“Advertising and marketing has changed and it is

The company posted a billing hike of 26.5% to £455.9 million in Q1,2023 from £360.3 million in Q1, 2022. Net revenue too rose 28.1% to £219.1 million in Q1,2023 from £171.1 million in the same period last year. In a conversation with BrandWagon Online’s Aushree Bhattacharyya Sir Martin Sorrell, founder and executive chairman of S4 Capital and Poran Malani, country head, S4 Capital, MediaMonks, and MightyHive talk about how technology is expected to change the rules of the game including media planning and buying. (Edited Excerpts)

What are the challenges businesses are facing today? Which are the regions which will drive growth?

Sir Sorrell: Today, a client is wrestling with two kinds of challenges – the first being geographical and the second being technological. When it comes to geographical challenges, the world today is a very difficult plan in many respects. There are major geopolitical issues, and India is very much at the centre of it. The second challenge for businesses is the global growth which we saw over the last 40 years or so, since the 1980s. I don’t think it’s going to be as vibrant. This is due to those geopolitical reasons which lead to things becoming much more fragmented. So, Lebowitz’s concept of globalisation, which gained ground in the ’80s and ’90s, says that consumers are going to consume everything in the same way everywhere. While the concept is not broken, it has certainly slowed down. Geographically, North and South Americas, the Middle East, and Asia (India) are going to become far more important.

What are the key technologies which will drive growth?

Sir Sorrell: I think the key technologies are blockchain and Metaverse, which have come in for a lot of criticism. However, we have seen huge applications already in healthcare, entertainment, music, sports, training, work-from-home or work-from-anywhere, followed by AI (artificial intelligence), AGI (artificial general intelligence), and quantum computing. In the case of Metaverse, I think it is much maligned but actually full of promises. I, however, don’t see much promise in cryptocurrency and NFTs (non-fungible tokens).

Would it be wrong to say there is hype around AI and AGI, and businesses are yet to fully implement or realise its potential?

Sir Sorrell: Given that the world is currently witnessing low growth in gross domestic product (GDP), higher inflation and interest rates, there will be a big focus on businesses to find growth and margin. This is where technology, including AI and AGI, will enable clients to become much more efficient. It is true there is a lot of hype around AI and AGI. Just to be specific, CEOs, particularly those who represent advertising holding companies, like to pontificate about how they are coping with AI but there is very little meat in what they say.

How can businesses leverage AI and AGI to drive growth?

Sir Sorrell: So, there are five areas where we will see AGI playing a significant role. The first thing is speeding productivity gains in visualisation and copywriting. Simply put, what took us two weeks to do can be done in two hours. Secondly, there’s hyper-personalisation. We do a lot of work for Netflix and in my view, it is the most sophisticated model of personalisation. So, in a typical Netflix campaign historically, we might have produced about one and a half million different permutations. Now with AI and AGI, we can be multiples of that, that is two or three times. In theory, we’ll probably only use about 50,000 or 70,000 of those assets in the course of a campaign but what it means is you know, if Netflix launches a series, what you will get to see in terms of a campaign will be different to what I will.

Thirdly, there will be a big impact on media planning and buying. We have already started to see that to some extent in the case of small and medium-sized enterprises, which have a lot of choices from platforms. For instance, Google has developed Performance Max (P-MAX). Not to mention, we’ve already seen Meta and Amazon develop programs besides media, content creation and media production for small and medium-sized enterprises. Furthermore, India will also see an impact on the way media planning and buying functions. So of the global media market, digital advertising is about $650-670 billion which is about two-thirds. This is going to be about 75% by 2025. I don’t think there is any chance that the six holding companies which employ about 2-2.5 lakh people in media will be employing those many in a few years’ time.

The fourth area is improvement in productivity, in terms of day-to-day operations. The fifth area which I think is really the most interesting is what I would call the democratisation of knowledge and AI in theory.

When you say machines will take over a lot of the work, what kind and to what extent?

Sir Sorrell: What you’ll get is in my view a lot of the drudgery being done by the machines, and people will be given more time to analyse and implement. Having said that, people may be well aware that in 1930s, John Maynard Keynes said automation was gonna destroy jobs, or reduce jobs and we’d all have more holidays. And thanks to the rise of technology, work life balance is indeed changing. So, the rise of technology will allow one to be much more efficient, whether it’s effective or not is still debatable.

How is India placed given that we have already started to see clients being cautious in spending?

Malani: What we’re seeing is that while performance marketing is being tweaked with AI, it’s about job losses and numbers. On the creative side, every conversation we have had is about untapping new markets. It’s about fulfilling that promise of digital marketing, which is the right experience at the right time to the right person at the right moment. Brands are becoming more about not brand loyalty but how you are loyal to me, and how much you know about my life or fit into my life. And that is more than anywhere happening in India. So, that’s where we’re seeing the real application of AI, which is helping our greatest and expanding its new markets as opposed to diminishing that input.

From small to medium to large companies – is the current slowdown in business worrisome?

Malani: I think the adaptability of big Indian companies globally to service will change, it will have to change given what’s going on in the markets right now. It is to the point what Martin said that it is more about cost cutting than it is about growth in a lot of those markets. I think top India IT firms are very well placed to take advantage of that. I think that business will come back. I think where we’re seeing a complete dichotomy is local businesses are going gung-ho. These businesses are acquiring customers, going into new territories and everything is up. When I take a look at the bigger conglomerates which are tied up to their international companies, decision making is tied into international decision making so there’s been a theoretical slowdown for them. Even though their markets are growing and we’ve seen that particularly in FMCG, yet Indian companies are trying to convince the global counterparts that they can spend. But it’s taking time to do so because these firms have to justify every dollar nowadays. So what we’re seeing with the bigger companies right now is a lot of sweating of assets and not really taking advantage of technologies, and the ability to really mushroom out that content. So that does worry me.

What new kinds of advertisers have seen emerging or are expected to emerge?

Sir Sorrell: Our business is about 50% technology which will continue to be extremely strong and will continue to be a major focus. Secondly, Healthcare followed by the Financial sector and within that Fintech will always be important. IPOs and startups among others wasn’t a big part of our business. We have them at the fringe but not at the heart.

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