There was a time when brands used to lead consumers, because every time a brand interacted with the consumer the consumer got to know something. Today, consumers are going way ahead of brands and brands are finding it very difficult to keep pace with the consumers. So, the question really is should you try and outpace the consumer, or should you learn to live with the fact that the consumer will always be ahead of you,” says PRATEEK SRIVASTAVA, Co-Founder, CHAPTERFIVE, in a conversation with Editor-in-Chief K.G. SREENIVAS.
Welcome to The Future’s Here special series hosted by Creative Brands. The Future’s Here showcases leaders, thinkers, and trend setters from the creative industry, namely advertising, media, communication, and branding. My name is K.G. Sreenivas and I am Editor-in-Chief of Creative Brands, a portal that covers the global creative industry and economy. Today, we have with us Prateek Srivastava, Co-Founder of ChapterFive Brand Solutions, a marketing consultancy and advertising company. A creative entrepreneur with over 30 years of experience in the industry, Prateek, an IIM Ahmedabad graduate, is a specialist in Marketing and Digital Strategy, Integrated Marketing, Advertising, and Brand Architecture. Prateek began his career with Mudra Communications, later moving to head the Unilever business at Lowe Lintas Indonesia, before becoming Group President and Director at Ogilvy & Mather. Additionally, he was a member on the board of directors at Ogilvy. Prateek was also Chairman of the Ogilvy Worldwide Office (Hub) at Bangalore, where he led international projects.Some of Prateek’s top clients include: Flipkart, Britannia, Himalaya, Karbonn Mobile, Panasonic Smartphones, Bharat Matrimony, India Property, and Vini Cosmetics.
Prateek, welcome to the show:
K.G. SREENIVAS: ChapterFive — interesting and intriguing! How and why ChapterFive? What was that moment of provocation for ChapterFive?
PRATEEK SRIVASTAVA: It’s a difficult question to answer, because the fact is that the name ChapterFive holds no meaning! It’s just a name that occurred to us one fine evening. We said let’s go with it! And the good thing about this name is that it is a great conversation starter, everybody is intrigued by this name, so when you meet somebody for the first time it’s a good conversation opener and I think that’s what a name should be like.
KGS: Prateek, we live in extraordinary times — times that completely redefined every single aspect of our lives. In the creative and communication industry, every tested notion of communication was put to test in unprecedented ways. How did you and how do you continue to ride the storm as we speak?
PS: So this is actually a difficult time for all of us, particularly for the consumer and as you said this is an unprecedented situation. So there is no way of saying how it will finally pan out, particularly in terms of comprehending how the consumer has changed, but I do think we are too close to the situation, so it may not be wise to make predictions at this stage. We wouldn’t know how the consumer will start thinking six months from now or one year from now. So, I think it’s important at this stage to keep an open mind and keep monitoring how consumer behaviour is changing rather than be predictive about it. This is the time when the brands have to follow the consumer and not lead the consumer because, for one, you don’t know where you want to lead the consumer to, and two, you don’t understand where the consumer wants to go in the situation. What is certainly happening is that the consumer world is becoming more and more a bundle of contradictions. There are several contradictions at play — from the thing of you know wanting to get back to work and get started as opposed to being too scared to get out of the house.
Then there are several other contradictions also — you know you are very worried if there’s a Covid case in your locality and you want to keep your family safe; so you are not looking beyond your own family because you want safety for your family first, although at the same time you do feel for all those migrant workers, you feel for all those people who are out of jobs, you feel for all those small businesses which are not doing well and you want to help them in some manner. So there is a lot of individualism and selfishness and altruism at once in the consumer world. Marketing gets tough when there are too many contradictions in the consumer’s mind and her life.
KGS: What insights did you draw from these contradictions? What were some of your key insights under the circumstances?
PS: So, there are some obvious insights about how people have gotten closer to their families and how they are now appreciating each member of the family much more than they used to earlier when they used to take them for granted. But not so anymore. So those are some of the obvious insights but there are several other insights well. I was just talking to a lady in my neighbourhood and she was saying how at her home the amount of food that was consumed during the last three months was food that would have been normally consumed in 7-8 months! So, she was saying how as everybody was at home, the biggest pastime you know was cooking food and eating, and that everybody was involved in the entire process!
