Indian market behaves differently compared to the rest of the world. While digital advertising expenditures are growing globally, what sets the Indian market apart is the resilience of linear TV.

It's too easy to say that TV is dead. That's not the case in any market. However, the way Indian consumers engage with TV is evolving. We're witnessing the rise of connected TVs, blurring the lines between digital and traditional television. This trend will likely continue both globally and here in India.

Linear TV's resilience in India can be attributed to the country's diverse geographies and the distinct populations served by local TV. 

The agency commission has been reduced to as low as 0.25%. Is it a global problem? How and why did the network agencies allow such a level at which it became almost difficult to operate? How would Havas beat the commission challenge?

It's not solely about network agencies allowing this to happen; it reflects the reality of a dynamic marketplace. Clients increasingly demand more from agencies, often seeking greater value at lower costs. However, I don't view this as a problem; rather, it's an opportunity for us to enhance our service delivery and better assist clients in achieving their objectives. If we're instrumental in driving meaningful business outcomes for them, then we deserve appropriate compensation for our efforts.

We've been engaging in discussions with clients about alternative compensation models that are not commission-based but rather outcome-based. If we’re delivering value to clients, then we should be compensated accordingly. Many of our arrangements in key markets involve outcome-based compensation models, which differ significantly from traditional commission structures.

This approach to remuneration will likely become even more prevalent in the future. We've emphasised meaningful business outcomes for several years now. Meaningful brands achieve greater success. Therefore, if we contribute to meaningful business outcomes, it's reasonable to expect compensation for that impact. We're actively exploring ways to restructure our compensation to better align with the value we bring to our clients's businesses. This represents our vision for the future.

Reducing commissions has also forced an agency network to position itself as a consultant. How do you wish to position Havas Media? 

I don't have an issue with labelling us as a media agency. The definition of a media agency today is vastly different from what it was 10 years ago. We are focused on generating meaningful business outcomes for our clients. Being recognised as a media agency within that context is a powerful position to hold.

Are media agencies overselling experience? Some selling customer experience while you talk about media experience. How are the buyers, who are your clients in this case, reacting to your experience offerings?

Media experiences are a crucial differentiating factor for us. To enhance our media experience offering, we introduced Havas Market to integrate experience with commerce and Havas Play, our culture, content, and activation agency, to bring experiences to life. We are fully delivering on our promise of creating meaningful media experiences, and clients are responding very positively to these initiatives.

India has shown resilience amid global macroeconomic challenges. Do you believe there is increasing pressure on the Indian market from global advertising networks to offset revenue losses caused by declining ad spends globally due to recession, conflicts, and other macroeconomic challenges?

During my last visit to India in 2018, we internally discussed strategies to drive growth in this market, considering factors such as rapid population expansion, the development of the upper middle class and middle classes, increased broadband access, and technological advancements in this market. We identified this market as a significant opportunity for Havas to make strategic investments and expand our business presence here. Over the past five years, we have made several acquisitions, including the recent acquisition of PivotRoots last year. These acquisitions have been highly successful, contributing to the growth of our business. Additionally, we have experienced organic growth within our media, health, and creative divisions. We are committed to sustaining this growth trajectory. The work coming from this market is of top-notch quality and the best in the world. 

Are there any upcoming acquisitions planned, and if so, in which areas of specialisation?

We are consistently discussing potential opportunities in India and remain active in global mergers and acquisitions, particularly focusing on performance, e-commerce, content, activation, and data.

Where do you see Indian operations’ contribution to your global business five years from now?

India has become one of our top 10 markets, which was not the case five years ago. We anticipate sustained growth across all our divisions and are highly optimistic about India's potential to transition from a top 10 to a top 5 country for us in the next 5 years.

What are the goals you and your team in India have set for 2024?

The KPI list for the Indian market is very clear. Firstly, we remain focused on optimising our core product of media planning and buying by leveraging AI to enhance and improve it. Much of the work we've done in India through our centre of excellence has been incredibly beneficial, not only here but also globally. Secondly, we are continuing to refine our acquisition strategy. Thirdly, we are developing Havas Market and CSA, our data practice offering that will be launching next month in India.

For the record, CSA represents Havas' global brand within the agency network, focused on accelerating client understanding of customer data and enhancing ROI through analytics and machine learning solutions.