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State of the industry: A view from the CEO, Entropia’s Prashant Kumar – ‘the death of marketing is fake news’

In conversation with Mumbrella's Dean Carroll, the founder and senior partner at the Malaysian independent agency Entropia – one Prashant Kumar – makes an eloquent case for the continuing relevance of marketing and its role as a force for good

State of the industry: A view from the CEO
Entropia founder Prashant Kumar

Many people suggest the media and marketing industry is in transition at best and managed decline at worst – but what’s your view on the trajectory and how fast the industry is changing?

“People are living increasingly mediated (rather than situated) lives today. So, in its larger definition, media is becoming more and more central to our lives.

“However, we need to see the media industry in its entirety if we do not want to be part of the declining segment within it.

“That marketing is dying is deep fake news, perpetrated by those who stand to profit from it. When you give a baby a name, that’s marketing. When you wear your best suit or the best makeup for a date, that’s marketing. It has been fundamental to human experiences for thousands of years and is set to become even more important.

“There is no doubt though that it’s in transition. Plumbing seems to overwhelm the poetry for now, but the infrastructure for a new language of marketing is being put in place. For instance, if you look at Gen Z and millennials – for them marketing has already changed for the most part. Creative personalisation, connected things, extended reality experiences, content marketing, UX, advocacy management, social commerce, and many more – are rewriting the landscape of trust, relevance, distinction and prestige.

“The expression has changed, but the soul of marketing still lives in incisive insights and powerful ideas.”

What is the next big thing coming down the line for the industry whether it’s a technology, market trend or something else entirely?

“People already live AI-infused lives in online spaces. However, marketing in general is still figuring out useful and systematic AI interventions in the customer journey. Extended reality experiences – especially AR and MR – are going to be all-pervasive eventually.

“And more things are going to be connected – people exchanging their personal data for extra relevance or utility from brands. Each of these are transformative in their own right. Some of these will exponentially scale up with the spread of 5G, with Korea, Australia, Singapore, and of course China leading the space.”

Can you explain the obstacles, as you see them, that need to be overcome in order for the industry to move to a better place?

“It’s important to outline first and foremost that ours is not the only industry being disrupted. In fact, industries like travel, hospitality, local transport, and tech have already been demolished and reconstituted.

“It’s the typical dilemma of disruption – can a big established company break itself apart and then remake itself (and would it remain the same company – the Ship of Theseus paradox). It is not going to happen in the world of quarterly targets.

“And so the biggest obstacle is often being publicly listed. A healthy balance needs to be found between the discipline that markets impose on us, and the bold long-term risks that change requires us to take.

“The other major obstacles are an unproductive culture of silos, and inadequate leadership. Change is frequently not an abstract, invisible organism. Frequently it’s hanging somewhere around, nibbling at the little nothings, in the zone of plausible deniability, until it’s suddenly too big. To be able to spot real change within the chaff that lies all over, requires insightful leadership.

“To be able to learn from it or acquire it, requires dynamic leadership. Once you acquire it, how you digest it, requires the right culture and conviction, but also a vision of how it will all come together as one organic whole – at both the macro and the micro level.”

What work or innovation during your tenure are you most proud of and why?

“We have built a company where it is difficult to make out whether it’s a consultancy or an agency. Half the revenues come from customer experience, consulting and ecommerce services and 90% of the revenues are digital.

“We have made bold forays into AI and IOT. It’s a serious model of the marketing of the future. And although I don’t think the work is anywhere near done yet, I am quite proud of the last three years building Entropia up from ground zero.”

What was the biggest mistake you’ve made in your career, and what did you learn?

“I don’t like to wallow in what-ifs. But I’ve had my share of mistakes, mostly the result of ‘more authenticity, less maturity’. I became a country head at thirty-two, and got to run the region at thirty-six.

“I was a man in a hurry, deeply passionate about my mission, and wearing too many hats. So it also meant that I wasn’t always the most diplomatic, or the smoothest maneuverer of organisational dynamics.

“The fact that both stints turned out great overall and that I still have the friendship and respect of my previous bosses, shows I didn’t do too badly. There were clearly ghosts I didn’t have to set out slaying, people I could have discerned better, or boldness I could have tempered with velvet gloves. But, in retrospect, I have no regrets, only pride and gratitude.”