Now, if you look at it this way and you compare it to the per capita consumption of food in our country, even among the more affluent classes, do you think it’s going to come down later? You know when everything becomes normal, people will say now everything is normal let me eat less. No! So, some of these changes are irreversible. The trick really right now is to understand what are the changes that are potentially reversible versus what are those that are you know are merely transient, things that people will forget once the situation returns to normal. To me that is the biggest challenge the marketers are facing today. Another example I can give you is that of the ironing guy in our complex. Ironing is his primary source of livelihood. For two months, he couldn’t come because of the lockdown, following which he went through a lot of hardships — but there is no story about that! Once he returned, I asked him, “So are you happy now, that you know you are at least able to resume work?”. You know what he said: “You won’t believe it, but the number of clothes I get to iron is less than 10% of what I used to do earlier.” So, I asked him, “Is it because people are not going out so much and therefore don’t really need to iron clothes — instead they can wear home clothes and un-ironed clothes.” His insight was different: “That is not the reason… in the last two months, people have learned to iron their clothes on their own and have realized that it was not such a difficult task at all! So, they give me only the bigger pieces of cloth such as bedsheets to iron.” This is another behaviour change we need to account for.
KGS: Do you think the situation will have a sectoral impact, for example, on the food and consumables sectors? What impact do you think it will have once the pandemic has passed? And what correlation will it have with the advertising industry?
PS: Food is the largest category in our country and also the largest spender when it comes to advertising. If you aggregate everything, you can observe a lot of changes in food consumption. One thing that clearly is happening is that consumers are very rapidly moving from commodities to branded packaged stuff. It is difficult to say why exactly this is happening, because there was one theory that because when you are selling foodstuff loose, people are worried they don’t know who has touched that food who has not and, therefore, they would rather buy packaged stuff. But then when I was speaking to one of the shopkeepers, he said that, ‘no the reason why people are buying more and more of packaged stuff is not because you know they feel that the packaged stuff is not really touched by hand and it is more hygienic but because consumers have developed this attitude that it is ok to spend more’. You know when you have been through a situation when anything could have happened to you, you kind of philosophically understand life is indeed short and when you understand that at a conceptual level you want to make the most of it and therefore you don’t mind spending more on stuff that otherwise you would have said no to. So Rs.10 more per kilo for the packaged stuff doesn’t bother you anymore, because you don’t know what the future has in store for you — you want to buy the best!
KGS: Given what it was, advertising spends were slashed, but media consumption grew substantially in news, leisure, and entertainment. The rule of thumb in the industry that ad spends follow any rise or fall in GDP holds true. During the last decade, as global GDP rose 3-6% every year, the ad market grew with it to around $646 billion USD in 2019. Before coronavirus, the ad market was forecast to grow to $865 billion USD by 2024. Now a WARC (World Advertising Research Centre) based on data from 96 markets worldwide, represent an absolute downgrade of $96.4 billion compared to WARC’s previous global forecast of 7.1% growth made in February 2020. What is your take on potential and latent spends, especially with regard to digital and internet?
PS: So, I feel the quantum of spends may not go down drastically but the way it will get spent will change. Now one common misconception is that if you are on digital then you need to spend less. And you know people would spend millions on traditional media such as television whether in terms of production or in media spends but when it came to digital you know they would spend may be a tenth of that amount. Now that mindset will change and it will change very fast. Actually, digital is a far wider and deeper medium than television can ever be. You know in a typical Indian household, you will watch 20 to 30 channels and if you aggregate all of them, still 50% of India would watch a total of may be 80 channels, not more than that… whereas in digital there is the concept of a channel. You know that anybody can end up consuming any content and by watching it you may suddenly feel ‘oh, I need to know from where to buy xyz’ and you go online and you click and you are somewhere you have never been before!
So, in order to actually do justice to the digital medium you need to spend more and not less than you would on television. Surely there are many efficiencies and there are many ways of monitoring where your money is going and what are the results, but the bottom line is that unless you spend at least as much as you spend on TV, digital as a medium is not going to work for you, unless you are a niche brand. If you are a regular mass brand, particularly in the food category, you need to prepare to spend a lot of money and people will realize that very soon. So, I think the spending will come back but they will go more towards digital and less towards traditional media.
KGS: Prateek, what were some of your own explorations that we could talk about with reference to a specific client or brand you handled at the height of this corona crisis. What sorts of conversations you had with them and how did you take it forward?
