In the world of advertising, freedom is usually associated with the stereotype of wearing shorts to work, a schedule devoid of a regular 9-5 job, beer bottles on work desks and late nights of fun and frolic.
However, the industry encompasses more than what meets the eye. Like other businesses, agencies too, have fought various battles since their existence. One of which is the seldom talked struggle of staying independent.
For long, several agencies have envisaged the thought of giving up their control, to join greener pastures. While some gave in to the temptation for reasons of their own, others have honoured their freedom as sacrosanct and stayed independent to this date, while churning out good or even sublime pieces of work for their clients.
Campaign India speaks with the heads of such agencies that have stood the test of time, by refusing to sell out, while acing their freedom game all too well!
Been tempted ever?
India is a steady growing market, proof of which is in the emergence of several small and mid-sized agencies in the past few years. That being said, it comes as no surprise that renowned networks would have approached well-performing independent agencies with acquisition proposals. If the asking price of a deal is phenomenal, why then would an agency decline such an offer?
Sam Balsara, chairperson, Madison World, founded the media agency in 1988 and swears that independents are better suited to meet the needs of clients. Speaking about why he hasn’t considered selling out, he said, “Independent agencies are more nimble, can take faster decisions, and are not driven by quarterly profit targets. India is one of the fastest growing economies in the world, with the fastest growing adex. All international eyes are on India and it is an advantage to be homegrown.”
On the other hand, when Sudhir Nair founded 21N78E, he gave enough thought to who would want to acquire his company’s model. Having three offers come his way, he shared why all of them were rebuffed. “One offer was from an investment standpoint against a stake in the agency and two were for outright acquisitions. We were keen on one, but didn’t agree to the percentage of stake that was being demanded. In another case, we thought we were overvalued and wouldn’t be able to deliver on the expectations during the earn-out period. And the last one significantly undervalued us.”
Founder and CEO of Wondrlab, Saurabh Varma, was at the helm of Publicis Communications as CEO, before launching his company in November 2020. Spilling some tea on why network agencies succeeded in the first place, he said, “If networks won a brand in one market, they would win the same brand across many markets. If you have a big dream, you need access to capital, and that’s what networks always had.”
However, analysing the current scenario, he said, “15 years ago, 95% of the business would be a network business. Now it’s the opposite, since 90% of the businesses, even for global brands, are locally owned.”
He shared how people don’t need to build incredible things just to sell them. According to him, people only sold out because they had no exit. “Today, unicorns are being born every day and so you have access to capital, valuations and your exit strategy could be an IPO. It doesn’t have to be about selling to another network. That’s the huge shift which is happening right now,” he added.
Although independent agencies bring out great work, they sometimes struggle to compete with networks. “We have been in a few conversations where we were told that our pitch was the best, but they went with a ‘network’ agency for reasons best known to them,” said Nair.
However, this is not necessarily the bible of every client’s approach. Amul, the brand known for its witty moment marketing and quirky OOH campaigns, is no brainchild of a network agency. In its current avatar as DaCunha Communications, the agency has been in bed with the brand since 1969. Its director, Rahul DaCunha, made clear that he had no intention of selling the agency. “Even in the 90s, when mergers and acquisitions were in vogue, with foreign agencies buying Indian ad firms, my father, founder of our agency, wasn’t keen - and I feel the same way even today. We feel freer and more creative, staying independent,” he added.
On the other hand, Jaideep Shergill, founder, Pitchfork Partners Strategic Consulting,, seems to have done the drill before, when Hanmer & Partners, the agency he founded, had been acquired once by Publicis, under the brand MSL.
“When we started Pitchfork, about seven and a half years ago, the objective was to not do the same thing, but keep ourselves independent. Once you reach a size of 300-400 people, it becomes difficult to sustain on your own. However, we are still just 50 people and if we wanted to sell, we would have by now. The world has changed its expectations and so has our approach to business. Hence, it’s difficult to get into a traditional acquisition,” said Shergill.
Independent vs hitched
Experts listed the things they love and things they aren’t fans of, when working independently. While most of them shared that not being answerable to a board was the biggest perk, some highlighted other advantages of slaying solo.
“In Indian agencies, the top management’s time is spent addressing clients’ challenges and building brands. For me, solving client challenges, growing brands and exploiting opportunities gives me a high and keeps me active and young. Whereas, in global agencies, decisions are taken keeping in mind the globe’s requirements, which may or may not be tailor-made for India,” said Balsara. \
However, the most common con listed was the fact that they couldn’t work with globally aligned clients.
Nair, on the other hand, believed that staying independent lets his agency stay nimble, pivot quite easily and be future-facing.
Varma, too, highlighted how in Wondrlab, teams can take a call on something and move on without waiting for the last person’s approval.
For Shergill, the blessing that networks bestow on acquired agencies is the career tangent
for the latter’s employees. “It doesn’t change the life of the clients dramatically, since they continue to work with the same team they were always working with. However, employees can go from few to many opportunities, and grow laterally.”
However, he pointed at his feedback being all pre-covid, since he hasn’t had the access to the know-how’s in the bigger groups.
The chosen one
We asked our veterans who they would pick as their holding partner, should they have to choose in a very hypothetical situation.
Staying quite committed to his agenda, Balsara shared that he would choose someone who valued what Madison World brought to the table. “It would have to be someone who treats us as an equal partner and who will work with the same values of client-first, client delight and integrity that we work with.”
Although Nair echoed the same beliefs as Balsara, he was determined that the disruptors worthy of such a collaboration are the tech giants, consulting firms and MarTech companies.
Getting apprehensions closer, DaCunha name-dropped Chiat Day (in the 80s) and BBH as his preferences. “I’d like to collaborate with a creative boutique or hotshop agency with a strong creative philosophy. These are outfits that have fought hard to retain creative control, and I’d like to understand how they function,” he added.
Varma, on the other hand, crosses his heart and vows to never sell to a network, even in a hypothetical situation. He explained the other options that agencies can explore, instead of selling their soul to a network. “Listing an IPO is far more valuable than thinking about a network exit. If capital is an issue, one could continue to hold it private, since there is enough money available in the market. When you have enough access to capital, why would you want to sell? Agencies could look at joint ventures, partnership models and consulting or tech companies. Possibilities for entrepreneurs today are way better than what they were in the past.”
Shergill, too, is open to interesting opportunities, provided they function differently. “Our association might not be with a regular holding company like WPP, Publicis or Omnicom. It could be a consulting firm.The PR acquisitions that have been happening too, have seen smaller agencies acquiring other smaller companies.”
When asked to name a company of his preference, he joked about not dangling the carrot in front of anyone. “I don’t want pressure on us and reverse pressure on anyone,” Shergill added.
To surmise, staying single might not always be appealing, but it sure gives one the freedom to unaccountably mingle for their own good. Not every union is meant to last, since some are destined to stand their ground and rule their own empire, without passing on their crowns.
(This article first appeared in a special print issue published by Campaign India for Independence Day.)