Young Indian indies can bloom under consolidation wave

MUMBAI: Young Indian advertising agencies will not be affected by the consolidation of the big daddies and they will still find room for growth, industry experts feel.

The two recent mega acquisitions of creative hotspot BBH Worldwide by Publicis Groupe and Indian agency Mudra by US advertising giant Omnicom will, for instance, make the top agencies fight more fiercely for the larger clients as they aim at gaining market share in India. The consolidation will not stop the new crop of Indian entrepreneurs from winning comparatively smaller clients or getting project work to handle big brands.

Traditionally, small independent shops have lived by working on projects till they attain critical mass. Says DraftFCB Ulka ED and CEO Mumbai Ambi M G Parameswaran, "The situation has not changed now. India has seen a sharp increase of indie shops during the last five years. This has injected more action in the ad scene. The BBH sale will have no impact on this trend in India. Let their tribe increase. And let them not be driven by the next buyout but by professional excellence and long term brand success."

The scope for growing retainer clients, in fact, stays unhindered. The smaller agencies can have more time and full-focused energy to care for the specific creative campaigns of a big brand that works with a larger agency for its integrated approach.

According to Leo Burnett national creative director KV Sridhar, there will be many instances where bigger brands will prefer to work with a local agency for a specific creative. "The independent Indian agencies have the advantage of not getting married to any one brand. They can, thus, explore different brands and clients. They may have the disadvantage of not having the backing of a strong parent but they do not have the pressure of showing scale and have no rigid processing structure," he says.

Euro RSCG vice president Sheel Saket shares a similar view. "The creative independent agencies were formed because some creative professionals wanted to get out of the process bound environment and focus on great creative ideas that work for brands. Also, they want to do more of brand campaigns and are happy to work on assignment basis as long as they have the freedom to be creative and not be bothered by work that is mundane, compulsory or run of the mill," he says.

Taproot India co-founder Santosh Padhi believes the creative business runs on people and parental strength can‘t smother the growth of the independent agencies. "It is people with ideas who can move brands, there is nothing called a ‘group‘. A network holds nothing but people. Clients don‘t go to bigger agencies because they have 500 people working there; they will go to them if they think that there are five people who can make a difference to their brands," he says.

The younger Indian agencies are not prepared yet to handle the entire creative account of high-spending brands. They will need to gather more financial muscle and human resources before they can take the giant step. "These agencies do not have the bandwidth to carry out the creative duties for big brands," avers Saket.

Scarecrow Communications, which had a magic run last week by bagging four accounts, has followed the strategy of getting the consolidated creative duties of a group. It has got Religare‘s account barring its mutual fund biz which is being still handled by Ogilvy.

The young Indian agencies will still have the running option of selling out at a time and value they think is appropriate. Percept/H chief executive officer Prabhakar Mundkur compares the process with that of parents "getting the bride ready for marriage".

Like any other marriage, both the partners have to find mutual value. And that is what independent agencies will have to create. Says Mundkur, "I worked in JWT when it was bought over in the late ‘80s and it was, perhaps, one of the first significant acquisitions in the agency business. If you create value, finding the right buyer is that much easier."

Taproot is open to the idea of diluting stake and has started weighing options. Says Padhi, "We are happy with our work and growth. But associating with a bigger group will help increase the momentum of growth. If collectively we can grow, we are ready to join hands with the bigger agencies."

Creativeland Asia is not ready yet to align with a bigger agency. "We are very young and we have a long way to go before we think of getting consolidated to any bigger group. Every young agency has its own working model. The market is large enough for everyone to grow," says the agency‘s national creative director Raj Kurup.

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