What is the landmark piece of work by others that was a game-changer for the industry, in your view?

“Every once in a while, I am delighted by a piece of work (like the Kenzo World commercial or the Apple HomePod ad).

“But the one I saw at a rather early stage and still feel inspired by, is the ‘Apple 1984 Macintosh’ commercial.

"And Piyush Pandey’s ‘Kuchh baat hai zindagi mein’ [There’s something special about life) ‘The Real Taste of Life’ campaign for Cadbury Dairy Milk."

“Both are deeply uplifting, though in different ways. And their inspiration goes beyond the commercial motive. They are cultural artefacts.”

Given that marketing is an industry designed to create more consumption, can it be considered a force for good in a world of diminishing natural resources?

“Imagine a daily wage labourer in India at the very bottom of the pyramid, using a ten-cent soap and for a moment, feeling like he is Bollywood actor Shahrukh Khan (as he saw in an ad). Let’s not underestimate the meaning this brings to his life, however fleeting.

“In many ways, the question of consumption is closely linked to human dignity and a sense of significance. It could also be one reason why the deeply deprived billions are not waging civil war against the top 1%.

“Religion used to be the opium of the masses. Now, consumption is the new religion. And it’s not too bad – at least people don’t kill each other in the process. Marketing has mostly preached love, idolised goodness and spread positive values and behaviours. It’s a civilising force. It has been a win-win between business and society so far.

“It’s wrong to train the Greta (Thunberg) gun at marketing. She is in fact herself a marketing idea; no doubt, her issue is much bigger.

“Should people consume less? Yes, rich people need to consume a lot less – the poor don’t have money to consume even the essentials. We need a cultural revolution in developed economies to effect that. The rich in developing countries will follow automatically, as they seem to mostly ape the developed world.

“We need to create an alternate ladder of meaningful minimalistic pursuits that the rich can keep themselves busy with. Most oriental cultures have a strand of heritage built around asceticism and numerous communities living as one organic whole with nature. We need to make it mainstream.

“And it will be lovely to market that thought with the best of the latest marketing tools, till it pervades people’s minds, and the contemporary cultural fabric.”

Is brand purpose a worthwhile goal?

“It indeed is. If it means companies try to drive positive societal change in their brand communication, it’s a good idea. And though some brands may be discovering it today, there are many who have stood for progressive values for decades – for instance, some of the best Coca-Cola communication over the years have been about universal connection and stubborn optimism.

“But, if by this you mean businesses should have fancy CSR programs, aren’t all businesses meant to serve a purpose to start with? If Walmart has kept American cost of living low for four decades, isn’t that an incredible purpose served? Or should Walmart be building schools to have brand purpose?

“Would it not be better if it uses those funds and its core expertise in supermarkets to also lower the cost of living in Central Africa by selling cheap groceries and living essentials there (yet making a sustainable profit) or just offering better benefits to its shop floor employees?

“On the credit side, companies create economic value (profits, taxes, salaries, vendor sales) and social value (job creation, fair procurement practices, fair employment practices). On the deficit side, there is harm to the planet, automation of jobs, and so on.

“The SEC classification of a company should be on social value added and economic value added. A brand has a purpose if it creates maximum economic and social value with minimum damage on the deficit side. That’s sensible CSR. That’s delivering your purpose by focusing on your core competitive advantage within the bounds of the most ‘planet-positive’ process possible. In fact, tax policies should be a function of such SEC classifications.”

If you had to pick one thing that has damaged the industry as a whole, what would it be?

“It would probably be the inability to talk and deliver the creative performance conversation early enough with rigour and consistency. It opened windows of vulnerability, through which the industry has been under relentless attack from consultancies, media owners, ad tech players, martech and data players.

“What we need as an industry is a resounding pushback against the naysayers, by building a pervasive CFO-class performance culture.”

Do you think scammers should be banned from awards shows when they are caught, just like doping athletes face sporting bans?

“Interesting idea. Habitual scammers are often self-serving narcissistic escapists, who do not play fair, and chase goals that are not aligned with business goals. Many scam-infested agencies have become echo-chambers.

“Steve Jobs used to say – real artists ship. In the world of UGC, it’s difficult to be more original than random people, so creative leaders can only have an edge on curating, developing and crafting ideas that sell.

