Daryl, you asked who's Swapan Seth, so here's an old interview of swapan published on AgencyFaqs!
Swapan Seth, deputy CEO, Equus Advertising, swears that his "cowboy days" are behind him, that his guns have been stowed away in some forgotten attic, and that he has "mellowed with age". But the aggression hasn't all dried up, as is evident in the way he has stormed the Mumbai ad circuit, picking up significant businesses - including Standard Furukawa, Aiwa and CHannel [V] - within 100 days of setting up shop. In this interview with N. Shatrujeet of agencyfaqs!, Seth lets off a volley on how most agencies are so busy getting their numbers and billing equations in place, they are losing sight of what they are really supposed to do, and how the advertising scene in Mumbai is disheartening, despite the fact that the city hosts some of the biggest clients and agencies.
Q. When did you decide to set up shop in Mumbai? What made you take this decision, despite the fact that you had still to fully stabilize in Delhi?
A. Mumbai got started when Kaushik (Roy) was hired - at least the intent was in place. But when Kaushik decided to leave, I had two choices. I could have abandoned Mumbai completely. But the problem was, we had just picked up a very small client called Mecklai here, and I felt it wouldn't be fair to leave the client in a lurch. And Mumbai would never forgive me. So I put in this lady named Anu Raj. And I just watched Mumbai from the sidelines, for a month. That's when the economics of the place began to baffle me. Because here was one lady in an outpost, and the outpost was beginning to make a fair amount of money. And I was beginning to get a bit bored in Calcutta myself, so I decided to move in. Mumbai happened purely by accident.
Historically, clients have always paid a 15-per cent commission, which they know the media has paid back to the agency. So, mentally, the client never feels he is paying for creative.
Q. And what did you do when you saw you were stuck with this 'accident'? What was the blueprint to navigate Mumbai?
A. Three things. One, I had a monthly income number, which I told my shareholders about. The number was a bit bizarre. Two, I had a very clear-cut idea about which are the clients I would be working for. Like I knew I'd work for Kabir (Mulchandani). Three, I was clear that I would attempt to do some decent work in Mumbai.
And the most important thing for me is that, henceforth, there'll be one key spokesperson for this company. And that'll be Equus' key number at the bottom right-hand corner. That will tell the world whether we're doing fine, whether we're doing decent work. And till now, everytime our key number has appeared in Mumbai, it has suggested something about us - good, bad or ugly.
Q. And have your forecasts happened?
A. The income figure has been exceeded every month I've been here, despite being bizarre. It's a number that's achievable on a stretch, and we've been on a stretch. About my client shortlist… well, 50 per cent has come through… Kabir, STAR TV… See, I am very eager to work on brands that would allow us to create case studies. Today, Equus' toughest task is to get CHannel [V] back onto the tip of the youth space. As far as Aiwa is concerned, I think there is a terrific opportunity for us to bind some strong image values into a brand like Aiwa. As far as Indian Express is concerned, I think it's a great challenge when you're up against The Times of India in cities like Mumbai, Pune and Chandigarh. Even IDBI, which has a stodgy, elephant-like image, is a challenge. So, I think all these brands and all these opportunities are basically being sought from a perspective whereby we can add value to the task. And therefore, earn some brownie points one year down the line.
Today, if you're on a flat fee with a Rs 80-crore client,
there's a lot of money you can make. And there's a lot of
money that he can save.
Q. You seem to be picking up 'challenger' and 'anti-establishment' brands. Is this your way of taking on the Establishment in the ad industry, at least in perception terms, if not in real terms?
A. I subscribe to the first part of your question, but not to the second part. See, we have to understand the basic construct of what constitutes competition. I am in complete competition with every agency that aspires to do some half-decent work. If HTA aspires to do that, if Ogilvy aspires to do that - which it does - of course, we are in competition. I am not in competition for the numbers game, I am not in competition for rankings. Four years from now, I want an independent audit done on what the Equus brand stands for. I have clear values about what we must stand for. Things like doing decent work, building a fine organization… I'm not guided by Rs 40 crore. I'm not interested in being part of some survey where you are ranked by size. I'm a businessman, and all I care for is profit.
About the first part… we like challenger brands. When we launched Harvest Gold in Delhi, people warned us. It's a different kind of joy when you're walloping Modern Foods. And when you do that, you have a little story for yourself. Suhel and I anticipate building little stories about Equus, little case studies. And you build case studies only with challenger brands. Because it's only when you're up against the Establishment, that you get noticed.
I think the best thing that ever happened in our lives is Daewoo going away from us. Because, suddenly, we learnt some amazing facts about ourselves.
Q. Coming from the 'backwaters' called Calcutta, what is your honest assessment of the Mumbai ad industry?
A. I've noticed a couple of things about this city that have really surprised me. I've noticed large clients who are unhappy, who are being forced to live with second-rate service. I've see agencies that are very non-agile. I see a sense of complacency in many of the big agencies. And I see immense opportunity for an agency that is flexible and agile.
Everyday I try to find some decent ads in The Times of India in Mumbai, and fail. It's very disheartening because some of the biggest clients are based here, as are some of the largest agencies. The complacency is evident. Most agencies are so busy getting their numbers and billing equations in place that many of them are losing sight of what they are really supposed to do. And it feels sad to see some large advertisers take full-page ads for pure schlock.
