Ajit Varghese, the global president of market development at Wavemaker, was recently in Dubai to meet with the WPP media agency’s new regional CEO, Rabe Iyer. Campaign caught up with the two executives to see how the new agency is doing.
Wavemaker was announced in June 2017, formed by the merger of MEC and Maxus, both agencies within WPP buying consortium Group M. When this happened, MEC’s regional head was Neil Hardwick, who was CEO of the agency from June 2017 to June 2018. He had replaced Mohan Nambiar, who ran MEC (and before that its predecessor Mediaedge) for 23 years until 2016. Iyer took over from Hardwick in June 2018.
Varghese says that now the logistical bumps of combining two companies are levelling out, there are “three distinct areas of differentiation we are able to bring to the table”.
These are: an obsession with consumers’ purchase journey; what Wavemaker calls ‘Rapid Growth Planning’ for clients; and the network’s data platforms.
At the core of all three of these focuses is the concept of agility, which Varghese and Iyer come back to again and again, calling it “the new scale”. For example, when looking at the question of whether to compete or collaborate with other agencies.
“If I believe, or WPP believes, that I can bring agility to a client by merging then we will merge,” says Varghese. “If agility comes through collaboration then we will collaborate; if agility comes through a diverse set of specialisms then we will keep a diverse set of specialisms.”
Wavemaker’s role as a media agency is moving from placing messages effectively to chasing consumers, says Iyer. Business growth among clients, and therefore agency revenues, will come from simplifying that chase for Wavemaker’s advertisers, a subtle shift from being efficient to being effective.
The principle of leveraging media buys through scale is still there at the Group M level, where Wavemaker’s purchasing ability is pooled with that of sister agencies Mindshare and Mediacom. But at the agency level Wavemaker is now more attentive to the subtleties of clients’ needs beyond traditional planning and buying.
The combination of Maxus and MEC into Wavemaker has also meant that Momentum, a consumer survey that had fallen under MEC, has now been amplified through the pooled resources and client base of the two agencies. The tool has now been used to poll more than 500,000 consumers in about 60 markets, including the UAE and Saudi Arabia. Momentum research is now being extended to Egypt and within the GCC.
The ability to crunch data is today a given for media agencies, in addition to the buying power that is their raison d’être. But Wavemaker’s clients are also calling for what Iyer and Varghese refer to as “magic”.
“The agency’s job is to add that additional layer of creativity, that additional layer of customisation, to the scale that the network can bring,” says Varghese.
Iyer adds: “It’s a good balance of magic and logic, of course, and in this world you have the additional opportunity of creating more magic through logic. You have all the data that is giving you more power to create more insights to give you the edge to be more creative.”
The merger to form Wavemaker plays into this narrative. “Maxus had a bit of a creative and entrepreneurial culture, MEC had more rigour and planning process,” says Varghese. “So we are able to bring the best of both worlds. We are able to keep the best of talent from both agencies.”
With that magic comes a shift in the balance of revenue streams from the traditional percentages of media buys to billings for other services. In the region that ratio is already at about 60:40, paid media versus other services, and globally Wavemaker is heading towards a 50:50 split.
The worldwide network has already crossed 10 per cent of its total business coming from content generation alone, and Varghese says he expects that to rise to 20 per cent within the next two years.
However, he is quick to point out that is a prediction, not a plan. Going back to that core principle of flexibility, Wavemaker is open to changing its operations depending on what its clients ask for.
While many agencies talk of staying ahead of the curve, predicting trends and getting there before consumers and clients, the narrative coming out of Wavemaker is more pragmatic and reactionary, about being fast to respond to the market without trying to second-guess its vagaries.
Clients crave simplicity from their agencies, says Varghese.
“I don’t think it matters to a client whether you are competing for business or you are collaborating for business,” he says. “They are increasingly looking for more collaboration across multiple partners, whether it is creative agencies, whether it is publishers, whether it is vendors. The client is saying you either compete or collaborate, it doesn’t matter. Bring me the ideas, bring me the creativity.”
This is leading to a “democratisation of creativity”, where rather than creative agencies automatically taking the lead, there is a race for that position, albeit one conducted with “mutual respect”.
“Today with the race to own the client’s relationship with everybody, when these parties come together there is a different level of awareness to be able to contribute mutually, respect each other’s expertise and come together,” says Iyer.
There is now less competition between agencies and more collaboration, whether that is within Wavemaker, with other WPP agencies or even with external suppliers. As the need for skillsets grows, that talent can gradually be brought into the agency.
An example of this is performance marketing, says Varghese. Two or three years ago, performance made up only 3-4 per cent of client budgets, and the Group M network agencies were content to let specialist performance agencies handle that side of their clients’ business. But today it has risen to between 10-15 per cent, and Wavemaker and Group M is now building up its in-house expertise in the field.
E-commerce is an area where Varghese and Iyer predict growth in the region. In markets with a more advanced online marketplace, such as the UK and North America, 20-30 per cent of Wavemaker clients’ sales come from e-commerce, and for cosmetics giant L’Oréal this is as high as 50-60 per cent.
As demand grows in the MENA region, Iyer’s agency will be reaching out to tap into Wavemaker’s global expertise, and WPP sister-agency support in the region until that tipping point is reached when it will begin building up in-house talent.
“Our business is we completely go by what the client wants,” says Varghese.
Group M – and WPP as a whole – have been going through a rough patch recently, having lost a number of key global accounts and a CEO, Martin Sorrell, who in April left the holding company he had founded. However, Varghese points out that between 2009 and 2016, the group grew to five times its original size. Share prices may have taken a beating, but the top-line loss has only been 1 per cent.
In the region, says Iyer, for every dollar of business Wavemaker has lost, it has won back 85 cents in new business. Not all of the 15 per cent difference sits with the agency’s traditional rivals. Smaller shops have taken their share of marketing spend as clients’ business models adapt to new ways of working.
Wavemaker’s growth plans include regional expansion, with the Egypt office showing “huge growth” among local clients, says Iyer.
If Wavemaker’s leadership manages to stick by its dedication to agility, rather than getting stuck in a rut, its future should be shaped by its clients reacting to their consumers, and the agency reacting nimbly to the market – whichever direction the market takes it.
