This Q&A first appeared in DNA Money edition on Wednesday, Apr 3, 2013.
The acquisition of Mudra Communications by DDB, an Omnicon group company, 15 months ago saw the advertising agency undergo a quick transition. Madhukar Kamath, Group CEO & MD, of the 1,150 people strong DDB Mudra Group, spoke about how the past year was for the company, business post transition, key developments and the outlook. Excerpts from the interview:
On transition
2012 was a very tough year. And we completed a tough job of migration, transition and integration in that year. All this required a great degree of resilience, will power, staying power and determination from the agency.
On completing a year as DDB Mudra Group
It’s been a series of milestones that we have been having in the last few months. The journey so far has been a very exciting for us. We utilised this opportunity to streamline a lot of our offerings and collect them into different areas and brand them independently. So today DDB Mudra Group consists of nine distinct business streams -- eight within DDB Mudra Group and one standalone (Interbrand) – each catering to varied needs of our clients. Today, we are the only integrated marketing services and communications company in the top five in the country.
On business prior to and post acquisition
These are early days. We have streamlined / integrated the entire organisation with the DDB network. We have always had good organic and inorganic growth in business, so that is continuing. What we have seen increasing in the course of last one year is interactions both at the regional and global levels. Being a large integrated group, several Omnicom Group companies are accessing us to work in partnership or to look at India entry strategies.
On India entry strategies for Omnicom companies
I can’t speak on behalf of Omnicon nor am I the spokesperson for these companies. Having said that, talks are at various stages with the Diversified Agency Services (DAS) group of companies that have various agencies such as healthcare, research, experiential, licensing, branding and design consultancies. So 2013 will certainly see more of these DAS companies foraying into the Indian market.
On overall business environment in 2013
Having completed the transition and integration last year, we’ve internally begun the year with the expectation that the tough year will be left behind. So 2013 is certainly a growth year and we are looking at a double-digit growth this year. After being acquired, we cannot share any financial details, market
share or growth percentages.
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Sunday 14 April 2013
Direct-to-home services set to get expensive
This story first appeared in DNA Money edition on Thursday, Mar 28, 2013.
Get ready to pay more for your direct-to-home (DTH) service if you are a monthly subscriber. Leading DTH service provider Dish TV is set to increase tariffs by 10% starting next week. Others are expected to follow suit.
“Yes, we are increasing pack prices across by 10% and the new rates will be applicable from April 4. The company has decided to pass on some part of the service tax component to subscribers and, hence, this decision to increase prices was taken,” said Salil Kapoor, COO, Dish TV.
The hike will be across packs and regions, including south India — price-sensitive market. Dish TV provides services with a basic pack price of Rs155 per month in south India and Rs200/month in the rest of the country. It believes the period after the March 31 deadline for phase two of digitisation offers a good opportunity for price hikes.
Dish TV had increased its set-top box (STB) prices twice in February and with the increase in monthly subscription fees, it expects average revenue per user (Arpu) to touch Rs180 next fiscal — from Rs160 in the quarter ending December.
Experts figure that others will follow suit, though most players are yet to decide on a hike. “I’ve heard about the price hike. We will first need to study the extent of price increase, and take a call based on our analysis and its impact in the market,” said Harit Nagpal, MD & CEO, Tata Sky Ltd.
Reliance Digital TV, too, said it is open to a hike. However, Airtel Digital denied any possibility of a price hike on STBs or subscriber packs.
The Indian DTH industry is a fast growing and highly competitive market with few differentiators in terms of content. Going by industry experts, the last few years have seen subscription prices drop consistently.
“My understanding is that it is a very fluctuating or volatile pricing market. While there have been instances of price hikes in the past, the number of times prices had to be reduced are more than they (prices) have increased,” said Nagpal.
Analysts tracking the DTH space feel any hike in monthly subscription fees will be good for the industry, besides helping add subscribers.
“It validates our thesis that Dish TV/other satellite players are changing focus towards profitable growth rather than only chasing subscriber additions,” Citi Research analysts Surendra Goyal and Aditya Mathur had said in a recent note.
