GJIMTMBA08: STORYBOARD-RAMAKANT CHAUHAN

STORYBOARD -RAMAKANT CHAUHAN,MBA I(B)

CNBC TV18 (HOST-Anuradha Sengupta)

(Sunday,21^st Sep 2008-11:30am)

BIG STORIES OF THE WEEK :-

1) Omnicom group has bought out TBWA completely.

2) Even as international holding companies consolidates, people like Aggie and Paddy want to start from scratch.

3) Regional retailers go shopping for national partners and harbor international groups.

* First take segment has the new campaign releases coming up next week.

a) Lafarge Concreto starring M.S.Dhoni(GHAR SIRF EK BAAR BANTA HAI).
b) Union Bank of India (GOOD PEOPLE TO BANK WITH).

First up, Omnicom has bought out TBWA completely

Omnicom, that owns agencies like BBDO, TBWA, DBD has finally get its heart desire, total ownership of an agency here in India. Remember it has stakes in 3 agencies, 4 if u take what BBDO is heading for about, has finally brought up the remaining 49% it needed in TBWA. – Ram Murthy finds out if this gives Omnicom India’s mission a big boost.

Michael Birkin, CEO-Omnicom Group (Asia Pacific), says

“India is a market where we need to build our presence and that is what we are doing”.

“Our business advises all the studies going on at extremely strong rate. I am here quite relaxed about making sure that if we do make any changes, we are certainly going to make with our partners. I am going to do in such a way it franchises both our partners and our firm.”

The $12.7 billion communication network Omnicom has been itching to scale up in India. Over the last 3 years, it has tried everything, from appointing former Hindustan Lever Chairman Keki Dadiseth as its Non-Executive Chairman in India to bringing in Lowe’s Unilever’s Asif Mehra as Executive Vice President, launching media agency OMD last year in India and setting up – India with majority stakes but its only these efforts paid up. TBWA promoters George John Kurien Matthew(Director) and N Krishna have sold their collective 49% stakes to Omnicom TBWA. The mandate for the agency now is to boost its creative credentials.

Shiv Sethuraman, CEO, TBWA India, says –

“I think what literal means is the challenge to be as good as any other TBWA offices in the world will be one of the first things that we will have to live up to and I am quite looking forward to do that because that’s the reason I joined the company in the first place. Secondly, I think we… what it means is that Omnicom TBWA will now be looking at India much more aggressively in terms of investment in this market.”
A new National Creative Director will be announced in the next few days. TBWA’s clear advantage now will be globally aligned account moving to India. The word is that VISA that was bagged by TBWA globally this week will move the agency here from BBDO, but despite Omnicom’s full control over TBWA, it may not be the network’s first line of offence against WTC’s stronghold in India.

Jasmine Sohrabji- MD, OMD,says

“Recently one of the businesses that we won, they, the client actually ask us for a recommendation for a creative agency and we referred them to one of our partners and we believe and we hope that the referral system will work both ways and sometimes the creative agency will recommend us as and when they get the opportunity. It doesn’t always happen but opportunities come at both sides and we think going forward that’s probably a new, a new avenue for both of us to grow.”

Nearly Rs. 75 crore worht of new business has to come into TBWA this year, taking agency billing which includes other agency’s radius and direct marketing digital Tequilla to nearly Rs. 400 crore. And some of the TBWA’s biggest clients like Bajaj Allianz, Standard Chartered, Nivea and Henkel are quite confident Omnicom’s global expertise will now work in their favour.

For now Omnicom has finally realized its dream of complete ownership of TBWA, but in the radar up further acquisitions with smaller below the line agencies. But if you are lamenting the news that yet another Indian owned agency is now owned by International conglomerate, don’t worry the cycle continues. JWT’s Agnello Dias and Leo Burnett’s Santosh Padhi are opting out of big agency model. Tell you more when we come back.

Aggie and Paddy- A New Beginning

Agnello Dias of Mc Cann Ericsson and JWT and Santosh Padhi of Leo Burnett have quit their respective jobs and starting their own Ad-Agency from the scratch.

In an interview with Anuradha Sen Gupta, they told why they left their high-paying and what they are up to once they leave their jobs.

Q. Why are they leaving their jobs?
A. They had certain goals which they think can be achieved once they start on their own. They have all the requisite knowledge to carry on this mammoth task.

They left their jobs in order to achieve the higher goals which they set for themselves. --Another reason that they gave is, that want to do work at their own pace and think that in any organizations they work, creative work in getting lesser and lesser and administrative work is more.

