Tag: Publicis Omnicom

 

By Delshad Irani, Shephali Bhatt & Amit Bapna

 

We like to watch grown men in underpants tumble around, grab and take down each other in the “squared circle” as much as the next guy. But let’s not make this about Sirjee any more than the situation calls for, as tempting as that may be.

 

Although it started over six months ago as “a joke” at cocktail hour between two advertising holding company bosses, we all know how it went down last week in the French capital.

 

Even before the American and the Frenchman put pen to paper, the onslaught of expert opinion as well as the general, less intelligible variety had been unleashed online.

 

Some called the merger a bold and brave move while others say it could possibly be a destabilising force in an already unstable industry. What concerns us, however, is a far more pressing issue.

 

The implications of this union for the Indian advertising industry. Of course, there are other areas of concern – people, creative calibre and clients. To begin with, here’s a quick look at where they stood before POG, ie Publicis Omnicom Group.

 

Publicis Groupe owns Leo Burnett, Publicis Capital, Publicis Ambience, BBH and Saatchi & Saatchi and in media Vivaki which includes SMG, ZenithOptimedia and Digitas. Meanwhile, Omnicom, a late entrant in this market, has done a fair job of catching up mainly due to its acquisition of Mudra Group to create DDB Mudra.

 

The other agencies are BBDO and TBWA, and in media, Omnicom has OMD and DDB Mudra Max. The new allies may have taken the beaches of Normandy and have beaten Sir Martin Sorrell’s WPP to become the largest global advertising company.

 

But this Franc and Yank combo still does not have enough firepower to propel past WPP in India, and in China, where Omnicom, a largely US-centric company, missed the early bus again.

 

Publicis, on the other hand, has firmly rooted itself in the Chinese market, mostly via acquisitions in keeping with its aggressive strategy of developing digital expertise and skills across markets.

 

When Lions Dance

While the full effect of the merger will not be felt for a while – at least a year say industry pundits -there is no dodging the fact that it will have consequences for Indian operations. After all, India isn’t a strange and exotic outpost but a growing market with a fast expanding population of increasingly digitally savvy consumers.

 

That kind of thing is hard to ignore, non? We spoke with clients and industry bosses across agencies, and holding companies, and here are the likely implications for India in a post POG world. (Also unlike the wholly French press meet where the announcement was first made, we are more accommodating.)

 

Mon Ami or Bette Noir?

The adwallahs believe the corner office is where all the POG action will take place. Although agency networks run independently of holding companies, they do not operate in isolation.

 

WPP has veteran adman Ranjan Kapur in charge of watching over the mother ship’s assets as well as liabilities. He has even been known to step in as interim chief, as he did a while ago with the headless Bates.

 

The question is who will be POG’s point-man or woman? Will it be a chosen one, two or three? Will the role largely be ceremonial – as is said to be the case with Kapur and his Omnicom contemporary Keki Dadiseth – or something far more substantial? It may well be the latter in a market where growth is still an imperative for POG.

 

Some of the constituent agencies are not in the best of shape and there may even be some consolidation on the cards, say industry insiders. Besides there are still a few good men, women and agencies yet to be acquired, and a fair share of cash and glory to the person who takes the lead in swinging these deals.

 

The gentlemen themselves are silent but industry wags everywhere are indulging in coffee (by day) and beer (by night) fuelled speculations on whether there is going to be a top dog at POG. And if there is, who is it going to be among DDB’s Madhukar Kamath, Publicis’s Nakul Chopra and Leo Burnett’s Arvind Sharma? People have their favourites among the trio and are spending a lot of time being dismissive of everyone else’s choices.

 

As an adman puts it sardonically, “Why would an Arvind Sharma listen to pearls of wisdom from Nakul Chopra?” And “Never mind Nakul Chopra having a problem with Arvind Sharma becoming the POG country head, why would Madhukar Kamath allow such a thing?” Both Publicis and Omnicom have been run in a far more decentralized manner compared to WPP, says an advertising agency chief.

 

But if we were the betting kind, we’d put our hard-earned cash on an old, experienced, hand – maybe even an external hire – to see this through. This game of thrones may begin tomorrow, next week, in 6 months or 12. However, another option presents itself: “if they behave like brothers and hunt like groups then they can pull out of the current morass and remove the tag of mid-sized agencies against them,” says one of our creative entrepreneurs. He however adds with the sardonic wisdom of a longtime witness to the industry’s numerous ego clashes, “This merger is more an efficiency thing than a merger of heart and soul. It is more a celebration of the account book than of creativity.”

 

C’est Business As Usual or As Unusual?

Yes, it will be business as usual, for now at the very least. On the media front, this merger will give POG agencies additional leverage. A new giant and worthy challenger to GroupM just might be good news for media houses. And paradoxically for GroupM too which a few ad men believe has been a little too complacent for its good of late.

 

It may not be good news for India’s largest independent though – Madison Media. The jury is out on whether and how this will affect Madison and its future in a rapidly consolidating industry. Says a senior executive “Balsara does not care for networks and is a respected man. The Godrej family trusts him with their brands, so does the Cadbury team.”

 

Besides, according to a leading WPP-owned agency’s top executive, media buying won’t get affected as much as speculators’ indicate, because media agency commission forms only 2.5% of a marketer’s budget.

 

Yet another change, is that globally aligned clients will have a smorgasbord of agencies to pick from. Apple, for instance, is handled by TBWA globally but if TBWA India is too small to handle Apple, now they could go to say a Leo Burnett as well.

 

The options within a group have increased. Keep your gloves on, practice parrying and watch out for that left hook. But perhaps the most significant change will be in the places you least expect, for instance, agency parking lots.

 

The industry veterans we spoke with believe sooner than later rationalisation will happen. Or, as one agency chief puts it, referring to the garage of a Mumbai-based Publicis Groupe shop that’s been quite the object of envy, “Audis without the ‘audi’ence may be too tough an act to pull off for any longer.”

 

Monsieur Client, Ca Va?

Here’s a little story for all those eager to gauge client sentiment in the country. A client and an agency chief walk in to a bar. POG is all over the news.

 

Client turns to agency chief and asks, “So what do you think it means?” Hardly surprised by the recent events in the global ad industry as M&As have become the norm across many sectors Indian clients don’t expect the merger to make a significant dent in client-agency relationships.

 

The belief is that normally when clients pick agencies, they don’t choose basis groups ie “I want to go with WPP or Omnicom”. Clients pick the best in the domain, be it advertising, media or digital.

 

When some of them happen to be part of the same network/group, it’s a plus. Clients respect frontline work irrespective of whether it comes from a large holding company or an independent.

 

Frankly, dear reader, they don’t give a damn as long as they get their money’s worth. However, if client-agency divorces do happen, at a global level, it would spell good news for independent agencies.

 

As more and more clients and marketers are valuing the small agency approach to advertising more than the big agency approach, what do you think happens when the big agency becomes bigger? At the end of the day, though, the parties most likely to benefit from this merger are French tutors.

 

One might need to brush up language skills for Cannes is likely to be an even more French affair. On an even lighter note, POG agencies may have something to cheer about, if the French do indeed have their way and the 35-hour work week practice becomes a new network standard.

 

Source:The Economic Times

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