According to Anurag Bansal, chief financial officer (CFO) and chief operating officer (COO), DDB Mudra Group, today, agencies face heightened competition from clients’ in-house marketing teams and boutique agencies specialising in niche areas.
“Agencies are now focusing on delivering personalised experiences tailored to individual preferences, and leveraging data-driven insights to inform their creative campaigns. The emergence of new players in the advertising ecosystem, such as tech giants and social media platforms, has disrupted the traditional agency-client relationship,” said Bansal. As a result, agencies are looking at identifying new revenue streams, and optimising resource allocation and costs, he added.
Edited excerpts from the interview:
Tell us about your career trajectory? What led you to advertising and finance?
My career has been a journey of continuous learning and growth. I started in international trade and corporate finance and spent 12 years there. Then, I moved to advertising and media in 2008. I’ve navigated through various roles and challenges, which have shaped me into the professional I am today.
The allure of the advertising stems from its dynamic nature and its place at the intersection of creativity and business. My decision to join this field was fuelled by a passion to merge creativity with financial acumen and discipline, and a desire to contribute to marketing and advertising. I was impressed by the emphasis on storytelling and the power of branding to influence consumer behaviour.
How has the role of a CFO in an ad agency changed over the years? What does the job entail today? Where have you seen the biggest changes?
Over the years, the role of a CFO in an advertising agency has undergone significant transformation. Traditionally viewed as primarily responsible for financial management and reporting, the modern CFO now plays a multifaceted role at the intersection of finance, strategy, and operations.
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Initially, CFOs were tasked with ensuring the financial health and stability of the agency, focussing on budgeting, financial forecasting, and cost management. However, with the advent of digital technologies, changing consumer behaviour, and increased competition, the role of the CFO has evolved to encompass much more. Today, CFOs are strategic partners to the agency’s leadership, providing valuable insights and analysis to support decision-making.
They are involved in shaping the agency’s overall strategy, identifying growth opportunities, and mitigating risk. Additionally, CFOs play a crucial role in driving operational efficiency and optimising resource allocation. Furthermore, the modern CFO is often at the forefront of digital transformation initiatives, leveraging technology to streamline processes, enhance data analytics capabilities, and improve financial performance.
They are also responsible for ensuring compliance with regulatory requirements and industry standards, particularly in an increasingly complex and regulated environment. In essence, the role of the CFO in an advertising agency has evolved from being a financial steward to a strategic partner and catalyst for growth. By embracing this evolution and leveraging their financial expertise, CFOs can help navigate the challenges and opportunities of the rapidly changing advertising landscape.
How do other departments and functions in the agency view the role of the CFO? Where do you have the best synergies — in terms of working with other functions?
The finance function is integral to the agency’s operations, and collaboration with other departments is essential. While there are areas of strong synergy, there is always room for improvement in fostering cross-functional partnerships.
What’s your take on how the agency business model has evolved? What have been the key changes and disruptions?
The agency business model has undergone significant evolution in response to various external factors, such as technological advancement, shifting consumer behaviour, and changes in market dynamics. These transformations have compelled advertising agencies to rethink their traditional approaches and adapt to a new era of marketing and communication. One of the primary drivers of change in the agency business model is the digital revolution.
With the proliferation of digital platforms and channels, agencies have had to expand their service offerings beyond traditional media and include digital marketing, social media management, content creation, and data analytics. This shift has not only expanded the scope of services offered by agencies, but has also necessitated a re-evaluation of revenue streams and pricing models. Furthermore, changing consumer behaviour, such as the rise of ad-blocking software and preference for personalised content, have forced agencies to adopt more targeted and innovative marketing strategies.
Agencies are now focussing on delivering personalised experiences tailored to individual preferences, and leveraging data-driven insights to inform their creative campaigns. Moreover, the emergence of new players in the advertising ecosystem, such as tech giants and social media platforms, has disrupted the traditional agency-client relationship.
Agencies are facing increasing competition from clients’ in-house marketing teams and boutique agencies, prompting them to differentiate themselves through specialised expertise, creative excellence, and strategic partnerships. In this evolving landscape, CFOs play a critical role in ensuring the financial sustainability and profitability of the agency.
They are tasked with identifying new revenue streams, optimising resource allocation, and managing costs effectively. Additionally, CFOs must navigate the complexities of pricing and contracting in an increasingly competitive market, while also investing in technology and talent to remain competitive.
Agencies are facing threats on multiple fronts. Is the business model future-ready?
Agencies must continually innovate and adapt to stay ahead of emerging trends, technological advancements, and shifting consumer preferences.
One of the key aspects of future readiness is embracing digital transformation. With the digital revolution reshaping the way consumers interact with brands and consume content, agencies must leverage digital technologies to deliver seamless and immersive brand experiences across multiple channels.
This includes investing in data analytics, artificial intelligence, machine learning, and automation to gain deeper insights into consumer behaviour, personalise marketing efforts, and optimise campaign performance.