“In a much-celebrated effectiveness award last year, I noticed that seven out of twelve winners were non-profit cases. Is it any wonder many agencies are struggling with profits?”

What makes for a great client?

“Great marketers have a keen understanding of their business, yet have a healthy dissatisfaction with where things are. One helps them discern an idea that will work, the other allows them to be bold and ambitious.

“Great client CEOs understand that marketing is a soft science, that marketing is not equal to sales, and by definition will entail higher risks, but can also bring much higher returns.”

What makes for a bad client?

“Clients who don’t treat their agency teams well are the worst lot. My advice to them is to terminate an agency you do not like, but you have no right to be unprofessional and uncivil, however stressful things may get. The second type are the highly disorganised ones.

“Frequently, the whole ecosystem around them suffers because they are not disciplined. And then there are clients where procurement tries to squeeze every penny from their agency. These are the clients who frequently feel let down by agency service quality. Professional services can’t be priced like potatoes and steel ingots. If you do that, often procurement gets fat bonuses, while marketing ends up with the shorter end of the stick.

“And yes, bad clients are a hidden opportunity cost to their businesses.”

Can you outline the opportunities ahead, as you see them, for the industry?

“Just as the agency world is competing at some level with consultancies, tech and data companies, these interactions also offer lucrative opportunities. The future belongs to a blended model. There are tremendous opportunities on the left-brain side, without letting go of our strengths on the right-brain side.

“In our own organisation, we have moved to a ‘create-code-count-make’ model of marketing conception. Where relevant, we compete with consultancies on upstream projects.”

And, conversely, what are the big threats to the industry – whether its consultancies, in-housing, technology or something else entirely?

“I have frequently been sceptical about in-housing everything in the long-term. Too often, clients end-up building huge inefficient overheads without external benchmarks or flexibility. When you hire a team or a set of skills, you are limited by it. It’s an ironic regression when the same digital transformation context is used to move the IT infra more and more to the cloud.

“In some cases, clients need to have control over their first party data, however, with the right client-side leadership, I do not see a conflict between that priority and collaborating with an ecosystem of partners to make the best of creative, media, tech or even data opportunities.

“I have heard start-ups wax lyrical about hiring a big in-house team because of speed of delivery, etc. The truth is, many of these same start-ups are wholly unwilling to commit to a proper dedicated team retainer on the agency side (at less cost), so that the speed can be matched.

“Sometimes agency side leaders switch to client side, and hire a lot of agency people to end-up creating little agency set-ups within. I am unsure how these set-ups are different.

“I believe that when marketing is busy doing agency’s job, they are doing less of a marketer’s job. So, each time you find a marketer occupied with in-housing, try finding the last time they had a great marketing strategy – which to me can bring a much greater shift to the larger business.

“Technology is a threat if you don’t know how to harness it. Consultancies are a threat, but they will compel the agencies to get more whole brain and upstream. And agency hiring policies will finally start looking a lot less like cozy, incestuous musical chairs.”

Are you paid well, or not enough, by your employer for what you bring to the table?

“Well, I am my own employer. And being a fair and competitive employer has allowed us to attract a bright bench of talent and scale up rapidly to 220+ people, if that’s some validation.”

Looking to industry talent – is it more difficult now to find the right people now than say 10 years ago – given the pace of technological change – and how do you see this playing out over the next decade?

“The battle is definitely intense with all the start-ups, client digital teams and tech giants fighting in the same arena. But, of course, given that we are not just about advertising, we are casting our net in a much wider pool. Many of our hires come from places like Accenture, Oracle, product start-ups and other new age companies. Our bigger problem is finding people in edgier skill areas (like AI or big data), where the talent pool is quite limited.”

Mental health is a taboo topic for the industry, but given the long hours, short deadlines and sometimes unreasonable demands on staff – are you as a leader doing enough to combat the effects of stress within your organisation?

“Some of the above are unavoidable if we have to remain competitive. However, we have tried to build an internal culture that is high on empathy, and which works like a safety valve.

“We keep it easy-going, collegial, transparent and playful. Anyone can walk up to any senior and have a chat about their issues and frustrations, and not just with HR or your manager.

“Our leaders are highly engaged with the work as enabling collaborators, rather than hands-off order givers. The idea is that client interface can be stressful, but when you are back in the office, you should feel like you are among friends, who are in it together with you. And that your hard work is recognised fairly. We also have a circle of happiness, that does a lot of things to make people happy.”

