GrowthX Acquisition Assignment - Rahul Desai

This documentation covers the following aspects of GrowthOS, an advertising platform used by marketers and agencies to increase their advertising reach:

• What is GrowthOS?
• What problem does it address
• Who uses it?
• Why do they use it?
• How have these users discovered GrowthOS?
• Do they churn?
• How many of these potential users exist? What is the market for GrowthOS?
• How we could increase user adoption of this platform

What is GrowthOS? What problem does it address?

GrowthOS is a platform consisting of several products that work together in a coherent manner to solve for the following paint points:

• Creating, budgeting for, executing and tracking an advertising campaign from start to finish involves people from different departments who all need to communicate with each other on every step of the campaign.
• Currently there exist many different applications which are used to fulfill the entire journey and handing over information to relevant parties involved in each stage from the previous stage is very difficult.
• Collaboration between different kinds of employees doing different kinds of jobs such as marketing, design, etc is often a job by itself, taking up a major part of a media planner

Therefore, the value proposition of GrowthOS was created keeping in mind a solution to the above pain points. If it was to be stated in a single sentence, the value proposition would be, 'A data driven advertising management platform, powered by machine learning, that combines a group of products in a manner that eases collaboration between people, promotes employee efficiency and produces advertising plans that ensure you get the maximum reach for your brand'.

In short, this product aims to fill the whitespace in

• Employee collaboration between different departments like marketing, product, design and finance
• Time dedicated by media planners towards audience and channel research, copy and advertising plan creation
• Lower accuracy of manually created advertising plans

Who uses GrowthOS? And why?

The typical ICPs for GrowthOS are

• Media Planners / Junior Marketing Executives - these usually belong to different Publicis agencies and are internal Publicis employees. They are part of a team of about 50 people dedicated to each account. They work on the day to day advertising for clients, using GrowthOS as a tool. They are a good source of feedback for the GrowthOS team.

• Senior Marketing Managers - these are usually from the clients of Publicis and they communicate with the above media planners team.

Here are 2 sample ICP profiles for GrowthOS:

How did these users discover the product? Do they churn?

• Publicis is known as one of the big 4 of advertising, the other 3 being WPP, Omnicom and Interpublic Group.
• Therefore, the various agencies of Publicis already have a large selection of clients.
• These clients are large multinational companies who invite agencies like the big 4 to pitch to them and win their account
• As part of the pitch, GrowthOS is introduced as a cohesive platform that provides a solution to the fragmented tools, overall collaboration and plan accuracy problems faced by the marketing departments of various corporations
• Therefore, offline sales remains the strongest and so far, only channel for GrowthOS as currently the platform does not even have a web presence except a mention on the Publicis website
• The platform was released to Publicis clients in 2021. In general, accounts don't churn because they are happy with the quality of the outcome in terms of efficiency, ease of information access and accuracy. This is mostly because of Publicis’ experience with advertising in general.

The Market for GrowthOS

A quick search on Google for 'advertising planning tools' throws up a variety of results, none of which feature GrowthOS (because the main channel for it is offline sales and pitches). However, it does demonstrate the earlier mentioned problem of tool fragmentation as websites frequently talk about the best TOOLS and not the best TOOL as seen in this screenshot:

The volume of searches for 'advertising planning tools' is about 90 searches per month:

Even a search for 'Publicis advertising planning tools' throws up a result that is 10 years old and the 2nd result is publicis' own website:

This clearly shows that Publicis do not feel the need to explore SEO as a channel because of their sheer size and already earned reputation as an advertising and media juggernaut. However, they could be missing out on other potential clients due to this lower online presence.

As per statista.com, the total Q1, Q2 and Q3 revenue for Publicis was 9.56 billion USD. Of this, GrowthOS generated 168 million dollars in revenue for Publicis.

Publicis' competitors had the following revenue figures:

• WPP earned 17.38 billion in 2022
• Omnicom earned 14.29 billion in 2022
• The Interpublic Group earned 10.93 billsion in 2022

Interestingly enough, the search term 'advertising planning tool' throws up no result on Google for these 3 companies either.

As per campaign.com, Publicis became the most valueable agency stock to hold in 2023 with a 41% share price leap:

The TAM, SAM and SOM for GrowthOS

Disclaimer: I have access to audience generation tools like GWI, TGI and Lotame and have used them in this research

Usually, companies bring in a marketing team when the company is making revenue and needs to scale. This is the stage at which the ideal users like marketing managers can be found.

