Opinion

Q&A with outgoing IPG Mediabrands boss Prashant Kumar: There has never been a golden age of advertising, we were never that relevant – that age is ahead of us

Prashant KumarPrashant Kumar recently stepped down after 13 years at IPG Mediabrands, where he was president, Asia World Markets and Malaysia CEO.

In this exit interview, Kumar tells Mumbrella about why he left IPG Mediabrands, what has changed most about media and marketing over the last 13 years, and what sort of agencies will survive in the future at a time of massive change for the industry.

So, why after 13 years at IPG, did you decide to call it a day?

Because of the 13 years. It’s my entire career sans a few early years. It’s a long time for somebody of my generation to spend at one company. I just turned 40, and felt that if I don’t leave now, I may get too comfortable.

Was it your decision or were there other issues at play?

It was 100 per cent my decision.

It did cause a good amount of surprise internally and externally – as most people felt I was sort of wedded to IPG. Also some wondered naturally, why at this point, when everything was going so great – we just had our best year regionally as well as locally. I had a great time at IPG – gave a lot, got a lot. And I am really grateful that the company really pushed a lot of boundaries to try retain me.

However, it was one of those decisions at the cusp of rational and irrational. I have always thrived on uncertainties, new challenges, and bold risks and ultimately my wanderlust prevailed. You could call it the onset of a midlife crisis.

You are sure to be a man in demand – what are your plans now and have you had any discussions about joining or consulting to other players in the industry?

The short answer is – I have not decided yet. I’m planning to take a few months off after the relentless obsession the last 13 years have been. Taking stock of life, being grateful, clearing my mind, detoxing my body, reading some favourite books again, trying to unlearn and relearn.

I have had a couple of great conversations – some really interesting ones – and we are talking with timelines in mind.

I imagine this industry is in your blood, so are you planning to remain in the industry or will you be seeking a challenge in a completely new sector?

There is no doubt that I continue to love and believe in this industry, as much for what it could become, as for what makes it interesting today. However I think the industry definition has expanded a lot in the last five years. And today a lot of what is exciting in our world, is happening around our industry. I definitely intend to be somewhere in the marketing services ‘ecosystem’ – somewhere at the cusp of data, technology and storytelling; somewhere doing my bit to help reset our industry from within.

Over the past 13 years, the industry has certainly changed – but has it changed for the better or worse?

I am a stubborn optimist, and I choose to see opportunity. If you see opportunity, you can bring the force of conviction that the execution requires. And the market has been generous to me so far.

There is no doubt that there have been some powerful disruptive forces building up. The lines between Silicon Valley and Madison Avenue are blurring fast. Fuelled by speculative gazillions, the tech industry is prowling at the gates. And easy money is not so easy to come by.

It’s not rocket science that in any respectable business, sustaining good margins requires evolving the value proposition continuously. What’s worth paying for today, won’t be worth it tomorrow. Margins live at the cusp of now and the next. You either have to do new things, or do them differently.

People are living their lives through media today. For many their mediated lives are as important if not more than their real lives. Media has never been so important, and hence marketing and communication has never been so important.

Communicating has become living, to a large extent, and we are in some ways at the centre of it.

I think today everybody from Adobe, IBM, Salesforce to Deloitte, McKinsey and Accenture to Google, Facebook and Twitter see our business as a huge opportunity. We ought to be sitting on a gold mine. I have seen industry veterans talking about the golden days of yore with wistful nostalgia. I think there never was a golden age. Our industry has never been that relevant to the wider world. But I do think the golden age for our industry lies ahead of us.

What have been the major challenges for you (and IPG?) during your 13 years and how did you (and IPG) adapt?

Thirteen years ago, I was a media manager; my challenges were much humbler. In the last eight years as a P&L leader – locally and regionally, probably the biggest challenge for me has been how to manage the investment cycle and the risk profile, balancing the current year’s margins with the margins and growth of the next two years, and the next five years.

I know that sounds boring, but built within is the need to have a coherent mid to long term vision, and a slew of offerings to serve that vision, and the new mix of skills to bring alive those offerings.

We haven’t always been right, but we have been agile. If you listen to the market, it listens to you.

You have said in the past the industry is in a “transitional mess”. Will that transition ever be completed? And will everyone survive the transition?

By everyone if you mean global networks, I do believe they will survive. Most networks are designed as a cluster of sufficiently autonomous units. Within those units lie the smaller mutant entities that can evolve faster than others. Plus some groups are making interesting acquisitions, which can potentially serve as catalysts.

