Rajesh Gera
MBA- 1 B
Storyboard- CNBC TV 18- September 21, 2008
Omnicom, the world’s biggest communication company has a company that is 100% its own, it’s called TBWA.
Even as International holding companies consolidate to intrepid creative people, say they want to start from the scratch.
And, regional players go to shopping for National partners.
Welcome to Storyboard, I am Anuradha Sen Gupta. First up, after years of trying, 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 heading for about, has finally brought up the remaining 49% it needed in TBWA. -- Rammurthy finds out if this gives Omnicom India’s mission a big boost.
“India is a market that we have pinpointed as a market where we need to build our presence and that’s what we are going do.”
“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 certainly going to make with our partners. I am going to do in such a way it franchises both our partners and our firm.”
- Michael Berkin, CEO, Omnicom Asia Pacific
The $12.7 billion communication network Omnicom has been itching to scale up in India. Over the lat 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 Metthew and N Krishna have sold their collective 49% stakes to Omnicom TBWA. The mandate for the agency now is to boost its creative credentials.
“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.”
- Shiv Sethuraman, CEO, TBWA India
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.
“I am not sure whether Omnicom is going to use TBWA as vehicle to push forward in India. I think they would use all the agencies in all the market they get; regardless of like you know what kind of ownership they have, because it makes sense to use your best firepower when it comes to fighting any battle. So, I think don’t think its going to be limited by, you know, I have more in this agency, therefore let me push that agency. Certainly, wouldn’t be a prudent strategy I don’t think Omnicom would be doing.”
- Kurien Methew, Director, TBWA India
The synergy with media agency OMD, that was set up in early 2007 and now brought the client Intel and Johnson & Johnson, will work in agency’s favour though.
“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.”
- Jasmin Sorabji, MD, OMD India
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.
“We have the international best practices we choose; now we easily transferred. Lets take the example what they call the destruction, which they use as a tool that will be much more extensively use and will be even primary driver of business for them. Second, is of course referred more as exchange of knowledge deterred by agencies which they have spatiality offices they have international will now come to India and things like the retail integer, which they have will enable us to use their knowledge and learning from their expertise which can be translated into Indian conditions.”
- Ranju Kumar Moahn, Henkel India
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 Padhi- 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 re they leaving their jobs?
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..
Regional players go to shopping for National partners:
Stores like Identity 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 Malyiya reports that local retailers are grabbing the opportunity to set up store in store format in the large retailer.
Bahgirath 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 Jalaan 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.
“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.”
- Badrinath Jalaan, Jalaan Group
Jalaan’s sentiments are echoed by a slew of regional planning their debut in other cities. For instance, Identity, 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.
“Our business is very small and to actually grow and move out for what we are catually 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.”
- Ulrich Viegas, Business Development Officer, Karigar
“The Investment in such concepts are pretty low and the amount of support such groups or experienced players provides us is pretty tremenderous, like the infrastructure support and the management support, staffing as well as their locations. Its ensuring footfalls. All these kind of things add a tramenderous kind of value and save a lot of our set up cost as well as operating cost as we go around.”
- Ratan Joneja, Founder, Identity
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.
“There was a time when we have to sold ourselves to the various entrepreneur and people. I think that wasn’t fair, we still do it even though. You might think it’s a proven format by now, but there are still, like one of the families we recently invested in relationship, I think Kishor Ji personally had to pursue them for about a year to come on board with us and you know we still have to sell our self, which is the beauty of this business.”
- Rajan Malhotra, CEO, Big Bazaar
“Typically, most of the regional retailers, could be in food, could be in garments, have been on high street and the shop front etc have been a very large part of their planning etc. But then this becomes very important in a mall, esp. when the regional retailer is going to be rubbing shoulder with other International and national brands, which would do a lot of such exercise.”
- Kishor Bhatija, CEO, Orbit Malls
With over 300 such malls are coming up in over 3 years, these regional stores are finding a lot of suitor, but even as they go national, they can focus on what they do but best by promoting their brand. In Mumbai, Sagar Malviya.
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- Flying Saucer Films
We get another commercial for you. This is for the Union Bank Of India, made by Mudra.
UBI- Daanth
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