As a part of its strategy to strengthen presence in the Indian market, Publicis Groupe has announced the acquisition of iStrat and MarketGate. iStrat is an integrated digital agency, while MarketGate is a strategic business and marketing consulting firm.
These acquisitions mark another step towards the network’s goal of doubling its size in India between 2010 and 2015.
As a part of this acquisition Publicis Groupe will also acquire MarketGate Dimensions, a MarketGate subsidiary providing research-based solutions, with offices in Mumbai, Delhi and Bangalore. Its client list includes Glenmark (personal care), Kellogg’s, Maruti Suzuki, The Walt Disney Company and Viacom 18.
iStrat will be rebranded Publicis iStrat and will operate as a unit within Publicis Modem, Publicis Worldwide's global digital network. Its founders, Navneet Singh Sahni and Sonya Sahni, will continue to lead the agency.
MarketGate will retain its name and will operate within Publicis Worldwide. It will also continue to be led by founders Shripad Nadkarni (chief executive officer) and Sharda Agarwal (executive director). Both iStrat and MarketGate leadership will now report into Nakul Chopra, chief executive officer, South Asia, Publicis Worldwide.
India is currently the world's 16th largest advertising market, and although the country's economic growth has slowed somewhat in 2012, it remains over five per cent. Zenith Optimedia forecasts (December 2012) advertising expenditure to increase by 7.7 per cent in India in 2013.
As far as India’s standing in the Publicis Network is concerned, it is the 13th largest market in terms of revenue.
Excerpts from an interview with Jean-Yves Naouri:
It’s been a year of acquisitions for Publicis Groupe in India. You’ve acquired three digital agencies (Resultrix, Indigo Consulting, iStrat) and a marketing consulting firm, MarketGate. What is the thought process behind this aggressive approach in a year where we’ve witnessed a slowdown?
For us, India is a priority market. While you may argue that there’s a slowdown in the country, truth is that the future looks very promising. Many countries dream about the growth India has shown this year. So it’s not a bad year by any stretch of imagination. As for your question on the investments we made this year, it’s a part of the network’s strategy in India. There is a lot of potential in this market. And for us this is the time to further strengthen our operations in India.
What is the thought process behind acquiring three digital agencies (as against one)?
Digital is an intrinsic part of our strategy in India. You cannot expect one digital agency to service all our clients. And that’s not our approach. Our approach is to really think digital as a group. We want to be digital in each and every operation, be it marketing, advertising, PR, healthcare etc. So it’s not a question of cost. The idea is to service our clients in the best possible manner. We think three specialised digital agencies could bring specific things to the table and really add value to the clients’ business at the end of the day. That’s what we’re looking at. Our approach may be different, but is in line with what we’re set out to achieve in this market.
So you’ve seen Indigo joining Leo Burnett, iStrat joining Publicis India and Resultrix joining Zenith Optimedia. We will now grow our business organically by hiring talent and contributing to their growth.
Also, these decisions have been taken after a lot of analysis, taking real market situations into account, the kind of clients we have and their objectives, the target we’ve set for ourselves and so on.
How is India’s performance vis-à-vis other BRIC markets?
India is our key focus market as we speak. We will continue to accelerate in the market. As for other countries, we’ve already doubled our size of operations in Brazil and we’re on the verge of doing the same in China.
What is the percentage contribution from India to the network?
India is currently Publicis Groupe’s 13th largest market in terms of revenue. So India’s contribution is significant. We have more than 2500 employees in India and about 50,000 globally. So that gives you an idea of our presence in India.
How do you see Publicis Groupe’s standing in India vis-à-vis other competing networks?
We do not look at competing networks and what their plans are. What we look at, is their clients. That’s what matters to us the most. That’s what keeps us going. The most important thing for us is how to take our clients’ business to the next level. MarketGate, for example, brings expertise in consulting to CMOs. Recently we announced a partnership with IBM in the e-commerce space which has seen a rapid growth in China and India and we have a very strong commitment in this domain. We’re also looking at healthcare as a serious domain in India.
Healthcare is still a nascent domain in India. How are you looking at making it big?
You’ve seen what’ve done with our healthcare advertising agency Watermelon in India. We’re launching Razorfish in India and with that we’re looking at some serious action in the domain.
At what levels do you ensure synergies between various agencies of the network in India?
We’re very lucky with the quality of management we have in India, and we’re pleased to see a very strong collaboration. We’re not a holding company. Not that I don’t like holding companies, I like to call ourselves a parent company. And we try to bring together all our operations and make them work together. I am very pleased to see the progress we’re making on that front. Every company in the network knows that they will get the support of the group, and that they will get the support of the worldwide brand management team. And that’s very encouraging to see (companies willing to work together), because at the end of the day, we really want to be one strong network with different brands bringing specific skill sets and capabilities.
Can we expect more acquisitions from the group in the near future?
We will continue to acquire the right kind of talent to the group and that’s something we will look to do on an on-going basis. If your question is whether we will acquire a few more agencies, my take is that we will look at every possibility of expanding and strengthening our presence in India. However, there is nothing specific that we can talk about right now.
Is digital driving the maximum revenue as far as the India growth story is concerned?
Even if we continue to strengthen our digital capabilities, going forward, there will be no rationale to talk about digital revenue versus analog. I say this because digital is going to be everywhere. One day you will wake up and people will ask, ‘Why are you still talking about digital?’, because everything around you will be digitised. Are you still talking about quality management? No, we aren’t. When we launched total quality management at the end of 90s, it was a specific challenge for a number of people, but no one is talking about quality management today. Today, you have to be quality. In the same way you will have to be ‘digital’ tomorrow. So we’re very serious about our digital business. As a network, we’re focused on growing our digital operations.
How has been the overall progress of Public Groupe in India this year?
We’re very satisfied with the year so far. We are still waiting to see what’s going to happen in December, which is a very important month in an industry like ours. I would not like to make any specific comment. But, so far it’s been very positive.