Raising Piranhas
Courtesy of the Archive of zoomFinance Journals, Oct-13-2000 11:30:28
The following interview was conducted by Steven K C Poh, the CEO/Principal Consultant of i2Media Sdn Bhd, an integrated marketing communications specialist, on behalf of zoomFinance.
It's always a special time when I meet up with Henry Tan. For starters, we have quite a few things in common. We were both from Malacca, classmates at high school and majored in the same field at college. But he did his in Australia and I completed mine in the U.S. Henry, who is currently the managing director of Mindshare, a media investment management company which is part of the WPP Group, PLC, has 15 years of experience in the fields of media, marketing, advertising and sales. When I first interviewed him for a story for Malaysian Business many years back he was a media planner at Ogilvy&Mather Advertising Malaysia. He has come a long way.
A double-degree holder in marketing and communication from Monash University (formerly known as Chisholm Institute of Technology), he was the youngest media director and board member of O&M. After O&M, he joined HVD Entertainment, Malaysia's premier television production company, to establish and head the marketing division. His four-year stint at HVD saw the revamp and creation of a successful new domestic and global image.
Besides leading international marketing and promotions teams to Cannes, Cape Town, Milan, Hong Kong, Cairo and Santiago, he has also spearheaded and presented major company projects to investors and the Government. He continues to be, what I would consider one of Malaysia's leading strategic media minds. I had a chat with Henry recently, partly to catch up on old times as well as to pick his brains on what he thought of the Internet and how corporations can effectively use it as part of their strategic tool in the digital marketplace. Below, are excepts of the discourse.
Q: Many people talked about the knowledge economy or k-economy as they often call it as if they know exactly what it means. The truth of the matter is they haven't a clue. On the corporate horizon, the New Economy is also touted by many as if it is not embraced will cause a major downfall to these companies. As an advertising agency dealing with the new medium - the Internet - what is your greatest challenge by far?
A: I think that the first part is absolutely correct. The truth of the matter is that most people don't know much about it. A lot of people have different visions of it. Most people have a wooly idea of it. More importantly is the second part of your question. How do we see it as a new medium and that if we don not embrace it, it will cause our downfall. It's like a fear tactic.
Q: Let's be honest. Is it something that the media, advertising and PR people say in order to get their clients to embrace this new technology or is it a real concern?
A: Let me address the macro picture first. I will then get to the advertising agency's point of view. The first thing that one must understand is really what are the changes. I think there's a revolution taking place, be it the k-economy or the e-economy. But they can all be summed up as the communications revolution. If you have the bird's eye view, that's exactly what it is - a communications revolution - a revolution on how people relate, reach out and respond. To me, the core issue in this revolution is that the way we communicate is rapidly changing. Everybody needs to communicate. It is a basic human need.
Q: So it's really communication and not technology that should be taking center stage.
A: Definitely. At the macro level, almost everything falls under the umbrella of communications. The way we communicate today is undergoing a tremendous change. Let me try to explain this revolution in layman terms. For example, the e-mail has now become a part of the way we work. It's now a means to communicate with everyone quickly. It's also actually one of the main causes of what we have called information overload! Talk about mass dissemination. Also because of e-mail, notice boards have become antiquated. I dare say that only a few years ago, notice boards were very important for many companies. They were the place to be - to congregate and discuss matters. Today most organizations do not have a notice board. Just this simple example shows that the way we communicate has changed drastically.
Q: Very interesting indeed.
A: Let's now look at the bigger picture. Take marketing communications, for instance. Let's say that last time you wanted to communicate to consumers, there are very clear vehicles to use - the newspapers, radio and television. They all have their pros and cons. Today that is all changing as well. And who is communicating is changing too. In the past, the manufacturer produces and distributes via retailers and finally to the consumers. But the manufacturer communicates via television directly to the consumers. Now with the various modes of e-communications, a manufacturer can initiate direct transactions with the consumers. The retailers also communicate directly with the consumers. Everyone is doing retailing. This has completely changed the ball game.
Q: How so?