If your children wanted to enter this industry, would you say it was a good idea or a bad idea?

“It truly is up to them, but why not? After all, here is an industry where people and culture matter more than hard products, systems and bureaucracies. It’s a young-at-heart industry where you work with the coolest content, latest platforms and technology daily, that young people would kill to make a living out of.

“It’s also an industry where you’re thinking about mommies and their self-image in the morning; about how a new car makes macho men feel in the afternoon; and the insecurities of a 15-year old in the evening. When we make mistakes, no one dies. And we spend most of our time thinking about how to bring more joy and meaning to people with our ideas.

“It’s a great industry, yet it’s never lacking in self-criticism and humility. As I said before, people are living their lives through media. And most media are dependent on advertising dollars, so we have a central role to make the best of that. Done the right way, this industry could be an envious place to be in.”

I’ve heard industry leaders state that ‘everything will be programmatic soon’. Is that a good or a bad thing – and why?

“What they really mean is that all the traditional media – like TV, newspapers, radio, out of home, etc, will go digital eventually. And hence they can be bought, sold, targeted and executed via automated systems.

“To that extent, it’s correct and it’s a great thing, because it makes the operational part of delivering brand messages a lot smoother and seamless. But if anyone means that all ‘marketing’ will become automated by some omnipotent AI, that’s a whole load of bullshit.

“To start with, the day marketing becomes fully automated, it will not remain marketing anymore, but will become something between sales, IT and finance. Such visions are a cynical conspiracy by certain engineer-profiteers, who treat human ingenuity as the epsilon in their equation (the representation of error component).

“This reminds me of the drunkard who was looking for his keys under a lamp post, because that’s where the light was, not because that’s where he dropped them. This is the reason why 95% of digital ads are junk ads, and Adblock is in such vogue.

“Any true marketing practitioner knows that for the same delivery efficiency, a top quartile creative can have many many times more impact on sales than the bottom decile (in one normative study it was found to be 16 times). In fact, even assuming ceteris paribus on creative, an understanding of media impact at different points across the funnel remains fuzzy in general even for the most rigorous data-driven attribution techniques.

“When digital platforms want to measure change in ‘desire’, they go back to research techniques that have been used for at least seven decades (albeit with fancier labels), and hence present some of the same issues, that resulted in the famous quote: ‘Half of my advertising is wasted, but I don’t know which half’.

“Marketing will always remain whole brain, and it’s with originality that brands must carve a unique image for themselves. If you can automate, you can replicate; and if you can replicate, it’s not original anymore.

“Tech companies will sell the same automation to every one of your competitors, and then you are back to square one – how is my brand and marketing going to be different?”

With internet peer reviews now driving the last mile to purchase for consumers, is the traditional marketing funnel dead?

“No. Peer reviews may become more important than they have been, but there are several other touch points in the customer journey, that the eventual purchase ought to be attributed to. Of course, if you talk to peer review companies, they may tell you all credit for the sale belongs to them.

“It’s like how, for years, search engines claimed all credit for sales that ended through them. That scam worked for many years, until video became important and the attribution logic changed in perfect sync.

“The marketing funnel is not dead. The development of new platforms and channels – many highly measurable – just means it has become a lot more complex and there are newer ways to influence choice.

“With the fragmentation of media, content, devices, point of sales, payment mechanisms and delivery mechanisms – there are dozens of customer journeys in every category and each have their numerous intervention opportunities. The funnel just got a lot more fun.”

How valuable is creativity in the modern industry landscape so dominated by technology and automation?

“Creativity is the soul of marketing. Technology brings new ways to target, express, measure and execute that creativity. The relationship is complementary, not supplementary. Technology will enhance creativity, just as it should enhance human happiness – and both are connected. Those who believe otherwise are gazing at the tree while the mythical apple is falling. I would like to believe that 2020 is the comeback year for creativity.”

Are you optimistic or pessimistic about the rise of artificial intelligence and its effect upon your industry?

“People’s appetite to crunch more life per life is apparently vast. And AI can be a delightful enabler of all that which is repetitive or predictable, thus leaving more time and attention for more stimulating stuff. Like creativity. Or food. Or sex. Or love.