Diversifying revenue streams is another crucial aspect of future readiness. In addition to traditional advertising services, agencies should explore new avenues for revenue generation, such as e-commerce and quick commerce, content licensing, experiential marketing, and consultancy services.
By diversifying their revenue streams, agencies can mitigate the risks associated with fluctuations in the advertising market, and tap into new sources of growth and profitability. Fostering a culture of innovation is essential for future readiness.
Agencies must create an environment that encourages creativity, experimentation, and risk-taking, empowering employees to explore new ideas and approaches. This includes investing in talent development, training, and collaboration platforms to nurture a culture of continuous learning and improvement.
Agencies must prioritise agility and adaptability to respond effectively to changing market dynamics and emerging opportunities. This includes being proactive in identifying and capitalising on emerging trends, as well as being willing to pivot in response to market feedback. Future readiness also entails a focus on sustainability and social responsibility.
As consumers become increasingly conscious of environmental and social issues, agencies must align their business practices with sustainable and ethical principles. This includes reducing the carbon footprint, promoting diversity and inclusion, and supporting social causes through purpose-driven marketing campaigns. Future readiness requires agencies to be proactive, innovative, and adaptable in navigating the complexities of the modern advertising landscape.
Do you see any gender inequality or disparity in the finance function, across levels? Agency leadership has traditionally been male-dominated and advertising was seen as a boys’ club.
While strides have been made towards gender equality, there are still challenges to address, particularly in leadership roles. It is imperative for organisations to promote diversity and inclusion initiatives to create a more equitable workplace.
What are the trends you are currently witnessing in advertising, and what is the role of a CFO today?
CFOs are no longer just financial gatekeepers; they are strategic partners who play a pivotal role in driving the agency’s growth, profitability, and sustainability. One of the key steps in advancing the CFO’s role in advertising is providing opportunities for professional development. CFOs must stay abreast of industry trends, regulatory changes, and emerging technologies to effectively navigate the complexities of the advertising business. Agencies can support CFOs in this endeavour by offering training programmes, workshops, and access to industry conferences, and seminars.
At the DDB Mudra Group, we recognise the role a CFO plays, not only in managing the financial health of the agency, but also in driving the professional development of our teams. We believe that continuous learning and growth are essential for maintaining a competitive edge in the dynamic advertising landscape. Here are some key initiatives we have implemented to support the professional development of our teams:
• Cross-functional collaboration training: to foster a culture of collaboration across the agency, we provide training sessions that focus on cross-functional teamwork. These sessions aim to enhance communication and cooperation between the finance department and other functions, such as the creative, account management, and digital teams. By promoting a collaborative environment, we ensure that our finance leads are well-integrated into the overall strategic direction of the agency.
• Internal knowledge-sharing sessions: we regularly organise internal knowledge-sharing sessions where finance leaders share their experiences, best practices, and lessons learned with their peers. These sessions foster a culture of continuous improvement and provide a platform for discussing innovative approaches to financial management and strategic planning.
•Talent development programmes: we have established talent development programmes that are specifically tailored for our teams. These programmes include rotational assignments, stretch projects, and leadership development tracks to provide hands-on experience and prepare future finance leaders. By investing in the growth of our finance talent, we ensure a robust pipeline of skilled professionals ready to take on leadership roles.
Through these initiatives, we are committed to fostering a culture of continuous learning and professional development for our finance teams. By equipping them with the necessary skills and knowledge, we empower them to drive the agency’s success and navigate the complexities of the ever-evolving advertising landscape.
What are the biggest threats facing advertising agencies today?
Digital disruption is one of the biggest threats facing advertising agencies today. With the rise of digital technologies and online platforms, traditional advertising channels are facing increasing competition and fragmentation. Agencies must adapt by embracing digital transformation, leveraging data analytics, and developing innovative digital marketing strategies to reach and engage target audiences effectively.
The other threat is the growing trend of in-house marketing teams. Many large brands are building internal marketing capabilities to reduce costs, increase agility, and maintain greater control over their marketing efforts. This poses a direct challenge to traditional agencies, forcing them to differentiate themselves through specialised expertise, creative excellence, and strategic partnerships.
Agencies are facing increased pressure to demonstrate ROI (return on investment) and prove the effectiveness of their campaigns. With clients demanding greater transparency and accountability, agencies must invest in measurement and analytics capabilities to track and optimise campaign performance. Failure to deliver measurable results can lead to client churn and reputational damage. Additionally, talent retention and recruitment have emerged as major challenges for agencies. With the rise of remote work and the gig economy, agencies are competing for top talent with tech companies, startups, and freelance platforms. Agencies must invest in talent development, offer competitive compensation packages, and create a positive work culture to attract and retain the best and brightest talent.
Moreover, agencies are grappling with regulatory challenges and privacy concerns, particularly in the era of data-driven marketing. Stricter regulations around data privacy and consumer protection require agencies to adopt compliance measures and adhere to industry best practices to avoid legal and reputational risk. By proactively addressing these threats and embracing innovation, agencies can navigate the complexities of the modern advertising landscape and position themselves for long-term success and growth.
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