PS: See without getting into specifics of any particular brand, one thing that we noticed was that all the brands that we work with — each and every one of them was scrambling to find the health angle to their brand. So, even if there was a remote aspect of health to the brand they wanted to go out and talk about. Many brands continue to do that. The other thing that brands started doing was that you know they wanted to get into the good books of the consumers, so they wanted to do something that made the consumer think that they actually cared and they were not really in the business of making profits above everything else. So, you know companies started distributing free food and free sanitizers and all of them were eager to talk about it to the media with the intent of letting consumers know they were actually brands that wanted to do good. So these were the two big trends initially and I think without exception in every category, in every industry most of the brands jumped onto this bandwagon. I mean look at the number of brands who saluted doctors — I mean you know everybody wanted to salute doctors for some time. So, this is how it is going right now and I think now is the time for brands to start thinking what is it they can do uniquely. I think we now have one more trend — that of ‘let’s get back to life’ and ‘let’s start again’ and all those themes have sprung up recently, but I think this is the time for brands to forget all this and look at what they actually stand for and find meaning for what they stand for in today’s context.
KGS: That’s the thinking that probably drove a lot of brands to philanthropy… how did brands approach you to reposition them or redefine them during this crisis?
PS: Well, I would not call it repositioning or redefining. I would say that whatever they did was more tactical and they knew that you know once the crisis would get over they would have to get back to what they were doing earlier, so it was all very tactical stuff. I don’t know if any brand really tried to reposition itself or redefine itself during this period.
KGS: You have been in the industry for 30 years. The rate of obsolescence in any industry is like a year or sometimes six months! What do you think has changed significantly? What are let’s say the top three changes that you have seen in the industry, there has been a digital revolution of sorts, where are we headed?
PS: See, the biggest change that has happened in the last few years is that everyone knows everything now. The consumer consumes so much information, so much media is getting consumed that both consumers and marketeers and everyone else know everything — there is nothing you can tell someone and surprise them! There are no more surprises! So, the only thing you can do is find a way of entertaining them or finding a way of engaging with them in an offbeat kind of manner. But you can’t surprise them with information or news or a piece of benefit. You know brand purpose and proposition and all of that, I don’t think you can surprise consumers anymore. For they have seen everything and are far ahead in time. There was a time when brands used to lead consumers, because every time a brand interacted with the consumer the consumer got to know something. Today, consumers are going way ahead of brands and brands are finding it very difficult to keep pace with the consumers. So, the question really is should you try and outpace the consumer, or should you learn to live with the fact that the consumer will always be ahead of you? To me, today, that is the biggest challenge and I feel that most brands should understand that they would never be able to catch up with the consumer and they should not even try and play the catch-up game. You should accept that the consumer is ahead of you and then figure out how best you can serve someone who is your master.
KGS: On the other hand, the newspaper industry is undergoing significant change — people are losing their jobs you know — there will probably be greater integration between print and digital at newspapers. How do you think this will impact the advertising industry?
PS: So, I think the jury is still out on the newspaper industry. Just the other day we surveyed 50 consumers in Bangalore about their newspaper consumption habits, so all 50 of them used to read a newspaper before the crisis. Now during the crisis at least 30 or 32 of those people stopped getting the newspapers at home while the others continue to get it. Now, people are not scared anymore, newspapers are again coming in and all that, so out of the 30-odd people who did not subscribe to newspapers for that period about 20 of them have started getting the newspaper again but again it is the same thing as the ironing guy — they are getting the newspaper but they are not opening it, not because they are scared of the virus or anything they just got used to not reading newspapers! So I am a little concerned about the newspaper industry, I don’t know how it will pan out, so I don’t know whether there will be any synergies between print and digital.
KGS: Prateek, one final question, do you see any significant structural change in the industry. Last year, we had lots of mergers and acquisitions, do you think in the wake of this pandemic will there be structural changes again or something of that sort?
PS: See the first thing that will happen is that the agencies will have to become leaner now. I expect in about two-three months’ time, a lot of large spenders could be renegotiating their fee with their agencies and when that happens, agencies, in order to stay profitable, will have to find newer ways to service their clients — and the first thing that you need to do is to become leaner. Large agencies have the potential to become leaner it will be good for them because they carry a lot of dead weight, they carry lot of unnecessary resources — they can be far more efficient than they have been. So, at the end of it this change will be for their own good, they will come out of it much better, much more efficient, and much smarter organisations at the end of this. So, to me, that is the biggest change that will happen and then when you become leaner, then you also have to you know rethink your structures, you need to rethink the umbrella of services to offer, you need to rethink your SLAs, you need to rethink your efficiency levels, all of that. So, I think a lot is going to change with the industry in the next six months or so.