“In the same vein, AI will enhance our productivity eventually. It will make things possible that we can’t do right now. And that’s great. It will cut out the operational parts of our industry, and that should make us more productive. Hopefully people have to do fewer hours in a day. Anyway, after over ten million miles, Waymo still can’t learn enough driving to match what humans can learn in a dozen or so hours, so let’s not get too carried away here.”

Virtual personal assistants and artificial intelligence – should marketers be scared or view the technology as an opportunity?

“Some time back, Sentient, our data unit, developed an AI-based colour selection app for one of our clients. AI can help brands solve customer needs gaps, that are hitherto unaddressed. In another case, we used AI to ascribe food preferences for a vast ecommerce database, so promotions could be personalised to them. And you can find so many other uses for AI at different points in the value chain.

“The only reason to be scared of AI or machine learning, is lack of curiosity. AI is not just an opportunity, but could become a major competitive advantage for brands in the years to come. However, when it comes to what’s here and now for AI, there is a need to separate reasonable excitement from the profiteering hyperbole today.”

How long will it be before ‘voice’ becomes a force in marketing?

“Voice has been around for some time, so it’s sort of past the hype cycle. I do not see it becoming a central force, but it will be a useful interface no doubt, especially with ever smarter voice and language algorithms.”

Esports – is it an opportunity or waste of energy for marketers?

“It’s clearly huge in many countries now, and brings together unlimited fantasy, spectacle and adrenaline in a potent combination. It definitely is a great opportunity. But we are still at an early stage in terms of marketing monetisation for mainstream brands. There is a lot more to come.”

New millennial platforms are emerging like Twitch, TikTok and Snapchat – which of them, if any, will own the future?

“Snapchat is not emerging anymore; it has been around for some time. All in all, each of these platforms will either hold a niche in due term, or become overwhelmed by a yet-to-emerge platform.

“If Google had not acquired YouTube, its growth would have slowed down a great deal by now, as its own game-changing invention – the search engine, is already stagnant by Silicon Valley standards. Similarly, if Facebook had not acquired Instagram and Whatsapp, it would have been a lot less sexy. In fact, Whatsapp may have morphed into WeChat by now and overwhelmed Facebook.

“So, the trick to sustainability in Silicon Valley is to scale fast, monetise fast, have really fat backers, and relentless hype to boot, to eat up any potential competitors before they are big enough to kill you. TikTok must check all four for several years before it can lay claim to the throne. There are many a slip between the cup and the lip, and first it has to try to make it through Trump II (he may not like China collecting so much data on all those Americans on TikTok).”

The Google and Facebook duopoly – do you love or hate it?

“As a member of civil society, I worry that Facebook and WhatsApp spread outlier hate faster than mainstream love, and sensational untruth faster than boring truth, and that its algorithms encourage a black and white view of the world.

“But on the whole, I still love them because they have brought a lot of joy to society by enabling real time universal connection and simulating a global village. Social media almost works like a planetary brain with each of us as individual neurons in this machine. Eventually these are platforms to build a seamless hyperaware global society.

“Though I do hope it’s not at the cost of diversity or decentralisation of global power or liberal democracy.

“As a professional however, love or hate is too strong a word. They have brought a new era of communication and accountability. So, I have always seen them as wonderful opportunities. But like every industry, competition is always good, as it drives innovation, flexibility and productivity. It’s important that regulatory pushback does not throw the baby out with the bathwater.”

Finally, which international market will lead the way for your industry over the next 50 years and why?

“Korea, being at the forefront of the 5G roll-out, is building the ecosystem of the future, which everyone else will be able to learn from. China, with its lax privacy laws, and clear government mandates on new ecosystem compliance, but also its general exuberance about anything new in tech, will lead the future in many ways.

“India, with its deep and diverse content, and creative industry with 3.5 billion potential global catchment area, will have an important role too.

“And last but not the least, the US, as the most open architecture system for innovation – in terms of culture, depth, diversity, scale, global acceptance and funding – will continue to be a leading force.

“On second thought, to be able to see fifty years hence is almost impossible. Fifty years back, no one would have foreseen the rise of China as the other superpower (or Kissinger may not have got the Nobel prize) or the rise of Asian tigers. In fact, twenty years back, no one would have possibly foreseen Brexit or Trump.”

Prashant Kumar is founder and senior partner at the independent agency Entropia – and is based in Malaysia

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