When Sidharth Rao founded Webchutney, one of India’s top digital agencies, 23 years ago, it was way ahead of its time. Webchutney went on to have a glorious run, and was acquired by Dentsu in 2013.
Even as Rao stepped down from his role as CEO of the dentsuMB Group earlier this year, ‘The Unfiltered History Tour’, a campaign created by his team, made Indian advertising history at the Cannes Lions festival by winning an unprecedented three Grand Prix awards.
Punt Partners, Rao’s second entrepreneurial venture, this time with co-founder Madhu Sudhan, promises to be equally forward-looking as it takes on the nascent mar-tech space.
Here are excerpts from a conversation with Sidharth Rao and Madhu Sudhan:
Please take us through the back story of Punt Partners. How did the venture materialize and how long has it been in the making?
Sidharth Rao: Back in 1999, I saw the need for brands to shift towards digital, maybe a tad too early, and decided to start one of the first digital agencies in India. This past year, I’ve been getting a constant sense of déjà vu while watching agencies not able to fully grasp the urgency with which they need to build their marketing technology services stack.
Digital advertising surpassing TV spends across the world is the end of an era. But it’s also the beginning of a complex and constantly changing one, with the mar-tech landscape gaining significance. With this in mind, I reached out to Madhu Sudhan earlier this year. He has been a serial entrepreneur himself, and comes with a rich body of experience in technology services.
Over many conversations and iterations, we arrived at the conclusion that there is a $100 billion digital services opportunity at the intersection of marketing and technology that’s not being correctly addressed at this moment in time - an industry whose incumbents are either IT services firms handicapped without complete marketing context or traditional advertising networks who’re currently playing catch up through inorganic buy-out strategies.
Madhu Sudhan: Given how the next decade of digital marketing is expected to evolve, we’re foreseeing the complexities that brands will face and anticipating a giant wave of large-scale mar-tech service providers built out of India. And with Punt, we want to get a serious head-start.
What is your ambition for Punt Partners? What are your primary USPs or differentiators vis-a-vis competition in the domain?
Madhu Sudhan: We’re keen to build Punt as a ‘retention specialist’. Most legacy advertising agencies are focused primarily on acquisition driven by performance marketing solutions.
However, not only is acquisition less cost effective, but will ultimately plateau for brands. One tends to miss the quantum of first-party customer data that brands acquire over a period of time and it continues to remain under-utilized. Punt’s goal is to leverage this gold mine of data via technology to not only drive deeper engagements with customers, but also increase their lifetime value to incrementally drive business goals.
Can you decode the $100 billion opportunity that you see in the mar-tech space, which, according to you, is not being correctly addressed in the industry?
Madhu Sudhan: Four large factors contribute to this $100 billion opportunity we’re referring to:
• Death of the cookie era, making it even more imperative for brands to rely on accumulated first party data
• Cost of acquiring new customers is incrementally more than retaining them - in some cases, almost 6X more
• Most countries have already hit 100% net penetration, so the focus organically will shift to retention
• Finally, mar-tech is witnessing a surge of new age SaaS products, which need a specialist agency to advise.
In what ways will you fill this gap, and help clients to navigate the digital landscape of today? Which markets are you looking to cater to?
Madhu Sudhan: The end of the cookie era will throw up a lot of opportunities as brands increasingly will need to use first party data to develop their exclusive audience cohorts and targeting methodologies. In order to successfully do this, marketers will need to deal with an increasingly complex set of products in their sales and marketing stacks.
Most products today are point solutions that specifically solve for analytics, attribution, communication, intelligence, automation, enablement and engagement. Given how nascent the mar-tech landscape is, marketers will need time to build in-house skills to leverage these products to their fullest extent and ensure they work well with all the other products they are using. This will lead to a dual problem - poor outcomes for the marketer and churn for the product-provider.
Punt will address this problem by building specialist skills to ensure brands can identify and implement the right products and drive outcomes with optimal utilization of the mar-tech stack they have chosen.
What made you decide to launch Punt Partners in the volatile post-pandemic slow market scenario? What are the challenges before you?
Sidharth Rao: Any new venture, regardless of the macro-economic factors, is always a punt and ours is no different. However, both Madhu and I believe that there is a $100 billion digital services opportunity. We’ve got large ambitions here and aren’t afraid of putting in the work to get there.
Madhu Sudhan: We are looking at closing a seed round very soon and have commitments from a group of wonderfully sharp investors who are very bullish on the opportunity at hand.
What learnings from Webchutney do you bring to Punt Partners – both in terms of things to do and things not to do?
Sidharth Rao: At Webchutney, I had an extremely capable team that led the charter on most of our award-winning work. For me, it was always more important to back them, their ideas and let them do what they do best - be great solution-providers to leading brands. I’d like to believe that I adorned the hat of Webchutney’s CHRO, and was able to not only hire some of the best talent that the advertising business has ever seen, but also retain them so they could advance and shape the agency’s creative culture.
The goal at Punt remains the same - to invest in the most valuable asset, the talent. Particularly in a start-up, the founding team plays a key role in shaping the organization’s culture and ways of working. Both Madhu and I are determined to onboard talent with the right mindset and foster a culture where everyone can collaborate and thrive together.
Key members of your team at Webchutney now run an agency called Talented. Did you not think of roping in your earlier associates for Punt Partners?
Sidharth Rao: Punt is a mar-tech venture, with consulting and technology services at its core. Both Talented and Webchutney are creative shops, offering very different services from us. At Punt, we’re focusing on hiring the more ‘left-brained’ talent that can comfortably sit at the intersection of marketing and technology.
Tell us about the size and scale of operations at Punt Partners right now and some of the fundamental principles that guide the working of the organization.
Madhu Sudhan: Punt is structured around the key lines of business which are defined by the sales and marketing tech stacks. We are in the midst of building the initial team around new age SaaS platforms specializing in retention. For the legacy stacks, we’re looking to onboard industry veterans to incubate lines of business in Adobe/Salesforce which are key to several enterprises.
Punt’s ambitions include servicing the North American/UK/ Middle East markets with delivery from India. Our HQ and first delivery centre is being built out of Bangalore, with key members of the founding team present in both Delhi and Mumbai. Over the course of the next few months, we will also be announcing some key partnerships with mar-tech players and on-boarding a 30-member team to manage the relationships.
Sidharth Rao: We believe that the fundamental principles are most effectively exemplified in the organization’s culture, how the founders and founding team make decisions and the respect and kindness with which colleagues and partners are treated.
At Punt, we are committed to leading with empathy to ensure that every single employee feels a sense of belonging. Through our ESOP model, we will also ensure that our talent has more skin in the game and is given the opportunity to create long-term equity wealth.
As digital advertising pips traditional advertising spends, and the industry races ahead on the mar-tech front, some top marketers still hold out for slow advertising. What is your take on this and what is the trend that you see ahead?
Madhu Sudhan: Twenty years back, no one wanted to invest in digital and look at how the media landscape has evolved now. In every technology evolution, there will always be the early adopters and laggards. But the bottomline is that ultimately, everybody gets with the programme and adopts. The brands that identify the merits of retention early on and are willing to invest in technologies to support it will just be better positioned when the transition accelerates.
Finally, what does Sidharth Rao tell himself when he wakes up each morning?
Sidharth Rao: I’m not a morning person! Jokes apart, what keeps me going every day is the need to stay relevant in an industry as dynamic and exciting as ours, where the bar just keeps getting higher and higher for us.