Brokerage Emkay Research said the price hikes are inevitable, despite competition from cable operators. “Arpu increase is inevitable as multi-system operators will not be able to generate anticipated cash-flows at current revenue,” it said in a note.
A Reliance Digital TV spokesperson confirmed the push, saying the industry is heavily burdened with statutory levies (to the extent of around 35%) and the recent decision to increase the customs duty on STBs by 5% has only added to this burden.
Follow Ashish K Tiwari on twitter @ashishktiwari
Get ready to pay more for your direct-to-home (DTH) service if you are a monthly subscriber. Leading DTH service provider Dish TV is set to increase tariffs by 10% starting next week. Others are expected to follow suit.
“Yes, we are increasing pack prices across by 10% and the new rates will be applicable from April 4. The company has decided to pass on some part of the service tax component to subscribers and, hence, this decision to increase prices was taken,” said Salil Kapoor, COO, Dish TV.
The hike will be across packs and regions, including south India — price-sensitive market. Dish TV provides services with a basic pack price of Rs155 per month in south India and Rs200/month in the rest of the country. It believes the period after the March 31 deadline for phase two of digitisation offers a good opportunity for price hikes.
Dish TV had increased its set-top box (STB) prices twice in February and with the increase in monthly subscription fees, it expects average revenue per user (Arpu) to touch Rs180 next fiscal — from Rs160 in the quarter ending December.
Experts figure that others will follow suit, though most players are yet to decide on a hike. “I’ve heard about the price hike. We will first need to study the extent of price increase, and take a call based on our analysis and its impact in the market,” said Harit Nagpal, MD & CEO, Tata Sky Ltd.
Reliance Digital TV, too, said it is open to a hike. However, Airtel Digital denied any possibility of a price hike on STBs or subscriber packs.
The Indian DTH industry is a fast growing and highly competitive market with few differentiators in terms of content. Going by industry experts, the last few years have seen subscription prices drop consistently.
“My understanding is that it is a very fluctuating or volatile pricing market. While there have been instances of price hikes in the past, the number of times prices had to be reduced are more than they (prices) have increased,” said Nagpal.
Analysts tracking the DTH space feel any hike in monthly subscription fees will be good for the industry, besides helping add subscribers.
“It validates our thesis that Dish TV/other satellite players are changing focus towards profitable growth rather than only chasing subscriber additions,” Citi Research analysts Surendra Goyal and Aditya Mathur had said in a recent note.
Brokerage Emkay Research said the price hikes are inevitable, despite competition from cable operators. “Arpu increase is inevitable as multi-system operators will not be able to generate anticipated cash-flows at current revenue,” it said in a note.
A Reliance Digital TV spokesperson confirmed the push, saying the industry is heavily burdened with statutory levies (to the extent of around 35%) and the recent decision to increase the customs duty on STBs by 5% has only added to this burden.
Follow Ashish K Tiwari on twitter @ashishktiwari
Two get the boot for tasteless scam ads
This story first appeared in DNA Money edition on Thursday, Mar 28, 2013.
The controversy over three scam advertisements created by JWT India, part of global advertising major WPP, drew blood on Wednesday. Bobby Pawar (in pic), chief creative officer and managing partner, JWT India, and Simha Vellanki, creative director at Blue Hive, a WPP unit managing the Ford Motors business, have reportedly been given the marching orders.
“After a thorough internal review, we have taken appropriate disciplinary action with those involved, which included the exit of employees at JWT. These were necessary steps owing to the direct accountability of the individuals concerned as we work to ensure that both the right oversight and processes are strictly enforced so that this never happens again,” JWT India said in a media statement without specifying the sacking of the two officials.
Scam ads are typically created by advertising professionals to compete and win creative awards at various events globally. While the Ford Figo campaign was also meant to serve that purpose, the distasteful portrayal of women, coming at a time when India is in the process of putting in place a law to prevent violence against women, has put both the creative agency and the client (Ford Motors) in damage control mode.