I think the interesting thing in Mumbai will be to attempt to deliver value, without it necessarily costing the client the earth. That is possible only on the flat-fee basis. Today, if you're on a flat fee with a Rs 80-crore client, there's a lot of money you can make. And there's a lot of money that he can save. I hope the two parts converge here. That's when we'll be an agency with some value.
Suhel and I anticipate building little stories about Equus, little case studies. And you build case studies only with
challenger brands.
Q. It's said that you have only managed picking up those businesses that not many agencies in Mumbai would have touched anyway. Aiwa, for instance.
A. When you mention the name Aiwa in agencies, you will hear the remark, 'Oh, who wants to work on that.' My point is, before the business came to Equus, 12 agency heads were in active conversation with Aiwa. Today, they might not consider it to be fashionable to admit it. Especially after a Johnny-come-lately is getting to work on it. Tomorrow, suppose Kabir sacks me, you'll again find 14 agency heads knocking Kabir's door.
You might say we haven't won big accounts following multi-agency pitches. Partly right, because, honestly, Equus isn't in the consideration set of some big brands as yet. But we have beaten some big guys. We beat Leo Burnett to get Standard, Contract to win Max Healthcare. And Mecklai sacked O&M, Mumbai, to appoint us. Today, I'm sure O&M will say, 'That hardly matters.' Because what you do hardly matters. It's only what you win that matters. That's basic agency and human behaviour.
I think we're all playing this game of hiding facts from one another. Come on, let's face it, if there's a bhujiawala's business billing Rs 2 crore, agencies will certainly be outside that door. I went to a dotcom client here in Mumbai, and told him we'll work on a fee basis. He said it's fine as he anyway works on a fee basis. He then told me about his fee. It's probably something I'd charge to develop a brand name for a client. And here was one of India's Top Six agencies charging him that money for a retainer.
So Mumbai isn't entirely about big lights and blazing glory. There are enough dark corners in this town as well.
Most agencies are so busy getting their numbers
and billing equations in place that many of them are
losing sight of what they are really supposed to do.
Q. So what are you doing different?
A. I think it is just passion, nothing else. Look, every second agency is capable of doing half-decent work, of thinking out-of-the-box. I don't know whether the Gods are being kind and giving us more opportunities to display our talent. But to sum it up, what Equus has on offer is some full-blooded solutions that are out-of-the-box, fast and agile.
And all I'm competing for is consumer attention and colleague attention. And peer group respect. I just want to build an agency people respect. Whether we bill Rs 1 crore or Rs 100 crore is secondary, so long as we post a profit for our shareholders.
Q. Going back a little… How did the parting with Daewoo affect Equus?
A. I think the best thing that ever happened in our lives is Daewoo going away from us. Because, suddenly, we learnt some amazing facts about ourselves.
See, Daewoo had occupied so much of our physical and mental space, we hadn't gone out, actively pitching for businesses. If we were getting businesses, like ITC Agrotech, we were doing good creative stuff, but we weren't ending up servicing them very well. There were natural compulsions when working for a company as large as Daewoo.
Another problem was that although it was such a large client, and it didn't test us very hard in media, we never built large media capabilities. Which continues to be Equus' greatest weakness. If Daewoo had been demanding from day one, in terms of evaluations, measurements of GRPs and TRPs et cetera, we would probably have invested. They weren't demanding enough, so we didn't invest. And we ended up paying the price progressively.
I think that Daewoo's loss strengthened us mentally. There certainly was trauma. Everyone was saying 'It's over for Equus.' Naturally, everyone in Equus too was quite scared. But then we decided we'd bounce back. I admit we haven't bounced back completely, but we're getting there very fast.
And all I'm competing for is consumer attention and
colleague attention. And peer group respect. I just want
to build an agency people respect.
Q. One of the important restructuring exercises that Equus underwent post-Daewoo was that it switched to the fee-based system. How has the fee-based system helped you?
A. Let me make this clear. Even when we handled Daewoo, we had certain clients on the fee-based system. It's just that, because post-Daewoo, there were monthly checks that needed to be maintained, we found that the fee-based system was a far saner way of planning life. And even today, some of our clients work on the 15 per cent… like Standard Furukawa.
I think the fee-based system works magnificently. One, it's a transparent way of doing business… the client knows the exact amount of money I'm making. I arrive at a fee not by taking a number out of a box. I have a scientific method where I tell the client this is what I would make if you paid me on the 15 per cent. Alternatively, this is what I want. On the face of it, my demand may seem expensive. See, historically, clients have always paid a 15-per cent commission, which they know the media has paid back to the agency. So, mentally, the client never feels he is paying for creative. But when you actually put down a creative fee, and tell the client that he is paying a creative fee of about Rs 1 crore a year, he starts wondering, 'Do I really need to pay a crore for the idea?'
But my point is, by going for the 15-per cent route, the client is going to pay Rs 2 crore in any case. I'm going to make Rs 2 crore off him. I'm getting the Rs 2 crore out of the media. But by paying the Rs 1 crore to me, he saves Rs 1 crore. I let him decide which way he wants it. And it saves on paper, on clutter, on disputes… And it puts a value on our creative.
The fee system allows me to forecast sanely, it allows me to be absolutely cocooned in terms of fluctuations in spend levels. I can go up to the client and tell him that a full-page ad is a waste of money. Sadly, this business is becoming all about how many full-pages can you squeeze off a client. I'm not in that space. The fee system allows me clarity of counsel and purpose to our clients. That is important.
An old published interview with Swapan Seth. For Daryl.
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