Sir Martin Sorrell on BrandZ, media measurement, Indian cricket and more...

Sir Martin Sorrell was in Indiafor BrandZ, WPP’s study of the Top 50 most valuable brands in the country._Storyboard_editor Anant Rangaswami caught up with Sir Martin, to understand hiswhere he sees BrandZ’s Indian edition going in the next five years, his views on media measurement, and whether Indian cricket is having its ‘Manchester United’ moment after its loss to England in the recently concluded test series.

Read what he had to say, below or watch the interview for more…

Storyboard: You are in the country for BrandZ, so let’s begin with that. What would you like to come out of BrandZ in the next few years?

Sir Martin: Would like for people to understand that great brands breed success, and that investment in brands is actually just that - an investment - and not a cost. That is a terrible view that has been driven by finance and procurement. As Jeremy Bullmore, the erstwhile chairman of JWT and one of the greatest writers in our industry said much more eruditely, you have to nurture and cultivate brands. It is a bit like gardening - you have to fertilise the plants for them to grow.

If you compare the top 50 brands in India, the top 100 globally, in China and in Latin America to their total shareholder returns - or if you had a the fund portfolio built around those great brands, you will see that they outperform. We have shown and demonstrated virtually how great brands perform better; we have done it for the top 50 in India against the Sensex.

There is a parallel to country branding, which I think Prime Minister Narendra Modi understands well. If a brand is highly regarded it reflects in foreign direct investment. If India is a strong brand, it will certainly have a strong FDI.

Storyboard: How would you like to look at BrandZ five years from now and say ’this has succeeded’?

Sir Martin: I think it will have succeeded if we will have changed people’s view. India is an under-branded, under-advertised country. We have $500 million worth of revenue here, with a high share of over 40%. We 15000 people in China, with over 15% of the market, a $1.5 billion business and 16000 people. Despite the difference in the GDP, in terms of population size, they are very similar. In fact, India will be the most populous country on the planet with the third largest GDP, in about 25 years. The potential is enormous, although I am not saying it was driven by Millward Brown or WPP BrandZ’s Top 50 (which will definitely be a Top 100 list by then).

In five years, it will have gotten people to change their attitudes to not only focus on costs, but on growing the top line.

Storyboard: You know about India’s ‘wonderful’ performance in the recently concluded test match against England. Could India be having its ‘Manchester United’ moment, where we see a brand erosion of cricket as a whole with horrific implications?

Sir Martin: Maybe. Maybe not. Obviously we will have the five one-dayers and I’ll be saying I told you so! Maybe MS Dhoni and Virat Kohli will have done brilliantly in the one day game. There isn’t really a parallel to Manchester United here; the game isn’t the same. Football is two halves of 45 minutes each; comparing two different leagues might make more sense there. With cricket, you have three different types of games. Maybe Indians aren’t really cut out for test matches any more, or the English are good at test cricket but not so much in the one-day and T20s. It’s too early to call it a demise, but if India was to fail at all three forms of cricket, or even two out of three, then it would have more serious implications.

There are also a lot of other issues that pertain to the game. Where do all the revenues go? Who wins as a result - is it the clubs or the players? There are so many considerations, but I still don’t think that this is Manchester United’s moment for India. ManU might come back despite losing the first game of the season. And surely Van Gaal isn’t to be underestimated!

Storyboard: The trouble with cricket is that there is one broadcaster and many brands who have said this is a safety play, purely out of habit.

Sir Martin: That is true. Having said that, you have to look at the dynamism in the market, the IPL and the different variants of the game. The five-day test isn’t built for the modern day. Who is going to sit for lunch and tea for five days in a row? Maybe we had time to do that at the time of the Raj. It is a shame to admit this, but I for one, haven’t had the time to watch any of the five tests match live.

Storyboard: What were the highlights of the whole game?

Sir Martin: I did watch parts of the whole game. I did spend a Sunday…oh wait, did it last till Sunday? (laughs) Either way, I spent that Saturday or the Sunday watching the game was on. When I left for an interview, it was 46/5 and Dhoni had just gotten out. I thought I’d finish my hour-long interview and come back to watch the end, only to come back to see Joe Root receiving his Man of the Match award! I was amazed at how they had fallen apart.

These things happen. It isn’t the volcanic eruption as you are implying, unless it starts going to the other forms of the game. It maybe that India is ready for other sports. We are going to see a football league here with A-teams, Bollywood stars and sponsors. Maybe the sports are going to be spread over a wider range than just cricket.

Storyboard: Could we talk about the measurement of these things? What happens about the measurement status in India?

Sir Martin: I must be careful about what I say, considering the matter in India is currently sub judice. But we could just extract India for the purpose of this conversation and talk about other countries’. We measure media in upto 40 countries and do it very well. Outside India, there is always a question of meter outreach and coverage as does the question of what the market will actually pay for.

If you have 10000 metres, is it appropriate to go to 12.5 or 15 or 17? We grow and continually try to upgrade that. Another thing is that in most jurisdictions we have worked in, two supplies don’t work. It seems that the market is only willing to pay for one and we do it very effectively. In other countries there are political considerations; in some jurisdictions governments want to see ratings in some shape or form. We resist that pressure. We also have meter owners who are happy bunnies if their ratings rise and discontented if they fall. You can’t do anything about this. The answer is simple: if the programming was better, the ratings would have followed suit.