Important points discussed with Aggie-Paddy by Anuradha:

ANURADHA SENGUPTA-What is it that your agency wants to do? What kind of clients and brands you want should approach you? What is the size of the firm you planning to keep and what is your philosophy?
AGGIE-The problem is that whenever we sit down to write a philosophy we realize that we have already written for this client before. It is not necessary to have a philosophy and then work for it rather we can start working ,get output and then develope a philosophy .Then you find the strengths you have vis-à-vis the clients you have.There is this put rather Paddy’s put-WE WILL NOT DO DIFFERENT THINGS, WE WILL DO THINGS DIFFERENTLY.
ANURADHA SENGUPTA-With both you guys leaving and the kind of relationship you have had with your clients, any do’s or don’t’s. Will you say that you will not porch any Leo Burnnett existing client.Anything that you will not do.
PADDY-Certainly we are starting from scratch so I don’t think we will be able to afford the guys from our respective agencies and as we just said we have not named any persons yet.
ANURADHA SENGUPTA-And is this agency funded by you two only .You don’t have any big business backers.
PADDY-No we don’t have any big business backers. It’s been funded by us.
ANURADHA SENGUPTA-On this show, we discussed about the Omnicom which bought TBWA. You are open to the fact that going down the road you become an agency that’s really attractive, as I call it AGGIE AND PADDY. It becomes really attractive, everybody wants to buy you. You reach a certain scale and then you sell out. And this is the general trend. Do you have anything of this in your mind.
PADDY-The advertising agency is the only agency where the top 15-20 agencies are the top players and this is not true for any other category. When you talk of people selling out at some point of time, it’s probably because goals change, dreams change. So it depends both on how we feel and what we do.

MESSAGE BOARD

1) I&B Ministry has allowed foreign board to publish in retailing(TIMES and FORBES).
2) 26%FDI cap in the new state.
3) Anand Bazar Patrika to launch Time Magazine.
4) IPL opens for trade players between December 15 –January 15.No $5m cap
5) Madhukar Kamath- New Chairman of ASCI.

Regional players harbour international group.

Stores like Identiti and Karigar are saying if you can’t beat the organizing retailer at their game, its best to join them. What drives them is the initial to go nationwide. Sagar Malviya reports that local retailers are grabbing the opportunity to set up store in store format in the large retailer.

Bagirath Jalan is not just another husband, trying to appease his wife. His interest is purely professional. The Benaras base apparel retailer what is selling today- sarees from Benaras or Jodhpur. His plan is to stock up for the 1000 sq ft. of place he has booked up in Mumbai’s Big Bazaar store. In the last 2 months, the Jalan Group has opened as many as 14 new such stores and all that he has to do is to scale to the piggybank on by Big Bazaar network.

Bagirath Jalan, Jalan Group says
“The biggest advantage is the real estate prices, which are at high and these are the main barriers for not expanding at our own, so, real estate prices we don’t have to pay, if we are expanding through Big Bazaar. Secondly, you already get thousands of customers entering the store, so, you don’t have to do much, in order to bring the customers inside, they are already in, so, you have to focus on the merchandise and sell it.”

Jalan’s sentiments are echoed by a slew of regional planning their debut in other cities. For instance, Identiti, a designer name plate brand has recently branched out of Mumbai to 6 cities by tying up with Home Town and Inorbit Mall and they are now interested in opening 100 more shops by 2010. Even Mumbai based handicraft dealer, Karigar is planning a similar move.

Ulrich Viegas, Business Development Officer, Karigar says
“Our business is very small and to grow and move out for what we are actually looking for, we need to get into places already established, like malls, like which are well done up and have the footfall which we are looking at.”

Ratan Joneja, Founder, Identiti says
“The Investment in such concepts are pretty low and the amount of support such groups or experienced players provide us is pretty tremendous, like the infrastructure support and the management support, staffing as well as their locations. All these kind of things add a tremendous kind of value and save a lot of our set up cost as well as operating cost as we go around.”

Big retailers too are keen to have local brands on board. Regional players with comparatively cheaper and local products are slowly attracting crowd. But most importantly they earn the higher margin and share the profit with their smaller counterpart. But it hasn’t been easy for them to convince small retailers.

Some of the new campaign releasing in the coming week, you get to watch these here on Storyboard.

The first one is for Lafarge Cement, it’s from Ogilvey tying M S Dhoni.
Lafarge Concerto Cement (GHAR SIRF EK BAAR BANTA HAI)- Flying Saucer Films.
Directed by Pushpendra Mishra.