Independent agencies will continue to consolidate with other independents: Suveer Bajaj

Suveer Bajaj of Zoo Media talks about the Indian homegrown digital agencies space and the evolution it has seen, the changing shape and size of the digital marketing pie, and more.

Social Samosa in conversation with Suveer Bajaj, Co-founder Zoo Media and a jury member of the SAMMIE Best Social Media Brands Awards 2022, talks about how the digital marketing space has grown . He shares the challenges faced by digital agencies, and how Metaverse is now what Facebook was 10 years ago.

Edited Excerpts:

How has digital marketing grown in the last few years and how do you see it evolving in the future?

Digital marketing has grown manifolds, in terms of both, the size of the pie, and the shape of the industry. A decade ago, when we commenced our journey into this space, the size of the pie was barely INR 3500 crores.

Today, in various parts of India, as well as around the globe, the size of the digital marketing pie, at maturity, goes anywhere between 20%-40% (depending on what part of the world you are in).

In terms of the overall market size and shape, we see mass adoption of digital, and therefore a stronghold position for digital has developed in the larger A&M, and media industry. Digital marketing has also considerably become a much more mature industry in its essence. Right from mature measurement, to mature media, we have also got mature creatives today. 

It has allowed for technology to play a strong role in terms of enabling digital from a marketing, automation, AdTech, and creative tech standpoint. While earlier digital was looked at as “one slice of the pie”, today it is looked at as potentially something that drives the pie. The advent of novel verticals such as D2C (that are predominantly reliant on digital as a medium) and as a result has given digital a lot more legs to stand on, and become an essential marketing channel. 

Consumer behaviour trends that you've witnessed during the festive season

This was the first Diwali post-COVID, which means that people were finally on the streets, which means that retail exploded all over again. Given the fact that retail spending nearly dropped to zero in the last couple of years, eCommerce and digital brands enjoyed a really good run. However, this year there was a certain amount of semblance as far as Covid is concerned. Therefore, everyone who was reliant on retail or fashion saw a certain amount of resurgence. 

What is interesting to observe is though during festive seasons there is a lot of discretionary spending, the entertainment industry did not attain balance, with theatres still going at 60% occupancy.

However, that was compensated by the fact that people were indeed looking for real-life entertainment, which was experiences. We saw hospitality and F&B go through the roof, we see travel go through the roof, from an industry standpoint. This is ironic too, because the world is going down the lines of a global recession, yet discretionary spending doesn't seem to be slowing up.

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Where do you see the industry grow in terms of Indian Homegrown Digital agencies?

There are many layers to homegrown agencies that fall all the way down to the gig economy with freelancers and individuals who are working with brands. I believe, today there is a niche for everybody to kind of occupy a space in the arena of digital. Having said that, there has been a flurry of new advertisers into digital, with businesses finally adopting this practice. That’s also something we at FoxyMoron are trying to capitalise on.

Simultaneously, there has been a whole new range of brands called D2C (Direct to Customer) which did not exist a decade ago. These are digital native brands and are immensely reliant on digital platforms. Even with all the big tech companies we see today in the realm of E-sports, fantasy and gaming, or the likes of ed-tech that had a really good run till very recently. FinTech also has completely exploded. Hence for digital native agencies that may not necessarily have an integrated approach to understanding integrated media services, there is still a large space to occupy.

I believe homegrown agencies are going to continue to cement a strong position in the industry. Like we saw five to seven years ago, consolidation with the networks and the independents, I feel that over the course of the next decade, there is going to be consolidation between the independents themselves. This is primarily because the market needs to start getting more organised, in order to reap the benefits of scale, the benefits of economies, and the benefits of consolidation.

Recently, Metaform announced 'Meta Pujo'. Can you elaborate on the future of Metaverse in India and the impact it will have on the A&M industry?

It is still too early to talk about what impact the metaverse could have on the A&M industry. The early adopters of the metaverse in India are definitely the media brands, who understand the potential of creating a new media format by jumping onto it quite aggressively. The PR-able quality that metaverse possesses (because there's innovation around it), makes it tempting for brands to experiment with. 

As I foresee it, the present trend of the creative economy will be spilling over into the metaverse very quickly. There is also a beautiful segway from Web2.0 to Web2.5, and Web2.0 to Web3.0. There is a lot of relevant Web2.0 equity that still is translating into web3.0, with the likes of Twitter. Or something like Discord, where if you have a Discord server, your Web3.0 community is housed over there, even though Discord is still a Web2.0 platform.

However, there will always be one side of brands who will want to jump the bandwagon and get right in, and the other side of the brands who will wait back and watch for the other guys to make the mistakes and figure out. Why?

Because measurement in the metaverse is a challenge right now. The second biggest challenge is user adoption, and the third is the thought of how to monetize the platforms.

The minute monetization comes into play, the RBI has its red flags up, as far as transactions are concerned, on the metaverse with anything that is blockchain-backed. 

What challenges do digital agencies face when it comes to the metaverse? Are there any other challenges that the entire industry is facing?

I feel the biggest challenge that everybody is facing is educating clients. It reminds me of the first two or three years of my career when I had to do the same thing with Facebook. The second challenge is the production piece. I don't think today people know how to produce in the metaverse.  

The third challenge is adoption. While everyone is exploring the O2O2 user journey which is offline to online and online to the metaverse, not many are really succeeding with it.  

According to you, which of the several digital platforms flourish the most, and who has the most potential in the coming years?

We are in a space that is constantly fluctuating. 10 years ago, Facebook was the most important guy and today he is irrelevant. Five or six years ago Twitter lost relevance but it has made a huge comeback because of all the crypto traction, the Elon Musk traction, the political tractions, and more. I think for me, one platform that really stood the test of time is YouTube. Its brand-backed, creator-backed, brand-as-creator, and brand-as-storyteller types of offerings have been strongly consistent. The exact dovetail of that can be credited to short-form video, something we've seen a flurry of emerging in India with Takatak, Moj, Chingari, and Josh.

What does the road map for Zoo Media look like in the coming months?

To give you a brief understanding of our roadmap, after having established a strong position for ourselves in India and the Middle East we are currently setting up Zoo Media in North America. We are planning to offer a spectrum of integrated services in North America, including our best-in-class Web3.0, metaverse, and blockchain offerings. With this vision in mind, we are partnering up with independent agency collective Dawn and find ourselves among the leading independent agencies in and outside the US to bring our best-in-class marketing technology services to the shores of the US.

What is the one stand-out point you are finding in the participants this year at SAMMIEs?

A massive stand-out point in the participants this year at SAMMIEs is that they are finally being able to push the boundaries and be more experimental with their work. I think as categories have started expanding from a traditional point of view, it is pushing participants by the spins to start thinking out of the box. This is making them experimental with different innovations at the same time being more conscious about the fact that they need to be integrated into their approach as well as be very more outcome-focused.