TBWA announced the acquisition of India's Magnon Group to bolster its digital capabilities in January 2013.
The acquisition included domestic digital agency Magnon Solutions and digital outsourcing agency Magnon International. While Magnon Solutions joined TBWA’s global Digital Arts Network (DAN), Magnon International became part of E-Graphics.
As Magnon turned 13, Keith Smith president – International, TBWA Worldwide, joined the celebrations in Delhi.
In separate chats with Campaign India, Smith and Vineet Bajpai, CEO, Magnon\TBWA, offer a lowdown on Magnon’s journey and future plans.
Q&A with Keith Smith
How has Magnon/TBWA integrated as part of the TBWA offering in India?
What we are trying to do is integrate the three elements of our businesses here, because it is important to us that we are integrated. And that is, TBWA, the agency; obviously the Magnon brand; and Integer, the shopper marketing operation.
The most important thing right now is that they are all working seamlessly together as well as being able to operate independently - they have to operate together. It takes time since they are big operations now and getting it to work properly will take some time. This year, we are concentrating on that.
Is Magnon adding numbers, in terms of revenue and clients, as a halo effect of TBWA’s name attached to it post-acquisition?
I think it will, over time. I don’t think it has at the moment because Magnon has such a strong brand identity in India. I think it will do so with international clients as they come into India as has been the case with Nissan and Datsun. It takes time.
What we have been very successful in doing is taking the Magnon brand and spreading it around the world, which we are doing as part of DAN or E-Graphics. I would hope that in another one or two years, it will get a lot of halo effect from TBWA.
Are you happy with the revenues being generated in India currently?
Yes. They are all generating really good revenues right now. Integer has had pretty good business. TBWA is doing well; we have got some big global clients in TBWA as well. And Magnon continues to perform unbelievably well – domestically and for all the international businesses.
What is Magnon’s share, or share of digital, in the Indian revenue pie?
I am not sure about the absolute share but it should be around 40 per cent. With nearly 300 people, you would expect that. When I say that, it also reflects some TBWA clients that have some of their business in digital. So it is not a pure Magnon number. I would actually say that 40 per cent of our business is digital now.
Revenue-wise, what are your expectations from India?
It’s in line with the market. In India, it is about very good above-the-line advertising as well as being good in digital. So what we are trying to do is to have greater capacity to do more innovative things in digital: developing more mobile, developing new and more digital applications. It is that kind of thing we are worried about rather than pure percentages.
Are you looking at anymore acquisitions here?
Not right now. We have to get to the end of 2013 to make sure that the three elements are working properly.
How would you rate Indian digital advertising innovations?
Some of them are very backward; and some of them are very innovative.
Korea and Japan are really up there in terms of the way they use digital and mobile apps as are Western countries and Europe. I think India is somewhere in the middle.
The issue that you have is that you have a huge legacy of being a TV market. And it is not actually going away. TV is still incredibly important from a brand-building standpoint. My idea would be a media schedule that said TV, outdoor and digital. For me that would be a perfect story. When you also need to build strong brand awareness, ATL does that job better. It’s funny that you need combinations to make brands successful.
Digital advertising is often a spin-off of a television commercial. Do you see that changing?
That has to change. If digital thinking is not at the heart of what you do, then it is just going to be a by product that you get at the end of it - and that is wrong. As you develop the idea, you have to think of all the component parts. We as an advertising industry need to be really good at digital. For a long time, digital specialists, including Magnon, have been stealing all our business. We had to figure out a better way to work together more effectively and it was obvious to us – that we let it be the heart of what we did or do.
This is an incredibly creative market. Any market that has such a strong film industry as India and a lot of talent in different forms of communication, should be capable of being an absolute market leader in terms of digital. We are looking to hire a good proportion of those people in Magnon.
What will be the growth areas for Magnon/TBWA?
Growing existing business - which is happening very well at present. Brands like Nissan are doing very well in India. We have to get new share of business and that is important, as much as adding skill sets as we go forward. Activation, for example, is one area that we are good at in some markets such as China, and here we are looking at that.
The important thing in 2013 is to bring all these component parts together and make sure they are all working well together. We have high expectations in terms of growth as we had when we did the deal. None of the component parts have let us down and are looking good for 2013. But the important thing is that it becomes the well-oiled machine focussing on important aspects of brand building as we go along.