Vivek Bhargava on Building Communicate2, Betting Early on Digital, and Making Bold Entrepreneurial Moves
Vivek Bhargava’s ability to add value to his clients’ businesses has been a defining factor in his success. Betting on technology before it became ‘the thing’ and riding that wave for decades is not easy. It takes adaptability and resilience, he reveals.
From quitting his family business, founding Communicate2, selling it to Dentsu and decades later, quitting his cushy job at Dentsu to co-found consumr.ai (ProfitWheel), a SaaS platform—he has made the most unexpected of decisions.
How did he know his leaps of faith would yield him success? What kept him going during tough times and financial crises? He answers it all on a podcast with Gautam Shekar. Watch the episode in its entirety on YouTube @TheSellSide.
Edited excerpts…
What made you start Communicate2?
When I was in the US, I was fascinated by how the internet was evolving. I realised that Indian companies weren’t good at marketing communication. And using technology for marketing communication was an even bigger lacuna. In India, we are taught to be humble. But humility isn’t good for marketing. The US, on the other hand, is probably a culture built on marketing.
In 1997, I established Communicate2 with the aim of helping businesses harness the power of digital advertising. It was a bold move, especially since digital marketing was virtually nonexistent in India, at the time.
I'd gone for this pitch where I wanted a company to make a website. So after a two-hour pitch about the internet and how the website can benefit them etc, the chairman of the company said, “Okay, Vivek, I'm convinced….” then added, “I'm convinced to get an internet connection for the company.” Unfortunately, I wasn’t a sales guy for internet connections!
Then, we started making CD ROMs for companies. Basically, we would take their company brochure and put a CD ROM in it, which would have a video. We sort of became the ‘CD ROM King’ of early India when people were still not making websites or doing digital marketing.
Communicate2 is remembered for its work in search engine marketing (SEO). How did the transition from CD ROMs to SEO happen?
I was fascinated by how Google AdWords (now known as Google Ads) worked. Conventional media had about three main challenges. First, it showed you an ad for a washing machine when you wanted to buy a car. Secondly, the Unilevers of the world would get an 80 percent discount on large volume buys, while an SME would have to pay full price. Thirdly, there was no measurement.
What AdWords allowed you to do was target intent. So, if you search for a washing machine, you get ads on washing machines. Secondly, it is an auction buy and the auction democratises the buying process. Thirdly, you could actually measure conversions. So I knew that this was going to become very big and started putting a lot of effort into building the expertise. For the first 10 years, we didn’t do any SEO. We just became known for paid search marketing and we were the largest SEM agency in the country.
One day I realised that if you stop paid search today, your traffic stops completely tomorrow. But if you stop SEO today, your traffic kill continues. With SEO, over a period of time, you build a certain domain and search result reputation. Because when people click on your link, Google shows you more. That's when we shifted our focus.
I've heard that you used to charge a lot more than other companies. What made your clients stay?
This is something that I'm proud of. If you look at the digital industry, what happens is you are giving 90% to 95% of the cost to the platforms. And 5% is spent on the agency. Suppose you reduce that 5% to make it 4%. How is the agency going to make a profit? Either they're going to spend less on the platforms or they're going to hire inferior talent. I've had so many detailed conversations with people and I proved to them that by spending more money with us, you will save on your 90 and 95% media cost.
How did the Dentsu acquisition take place?
I used to go for conferences across the world where I met this gentleman Nigel Morris. He was one of the top guys in Dentsu and said to me, “What you're doing in India is very exciting. If you ever find yourself in London, come meet me.” I changed my flight back from San Francisco to India to go via London and landed up at his office. One month later, they wanted to acquire Communicate2.
Unfortunately, this conversation happened in 2007-08. We signed the definitive agreements, threw a launch party and then the Lehman Brothers crisis happened. Almost 80% to 90% of the revenues that came from BFSI fell through. Dentsu couldn’t complete the transaction and it was a pretty trying time for me. But in hindsight, when we actually sold it, in 2012, I was a much more seasoned entrepreneur.
I've always believed that happiness brings you success, rather than success bringing you happiness. As an entrepreneur, you have to show a lot of passion and enthusiasm about your business. When you've done the right things and you have supported your clients, taking care of their best interests, just because they’ve stopped spending money for a year, doesn’t mean that relationship is going anywhere.
And in a way that financial crisis was helpful because companies couldn’t afford conventional media and started spending on digital. And when they saw the results, they increased digital spend thereafter.
Is there a framework you use in guiding you to make decisions?
I have actually done a comprehensive course on decision-making called ‘Decision by Design’ by Shane Parrish. The first chapter tells you that before you make a decision, you have to identify the question you're trying to answer.
A lot of times, we jump to solutions while we've not articulated the problem. We use different lenses when making decisions. There’s logical, emotional, conditioning or the way you’ve been brought up, and ego and vanity. Now, there is no problem if you make a decision based on ego and vanity, as long as you're aware of it. Additionally, don't make it in the heat of the moment and if there is high risk, there has to be high reward.
news