WPP on the prowl for digital deals in India, buys 51% of Hungama Digital via JWT

MUMBAI: WPP is on the prowl for digital deals in India as it seeks to expand its business in emerging markets to beat the slow growth in the matured markets of the United States and western continental Europe.

Continuing its acquisition spree in the digital space, WPP has taken a 51 per cent stake in Mumbai-based Hungama Digital Services. Earlier, WPP had shopped in Indonesia, acquiring digital agency Magnivate.

The purchase is made through JWT Singapore, a wholly-owned operating company of WPP. Opening up the next new frontier, JWT will control the digital and promotions marketing division of Hungama Digital Entertainment.

WPP’s hunger to grow in the digital space is obvious as it has set itself a target of getting 35-40 per cent of its revenues from this medium in the next five years. The agency’s digital revenues totalled $4.8 billion in 2011, representing approximately 30 per cent of the group’s total revenues of over $16 billion.

The new investment in Hungama Digital is in line with WPP’s strategy of developing its services in fast-growing markets and sectors and strengthening its capabilities in the digital media.

Says JWT India CEO Colvyn Harris, “Digital is our next new frontier. The idea of the partnership is to build a digital offering for our clients so that we can live up to being a ‘single source’ partner across all their ‘marketing solutions’ needs. What will be most effective in the future is a new set of talented, digital high end specialists who will add new skills and capabilities to what JWT already offers to its clients. We want all our clients to be leaders in their respective categories.”

The new entity will be a full service digital agency specialising in digital marketing and social media solutions. Hungama’s activations arm, Hungama Promo Marketing will become a part of Hungama Digital Services and provide an engagement platform linked to online and offline deliveries.

For JWT, the new buy will help WPP participate in India’s digital revolution with an estimated 500 million consumers going online in the next 3-4 years.

The existing team of 120 people of Hungama Digital Services will continue to drive the agency. They will service old and new clients and offer creative and promo marketing services, viral marketing campaigns, social media marketing and mobile marketing, applications, managing websites and video services.

JWT Asia Pacific has moved aggressively into the digital space over the last year. It has expanded both organically and through acquisitions.

Hungama Digital is WPP’s second digital buy in India and comes after five years. In 2007, WPP had bought out majority stake in Quasar Media in 2007.

Hungama Digital Services offers strategic planning, web design and maintenance, digital marketing, search engine marketing, social media optimisation and communications strategy, rich media, viral marketing campaigns, merchandising, events and conference management, and sampling. The agency has clients like Mahindra & Mahindra, Bacardi, Godfrey Philips, Britannia Industries, Tupperware India and Hindustan Unilever in its portfolio.

Says Hungama Digital Media Entertainment MD and CEO Neeraj Roy said, “With JWT, we are now part of the largest advertising network in the world. Hungama Digital Services is the coming together of two exceptional teams in a globally relevant market. From augmented reality to developing applications for connected devices, Hungama Digital Services has been at the forefront of digital technology. With this partnership with JWT, we hope to offer integrated digital and experiential services to our clients and prepare brands to connect, interact and now transact with their customers.”

India is beginning to live the story of acquisition in the digital space, which is bound to grow by leaps and bounds. In April 2012, Publicis had bought out Mumbai-based full service digital agency Indigo Consulting, a company which provides website design and development, search engine optimisation, usability research and testing, and marketing online, on mobiles and social media.

“The game is very simple. Digital is at the centre of an agency’s planning today. Either you have managed to work out a deal with a digital agency that offers full range of digital services or you bring different digital agencies with different specialties under one umbrella,” explains Leo Burnett chairman and CEO, India sub-continent Arvind Sharma.

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