A: The implication is that suddenly, there are no more geographical boundaries. Now you can buy the latest book from anywhere. You can even find the cheapest supplier. All these things were difficult to do in the past. Today, everything is only a few clicks away. Since retailing capitalizes on mass communications, this will change everything. Consider this: even photographs are going digital. So if you don't get onto this revolution, you will miss out on the new lingo that the world is on. The methods are different and the factors of success are different. People ask me all the time, what do you think is the biggest impact of the Internet. I'll tell them this: the Internet has the uncanny ability to simulate talking to you one-on-one on a mass level. That is probably the single most powerful characteristic of the Internet. No other medium in history has ever had this ability.
Q: So what should CEOs do to capitalize on this ability?
A: Just to illustrate this power, let's look at one-to-one selling. It has been considered one of the most powerful means of selling. There is eye contact, persuasion and all the body language. Why then did personal sales give in to mass advertising? The reason: personal selling, though effective was inefficient. How many people could you reach? That's why you use mass advertising because it is very efficient in terms of reach but less effective when it comes to real selling. But the Internet can now engage you one-to-one on a mass scale. It seems to have that formula to combine the merits of personal selling and mass advertising. And that is incredibly powerful. From an advertising point of view, I don't think it [the Internet] has been fully tapped and whoever best capitalizes on this added characteristics of the Internet would succeed. The key word here is interactivity - the ability to engage the audience and get them to participate. No matter how powerful television or radio is, it is a one-way communication.
Q: Why is interactivity so important in this case?
A: Let's say, for the sake of our discussion here, you are a spy, and your biggest strength is that you are a master of communication. You can really sell your cause and influence people. One day you are caught by your enemy, what do you think is the cruelest thing they can do to you?
Q: Take away all your means of communications?
A: They would probably cut of your tongue! So you now have your eyes and your ears, meaning that you can receive but you cannot respond. It's your ability to respond that has been removed. So even if you are a master communicator, you cannot provide any feedback. And that is frustrating. This is what television is all about. You can receive but cannot respond. I think the Internet is the other way around. We never had it before. So we are at the early stage of 'speaking'. Again, whoever capitalizes on this ability best will be the one who succeeds.
Q: Does that explain why the adoption of the Internet in Malaysia is so slow; because we are still trying to figure out what to do?
A: I think that there are a few issues here - infrastructure issues as well as the level of market sophistication. Taken as a whole, yes, the nation is a little on the slow side when it comes to Internet adoption. There are, however, pockets of excellence. There is some pioneering stuff going on as well. On the more macro level, the adoption is slow because most people are really not sure. Being creatures of habit, we stick to what we are familiar with. And we seem to have a culture that does not encourage and reward innovators.
Q: Is the Internet an IT solution or a media solution?
A: I would say it is an IT-driven media solution. But then again, like everything else, if it does not serve a commercial interest, then it will not go far. The implications are on the way we communicate. Just imagine how communications will be 30 years from now!
Q: How would you describe the landscape?
A: The thing to bear in mind is that all adoption is evolutionary. People need to evolve and move from one stage to another. That is the context to look at things. While trying to look into the future, we still have to look after the problems we face now! Today and tomorrow are still very real things. So the future would not be meaningful until we have solved these problems. I think that is partly because a lot of people are second guessing what will be the impact of the Internet. Think about future communications without boundaries and restrictions. After a while, it just becomes a part of life. This new stage will take some time to become the norm. The future generation will communicate so differently from the way we have. It's a mindset change!
Q: What is the single largest challenge when you talk to clients now?
A: It is to encourage them to go out and experiment with it [the Internet]. I use this word because most people like to do things with people who have experience, so that it won't be a case of the blind leading the blind. Unfortunately when you look at the Web, it is a new frontier for everybody. You should go out and stake your claim. Who knows what is out there. This challenge requires people to go out there and look at things differently - approach the marketplace differently. It's a very natural thing to hire someone with experience when we embark on a new project. You do it and most people will feel more comfortable with it [hiring someone with experience]. But this is the old paradigm. As far as the Internet is concerned, the U.S. is only a few years ahead. I believe we can still leapfrog. That is the mindset we have to have.
