Tag: RECMA

By A Correspondent

For nearly a year Ashish Bhasin, Chairman and CEO of the Dentsu Aegis Network South Asia, has been saying that he is working towards DAN being the #2 agency network in the country. What Bhasin hasn’t spelt out in so many words on record is that he is looking at making DAN as second only to the WPP group, and displacing IPG, short for the Interpublic Group.

Earlier today (Wednesday, Feb 15), we received a mail from the corporate communications team at DAN with a communique making the claim. On record, via a communique. This is a claim that has been dismissed by many in the industry who MxMIndia spoke with as one without any basis. MxMIndia hasn’t looked at the numbers directly and we weren’t able to get official numbers to prove or reject the claims.

But first let’s look at what DAN is claiming. Here are excerpts from the communique:

Dentsu Aegis Network has entered the top two bracket of the Indian advertising space to become the # 2 Agency Group in India. With this, Dentsu Aegis Network has now overturned for the first time the existing rankings, which have historically been in place for over 80 years in this country.

Despite being a late entrant in the Indian advertising space, Dentsu Aegis Network today is the fastest growing agency network for three years in a row. The group has steadfastly helmed some of the industry’s most successful acquisitions in the recent years includingthat of Milestone Brandcom, Dentsu Webchutney, Taproot Dentsu, iProspect (Communicate2), WATConsult, Fountainhead MKTG, Perfect Relations, Happy Mcgarrybowen and Fractal Ink. This has, in turn,not only helped it aggressively scale up its operations organically and inorganically in India but also expand itself to a 3000+ people network. It is pertinent to note here that the latest Fractal acquisition has now brought together a team of over 1,000 digital experts inside DAN, the largest in India, including the combined Isobar team and the existing network digital brands iProspect, WATConsult and Dentsu Webchutney.

Meanwhile, with Posterscope and Milestone Brandcom under its umbrella, Dentsu Aegis Network is not just the leader but a dominant player in the OOH space in India. It is also home to the most sought-after creative agencies of the country, the biggest social media agency in India and has the most comprehensive marketing communication offerings under its unique One P&L philosophy.

In the past year, Dentsu Aegis Network India took a huge leap with dramatic improvement in scale, making India a key contributor towards Denstu Aegis Network’s global revenue growth. While the business in India grew 300% of the market growth, the network went on to win some of the largest accounts in India, include Mondelez, Maruti (digital and creative), Carlsberg, Nokia, Microsoft, General Motors, British Airways, Allied Blenders, MasterCard, Sony, Hindustan Times, Panasonic and several other key accounts in the past two years. Digital business grew by 250% (industry average 30%) and OOH advertising by over 150% (industry average 6.1%). The network’s turnover growth stands at a 102% (Industry average 11%) while its revenue growth is over 100%.

This is what Ashish Bhasin, Chairman and CEO Dentsu Aegis Network South Asia, said in the communique:  “We are delighted to have overturned 80 years of history. I stuck my neck out and publicly announced our ambition and my superb team worked hard and smart to deliver what then looked like an impossible target, well ahead of time. We will use the rest of 2017 to further consolidate our position because from here onwards the top slots of this industry are likely to be, more and more, a two-horse race… We have changed the paradigm in our industry and will continue to strive to ensure that we keep raising the bar to global standards as we march towards a Digital India.”

The worry is that given that since none of the ad agency majors are listed, the numbers aren’t public. Also, the balance sheets filed with the Registrar of Companies are as of March 2016, and so current numbers aren’t official, but only on the basis of what DAN may present.

Many observers and senior people in the industry we spoke with in the last few weeks and since this morning are wondering why DAN got into the numbers war, when they don’t really matter in advertising since one is looking at the quality of work. It’s almost like mine’s bigger than yours, said one CEO.

We asked Bhasin on whether he needed to do it all. After all, the industry has taken note of the rise and rise of the Dentsu Aegis Network. It has been winning business steadily (at the time of writing, there is news that the group has also bagged the Maruti Media AOR aggregating around Rs 400 crore), and it’s no longer a poor cousin of the various agencies. Agreed it’s not won big in the media awards or the Effies, but in the creative awards, the agencies have been fairing well. So why make this claim, and get into a tu tu-main main?

Bhasin says it was necessary as it was an impossible target he had set for himself and this was a celebration of the achievement. The big thing, he said as in the official communique, is that it has changed 80 years of ranking… It was exceedingly difficult, Bhasin told us given that DAN has started out late and with no major base.

However, industry observers say that if you compare the work and revenues, it’s difficult to believe IPG is lagging behind DAN. The agencies of IPG – in the MullenLoweLintas Group, McCann and FCB Ulka still have big clients. And even factoring in the loss of a Maruti, Mediabrands is ahead of Carat and Dentsu Media.

In terms of staffing DAN may be ahead given that digital typically is employee-intensive, but that we are told is not consequential.

Our attempts to interact with the IPG group in India were unsuccessful as the group doesn’t have a collective leadership. However, we did speak informally to some senior to mid-level employees in the group as well as well as some independent observers, and they were dismissive of the claim. Not yet, and not for long is what we were told.

Clearly, we haven’t heard the last of this war of oneupmanship initiated by Dentsu Aegis Network. The worry is whether in the process the agency business – which is already experiencing some rough weather – will be a loser. And will get used by marketers to be beaten down in margins and profits.