As per GWI data, the total number of people who work in companies over 5,000 employees, are marketing managers, have seniority and decision making power are 1,01,000 world-wide. Assuming that not every one of these works at different companies we can say that the total number of companies who Publicis could pitch to would be the 1,01,000 / average number of marketing managers per company of size over 5,000. As per clearbit, B2B marketing teams make up 5% of total employee headcount. Let us assume this also applies to B2C companies. For a company with 5,000 employees, this would be 250 marketing people. Assuming a team size of 5 with 4 reportees to each senior marketing manager, we would have 50 marketing managers.

Therefore, 1,01,000/50 = 2,020 companies that Publicis could pitch to.

GrowthOS currently has a total of 439 customers. Therefore, the Average Contract Value is

168 million / 439 = 382,688 USD (approximately).

With 2020 companies the TAM is 2020 * 382,688 = 773,029,612 USD

However, not all of these 2,020 companies would need a major agency like Publicis to handle their advertising. They might have inhouse marketing tools or be clients of another of the big 4.

For now, Publicis is focusing on companies in Europe and North America. Going back to our previous GWI data and applying region restrictions, this brings the total number of senior marketing managers down to 24,100. Therefore, 24,100/ 50 = 482 companies.

With 482 companies the SAM is 482 * 382,688 = 184,455,616 USD

Therefore, with 168,000,000 in revenue, GrowthOS currently has approximately 91% of the TAM.

Therefore, the SOM is 0.91 * 184,455,616 = 167,854,610 USD

How we could increase user adoption of this platform? Channel experiments

Looking at the TAM, SAM and SOM for GrowthOS, we can say that user acquisition in terms of pure market capture is very strong.

Also, GrowthOS uses offline sales as an acquisition channel quite effectively and has doubled down on it as a channel as it seems to work for their current TAM.

Therefore, one can say that, despite the product only being launched in 2021 to clients, it is a very mature product with great PMF and channel effectiveness.

Using offline sales as the main acquisition channel, I propose 2 experiments:

1. Create different sets of demo videos for clients during pitches that cover the following:
2. • What pain point is being addressed and to whom?
   • What part of the journey are the clients on (first thought, passively looking, actively looking, deciding, etc)?
3. Create sample demo accounts for customer which they can use to explore the product

Experiment 1 - Demo Videos

1. When a company and their marketing team are in the process of choosing an agency, they are usually in the passive looking stage
2. When they invite agencies to pitch, they are in the active looking stage
3. Post pitch, they are in the deciding phase

In each phase, a company is at different stages of their struggle. There is scope for these demo videos to insert themselves into each stage of the process to help customers decide where to go.

It is important to note that while the overarching pain point is collaboration, different companies may need different types of collaboration. Some may need collaboration between marketing and design, some between marketing and product, etc. Therefore, each video should cover the collaboration between different departments and how it enables efficiency and raises accuracy of plans.

These videos should be prepared after interviewing customers, identifying their top pain points and then making these videos as part of the journey. Currently the Publicis sales team simply shows a fixed set of slides to the clients they are pitching to. If they had access to videos that could show the customer as per the customer's point in the journey, their sucess rates, high as it already is, would be even higher.

Experiment 2 - Demo account

While videos are a good way to get customers interested in the product, it's not enough. This is where a simple set up could have an even better impact on the rate of contracts closed.

A demo account that is set up for the customer, with limited sets of data to access would show the customer how collaboration can be carried out.

A trial time period of 1 month would be enough for the customer to decide if this is the product from them. If they sign up, that's money for Publicis. If they don't, the Publicis team can always get feedback which can make GrowthOS stronger.

Additional Experiment - New Channel

However, there is a whitespace in the list of channels one could propose. As seen earlier, none of the top 4 agencies figure in the search results and what results do appear promote fragmented tools rather than an end to end platform.

Therefore, 1 experiment is proposed which would have a the following impact:

• Bring down offline sales channel costs
• Increase the online presense of GrowthOS
• Reduce the time taken to close a pitch
• Create a new channel for GrowthOS to acquire customers on

Publicis could create a set of highly SEO friendly pages that talk about the advantages of GrowthOS and the paint points it addresses. This would give potential clients an idea of what they are currently missing as most if not all clients would do their homework before the pitch and discover the advantages of GrowthOS for themselves.

• This makes the job of the sales team more effective because clients are aware of GrowthOS
• GrowthOS now has a strong online presence
• When marketing managers look for solutions to help with planning, GrowthOS would show up as a result.
• With time this channel could become strong enough to offset the costs incurred by offline sales

In conclusion, given the high TAM, SAM and SOM values for GrowthOS, one can conclude that this product is highly valued by it's customers and puts Publicis in a good position vs it's competitors.