You have to fundamentally make sure that the meterage is right and that you have sufficient penetration of all the urban markets. We are very sensitive to all of this and understand it. Having said that, the market has to ultimately pay for it. We don’t own excessive profits out of these companies; they do reasonably well. It’s a good industry and business to be in. We run it scrupulously fairly from an editorial point of view and we keep it very segmented and separate. We will see what will happens here in India. Two systems won’t co-exist, but we will see how it works out.

Storyboard: The concern seems to be that we might be in a situation where there is no measurement, as opposed to having two…

Sir Martin: There are some countries who wrestle with that and find it unsatisfactory. I think when clients are spending and investing the amounts of money that they do in India and anywhere else, you have to have a measurement system. As difficult as it is to do and as subjected to political or corporate pressures, the fact is that clients must have a measurement system which is independent and one they can believe it.

Storyboard: Without going into the matter that is sub judice, do you think clients in India should speak about measurement louder?

Sir Martin: I can’t say that. Should clients have a strong voice in measurement systems around the world (again, keeping India separate from the conversation)? Yes. Should have more of a say in the measurement that they should express view strongly? Yes, they should. Any system should have the input from the three constituencies - broadcasters, clients, the agencies - which should be balanced and not disproportionately one over the other.

Storyboard: Staying with media, there is an increasing effort by GroupM companies to find sources of revenue outside of their bread and butter - media planning and buying. Where is that headed?

Sir Martin: You said ‘outside their bread and butter’, which isn’t quite true. These are adjacent area. We have done two things in GroupM UK that have been very successful - one is Xaxis, which is our media planning and buying behind platform in digital, and really an extension of our existing media planning and buying. We actually purchase online inventory using private exchanges because of fraud in the US and elsewhere. With Xaxis we have made the leap and the market followed us. We have also said that measurement should go beyond transmission in the C+ 3 and C+7 areas.

The second part of this is GroupM Entertainment becoming the biggest commissioner of reality shows, documentaries and shows. We have script and programme ideas that clients want, which we then fund through sponsorships and then fund their production. We then work with the broadcasters to develop the programme. Right now we have sponsorships that spill over to the programme in terms of direct involvement of sponsors. We make it quite clear that the sponsor are involved if it is product placement, etc. but we are essentially looking at growing the business because GroupM has been very successful. This isn’t because media planning and buying in the traditional sense is less attractive, though.

Just last night we discussed how in India, digital is only 8 per cent, while 90 per cent is roughly in traditional media, whether it’s free-to-air television, cable and satellite, or newspapers and magazines. All in all, these are the extensions of our broadening the range to cater to the market.

Storyboard: Staying within the framework of commissioning programmes, what are the sort of skill-sets required?

Sir Martin: The skill-sets required are extremely different, so we tackle this by bringing in people who know about this. It’s the same thing we do in the digital area. We are hiring more programmers and engineers, which doesn’t go to say we are competing with giants like Google or MIT and Berkeley graduates, but just that we are going to recruit more people who are going to understand this medium.

We aren’t actually creating technology; we just apply other people’s technology into our operation. We have more investments in the technology areas coming soon where we reinforce the technology we work with in a more sophisticated manner to ensure we are ahead of the competition. Even Google is competition; they have Double Click, Facebook has Atlas, while ours is the poor man’s approach with 24x7. Xaxis came out of that. We have to reinforce Xaxis’ technology by exclusively applying more and more sophisticated technology that other people have developed.

Storyboard: Won’t your commissioning business reside better in creative agencies rather than media agencies?

Sir Martin: The creative agencies are perfectlyfree to develop ideas. If they have an idea for programming they can approach broadcasters, go via GroupM. Broadly, the relationship between GroupM and the broadcasters is where they see what the latter has to do. If it is about your question of cricket in India, maybe it is about broadening the scope of sports and sports programming in the context of the Indian market. Are sports like basketball or soccer going to take off? My view is that they will take off in India. It depends on how the the economy matures.

Going back to your question about cricket, as an economy develops, we can see that maybe a five-day test model is not built for the 24x7 age. You and I might love to watch a match for five days if given the chance, but it isn’t possible for a lot of people. Different variations of the game - ODIs, T20 - have been developed to cater to that, very successfully. With a change towards attitude in the economy, the attitude towards sports changes too. With more development, golf, tennis, soccer, etc become more important.

So, I think the creative companies can do it but the media companies are closer to the broadcasters and clients. They also can see which way the clients’ and broadcasters’ minds are going.

Storyboard: This one is an unusual trip for you. You have been in the same city and haven’t traveled at all, but have met all your CEOs. What is the sense you get of India?

Sir Martin: People’s expectations are up with the stock market being up! I think people are saying PM Modi has great start; he is communicative and media friendly. The question is, can he get it done? The precedents are good, he has done it in Gujarat. But what about India as a nation? Someone said to me that running a state is very different from running a country. There are a lot of practicalities under consideration, too.

We have seen this before, too, with the euphoria around president Obama and his first inauguration. I had attended it and it was fantastic. Then there was President Kennedy, who I was very motivated by as a young man.

Vision and strategy are one thing, the other is implementation. The big B-School argument is - which is important? The answer is, neither is more important than the other, both are. Here too, they have to make sure both works. It’s that simple! The expectations are at an even higher level than I thought they were.