Q: There is still hope yet for us is what you are saying?
A: Absolutely! But anybody who says I know it all is an absolute liar! I have met many experts and they would say they only know a few areas well. The Internet is like a new mysterious continent with many potential discoveries. That is what turned off some people. It's scary. But at the same time, it's exciting. It gets the adrenaline flowing. So when I hire people for a job these days, I place a greater importance on someone's ability to learn on a job than experience. The new environment requires someone who is always questioning things: how can I do this better, how do I make it faster and so on. This person will be the one who will be innovating all the time. This is what I mean by frontier people.
Q: So what exactly is holding back the people in Malaysia from exploring this new frontier? The inertia seems to be very strong.
A: There are two ways of looking at it. Not to do it [exploring the Internet] is a folly, but so is rushing straight into it. My simple advice is really to always take a step back and rethink before engaging. Ask yourself what the implications are? There are so many distractions and you have only limited resources. You have to identify the key areas, which are important to you and experiment from there. As you move along, you improve and keep going. There really are a lot of distractions from the Internet. There are so many angles to think of. People have to take a step back and ask: what is the most important thing the Internet can do for my business?
Q: How will Malaysian companies benefit from this revolution?
A: The communications revolution is changing the rules from domestic and territorial to borderless and global. Does this mean that the world is your oyster? Even though you have the access, it doesn't mean that you have to or should. To say that it is a jungle out there is probably the biggest understatement. My point is that what is your niche if you are offering your product to a global market? If you are trying to sell a generic product, you will be totally lost. It is so easy to get lost in cyberspace. So even with global access, can you succeed? I would advise people that it would be better to be very specific. If you want to go global, you should have a global appeal that is very specific. This I can see working. But it doesn't mean that everyone will succeed! It's definitely a challenge to get noticed - especially in the digital marketplace.
Q: What about people with businesses that have no global appeal?
A: If you have local appeal, employing the Internet is still strategic and useful.
Q: But you still have to contend with the cost of setting up the infrastructure.
A: Yes, but a lot of things don't work for two reasons. Firstly it is not the right proposal. The proposal could also be premature. The right timing is also critical!
Q: What are some of your observations on the advent of this new medium in advertising and how would you advise your clients to look at this new medium and try to blend it with existing ones?
A: The analogy would be like driving a manual car. When you change a gear, how do you manage between a clutch and the accelerator? My point would be to put your foot on the accelerator for the new medium but don't instantly remove the clutch from the old media. Your car would then jerk and stop. So if you want to move ahead, gradually do it. As of now, the old media is still an important component of your total media strategy.
Q: Because it is a new medium, you can't be devoid of content?
A: It is really more than a medium! It's a whole way of communicating. I think what we are seeing happening is definitely beyond that. The Internet is a two-way communication. Human beings have a need to exchange, to relate for that matter. The Internet has completely changed the way we communicate. It's a social need that the Internet is fulfilling. The way I see it, everyone out there is a content provider.
Q: User-generated content?
A: Absolutely.
Q: Looking at the Malaysian cyber landscape, what are your comments on online advertising? Is there a market here?
A: A lot of people say that there are a lot of dotcoms out there, which have expired. I don't think it is true. Will the new kind of economy succeed? I think absolutely yes. It will. Will many people fail along the way? Again, yes. You know it [the Internet] is the future, and how things will become. You might see less than one percent success rate from the dotcom industry. The kind of mortality rate toward that future will be very high. Those that succeed will be very successful. Again, I say it is a communications issue.
A word of caution here, dotcoms hoping to make money from online advertising are in for a tough time because it is really a case of too many web sites chasing too few advertising dollars. When you look at the online scene, every Tom, Dick and Harry is also a media owner. Compare this with traditional media where there are only a few players. It is easy to be the dominant force when there are fewer players. The Internet is not about one dominant player, but many piranhas nibbling away. It is the collective force of the individuals. Therefore to become a big player is very tough. I foresee a lot of rationalization and regroupings. But it is not about casting a wide net. It is about small bites and if I have many piranhas then I will collectively make a big impact. So the question is this: how many piranhas do you own?
