Category: ADVERTISING

By Ravi Balakrishnan

Is Vivek Suchanti, chairman and MD, Concept Group building India’s first independent network? He began backing entrepreneurial ventures set up by creative people in 2010. Ever since he’s attracted some top drawer talent. Today, he holds a stake in four creative shops: Scarecrow, Eleven Brandworks, ITSA and Enormous; digital agency Dark Matter and design and branding consultancy Brand-nomics. Add the PR and media clout of Mr Suchanti’s longstanding Concept group, and the contours of a network begin to emerge. One of his agency partners even affectionately refers to him as “garibon ka Martin Sorrell” (the Martin Sorrell of the poor). So is he up for the Quixotic task of taking on the chief of the WPP network, Sir Martin himself, and of course, Publicis Omnicom Group’s Maurice Levy and John Wren and IPG’s Michael Roth? Perhaps even fighting them at their own game? A tempting hypothesis, except Mr Suchanti sees things very differently: “A network is a consolidated balance sheet. I’m not looking at listing and don’t have aspirations to be a holding company. Maybe I will think of it five years down the line.”

For Mr Suchanti, partnering with creative talent was less grand plan and more necessity. Concept began in 1988 and quickly zeroed in on the lucrative IPO advertising market. After almost a decade of highly remunerative assignments, the first stock market crash gave the group pause. According to Mr Suchanti, the PR practice began to be strengthened as a bulwark against overreliance on an unpredictable and volatile business. Today, 80 to 90% of Concept’s clients are in the BFSI, real estate, retail and education space.

Creatives, however, were not exactly queuing up to join a financial ad and PR-oriented firm. Realising that traditional advertising was (at least compared to the IPO sector) recession proof, Mr Suchanti decided the best way to get talent would be to partner them in their own entrepreneurial ventures. The agency’s IPO business had left it with enough liquidity to fund these without having to raise money from external sources.

And the creative folk are queuing up now, for several reasons. With some, it’s the realisation of a longstanding dream. For others, an attempt to land on their feet after being unceremoniously shoved out of a cushy job. Besides, Mr Suchanti offers a sweet deal by all accounts. Financial backing, none of the stringent quarterly goals demanded by multinationals and minimal interference. The partnership also takes care of many teething problems that fledgling businesses have: an administrative backend, with a centralised accounting and legal department, leaving an agency head with only the advertising product to worry about. All in exchange for a stake that Mr Suchanti will only describe as “significant”, but which is widely reckoned to be a majority. For his part, Mr Suchanti looks for agencies with proper business plans including target numbers. And for a differentiator: every agency he’s invested in believes it has one on offer.

As it turns out, Mr Suchanti’s entry into this space has been perfectly timed. Marketers are comfortable looking beyond networks and global alliances for partners, at least on projects. Scarecrow and ITSA have used these to get a foot in the door, which in some cases translates into regular business. Again, coincidence, not strategy says Mr Suchanti. Most of these agencies were built for, and clearly prefer, a retainer model.

And that’s the advantage of independence. The freedom to tweak business models on the fly and focus on aspects that interest the agency heads. There’s enough business going around, provided these shops look beyond the usual suspects to areas like real estate or the odd restaurant or two.

Mr Suchanti is uncomfortable calling this agglomeration of talent a network, at least for the moment. There won’t be any networkesque behaviour like a holding company pitch. “Everyone should pull their own weight,” says Mr Suchanti, “At present, we don’t aggressively cross-sell.” Even the agencies believe good fences make good neighbours. In spite of having previously worked with Manish Bhatt, Emanuel Upputturu, one of ITSA’s founders claims to have never interacted with Scarecrow. Mr Bhatt takes it to the next level claiming searches on the internet have delinked Scarecrow from Concept so people are not confused by agency ownership.

Of course, it has not stopped industry folk from speculating on what it’s all leading up to. The head of a formerly independent agency observes, “It’s a valuation game. Theoretically speaking, he could park conflicting businesses with these agencies and sell two or more. He’s taken a risk and if it pulls off he deserves to benefit from it.”

Most agencies claim it is too early to think of the future, especially in terms of divesting stake. As Kenneth Augustine, managing partner of Dark Matter puts it, “We are obviously doing this to make some money, but our target is not to sell. The focus and effort is going into creating a product that’s sellable.” Mr Bhatt of Scarecrow says, “There are two types of houses: the one that you buy for an investment and the one you live in. Scarecrow is the latter. We want to make it big enough so even if we partly divest it’s lucrative.” Mr Suchanti has a completely open mind as far as global partnerships are concerned. He says, “The primary objective is what’s good for the independent setup. We are not driven by a financial need since we are all young. I don’t think any of my partners is over 45 to 50.”

He’s beset by calls as an increasing number of creative people inspired by the sale of Taproot and the frustration of working in an agency system through tough times, look for a way out. Asked if he feels offended or flattered by the “garibon ka Martin Sorrell” sobriquet, Suchanti replies, “I don’t think any of my talent is garib. Martin Sorrell is a big man and our model is not like his. It’s also highly unlikely that Martin Sorrell will sell one of his agency brands. I think it’s a description that doesn’t really apply.”

Source:The Economic Times
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