There will be instability and some of today’s giant agency brands may not remain so big, and there may be more M&A, and rankings may change. But holding companies will be around, mostly. Their ability to survive is underestimated. (Google engineers have no idea how difficult it is to handle a thousand art directors’ egos and impatience at such modest margins).

As for other players, we already see a couple of generations of players rise and then perish or morph into something else. Digital media resellers have vaporised. Ad networks used to be a big thing, now they are fading. There is a glut of demand-side platforms out there, but not many will survive. You have got to be a bit of an ace surfer to keep riding wave after wave, making money through it all, and finding an opportune exit.

Will the transition ever be complete? No. And I am glad. In fact the future is changing at a faster pace than before. Some are calling it the third industrial revolution. And we haven’t yet entered its teen years yet. It’s a lot of fun if you are curious.

How do you see the future for the IPGs of the world? A struggle or are there huge opportunities?

As I mentioned I am optimistic about holding companies in general, but cautiously so. Struggle and opportunity are best friends. Struggle creates opportunity, and opportunities demand struggle. More boldness is needed as much as leaders with the conviction and talent to pull it off.

Somebody suggested that holding companies go private in order to have more freedom to take risks. It’s clear that leaders need more freedom to break and remake. And you need more leaders who really get it.

IPG is a fantastic company, and I am a huge admirer of Michael [Roth, chairman and CEO of IPG] and his leadership style – highly professional, empowering, focused and credible.

Philippe [Krakowsky, global chairman], Henry [Tager, global CEO] and Jeff [Jeff Lupinacci, global CFO] are rethinking IPG Mediabrands. UM just had a fabulous year under Daryl Lee’s [global CEO] leadership. I believe that they are acutely conscious of the opportunities, and have a very smart approach to making the best of it.

Who will be the major competitors to the traditional agencies in the future?

It’s a tough question. Holding groups today differ in more important ways than they did ten years back. There are some bold experiments going on at scale – for example, the Sapient assimilation [with Publicis Groupe], Xaxis’s positioning and R/GA’s proposition – and how dramatically these experiments will affect the core of our industry depends as much on their strategic sense as on the quality of execution.

There is competition from the technology end in the form of marketing automation systems. There is competition from the data and tech end from the Silicon Valley giants, determined to convert their rich trove of data into handsome premiums for their walled gardens. There are consultancies, which bring enterprise-level credibility, strong left-brain skills and strategic approach to own the lower-funnel categories and campaigns in a highly centralised way.

I think we will see a lot more diversity among the agencies of tomorrow. Some will be a lot more focused, mainly on right-brain big ideas producers. Some will fight their battles on many fronts, in collaboration with tech and data players. Others will focus on specific niches – say, building experiential utilities for brands. Media agencies may similarly take a variety of approaches to the future. However, Adobe and Accenture are two good reference companies to look at as potential frenemies.

I think it’s smart to not be all things to all clients. Ultimately what matters is who can command the maximum share of the value created in the demand chain, and at what premium. And that doesn’t have to be about everything that is there to do, but what really matters.

What work/accomplishments are you most proud of at IPG?

Let me split that into two roles – Regional president for four years (nine markets) – and Malaysia of which I was CEO for the last seven years.

At the regional level, we had excellent growth driven by the Agency of the future initiative, as well as stronger local markets. We won the largest pitch win of 2015 – Johnson & Johnson across APAC; we became the largest agency for Reckitt Benckiser, and expanded our footprints with Yum. Markets such as HK, Taiwan, Korea and Singapore saw a significant turn around. On both a product and commercial level, we have come a long way from where we were four years back. Malaysia and Thailand stayed very strong, and the Philippines has made a great new beginning.

Under Agency of the Future, we launched Rally – our social marketing services, Ingenuity – the digital commerce studio, and Ensemble, which delivers next generation content and creative services. Rally, after great success in the region, was rolled out in several countries in Europe and Latin America. Ensemble has become a strong force in a few markets (thanks a ton for the loads of Mumbrella Asia awards. It also won big at Festival of Media Asia). Ingenuity seeks to find a media agencies’ place in the future of shopping, and has received accolades – both commercial and reputational.

In Malaysia, we grew by eighteen times over seven years – from ranking ninth to second largest – winning five times agency of the year at Malaysian Media Awards. For the last two successive years, we are the number one agency in the world, as per RECMA, among the 900 agency offices it collects data on, across 18 different criteria. Last year we grew the fastest. We are incredibly proud that despite the market’s small scale and scarce talent pool, we managed to pull off all of this, and year after year.

I was blessed to cobble together a bunch of oddballs bound by an indomitable passion, unflinching mutual trust, relentless commitment and above all, shared wonder at what our world was coming to. It’s a very special story.

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