Ashish Bhasin, chairman, India and CEO, southeast Asia and south Asia, Aegis Media, said the controversy is a wake-up call for both clients and creative agencies.
Just Without Taste scam ads draw blood.
Josy Paul, chairman and chief creative officer, BBDO India, agrees, as he points out that it is time for a “greater consciousness”. “It’s time to celebrate game-changing ideas so that we realise that you don’t need to do scam ads to become famous or to win recognition.... We don’t want scams to become the face of our industry.”
Expressing regret, JWT India said, “We deeply regret the publishing of posters that were distasteful and contrary to the standards of professionalism and decency at JWT. These were never intended for paid publication, were never requested by our Ford client and should never have been created, let alone uploaded to the Internet. These posters were created by individuals within the agency and did not go through the normal review and oversight process.”
Follow Ashish K Tiwari on twitter @ashishktiwari
The controversy over three scam advertisements created by JWT India, part of global advertising major WPP, drew blood on Wednesday. Bobby Pawar (in pic), chief creative officer and managing partner, JWT India, and Simha Vellanki, creative director at Blue Hive, a WPP unit managing the Ford Motors business, have reportedly been given the marching orders.
“After a thorough internal review, we have taken appropriate disciplinary action with those involved, which included the exit of employees at JWT. These were necessary steps owing to the direct accountability of the individuals concerned as we work to ensure that both the right oversight and processes are strictly enforced so that this never happens again,” JWT India said in a media statement without specifying the sacking of the two officials.
Scam ads are typically created by advertising professionals to compete and win creative awards at various events globally. While the Ford Figo campaign was also meant to serve that purpose, the distasteful portrayal of women, coming at a time when India is in the process of putting in place a law to prevent violence against women, has put both the creative agency and the client (Ford Motors) in damage control mode.
Ashish Bhasin, chairman, India and CEO, southeast Asia and south Asia, Aegis Media, said the controversy is a wake-up call for both clients and creative agencies.
Just Without Taste scam ads draw blood.
Josy Paul, chairman and chief creative officer, BBDO India, agrees, as he points out that it is time for a “greater consciousness”. “It’s time to celebrate game-changing ideas so that we realise that you don’t need to do scam ads to become famous or to win recognition.... We don’t want scams to become the face of our industry.”
Expressing regret, JWT India said, “We deeply regret the publishing of posters that were distasteful and contrary to the standards of professionalism and decency at JWT. These were never intended for paid publication, were never requested by our Ford client and should never have been created, let alone uploaded to the Internet. These posters were created by individuals within the agency and did not go through the normal review and oversight process.”
Follow Ashish K Tiwari on twitter @ashishktiwari
Cement sales damp in peak season
This story first appeared in DNA Money edition on Tuesday, Mar 26, 2013.
Cement companies are grappling with low sales in the middle of peak business season due to feeble demand in most parts of the country.
As a result, they have not been able to take price hikes this month, which is traditionally the period for price hikes.
M Ravinder Reddy, head of marketing for India - Vicat Group and director of marketing at Bharathi Cement, said this March is turning out of to be different than the last few years.
“The primary reason, I’m told, is that the government has stopped payments to control fiscal deficit, as a result of which infra projects have taken a beating. The retail end also hasn’t grown due to drop in consumption. The year-on-year sales for the industry decline for March could be 4-5%,” he said.
The sales data will start flowing in from end of the month.
While firms have hiked prices in February, they could not raise them further this month.
“This time around, we are not seeing a great improvement at all. It’s a flat market scenario for the overall cement sector,” said a senior official at a cement firm.
Mihir Jhaveri and Prateek Kumar, analysts with Religare Institutional Research, said in their report that while January and February witnessed sharp hikes, a cool-off is evident in March as manufacturers reeled under the dual pressure of feeble demand and a poor macroeconomic scenario.
“The all-India average price has been nearly flat month on month in March. Only in fiscal 2002 – when India’s GDP dipped below 4% – did prices witness such pressure, leading to a price decline in March (over February),” the analysts said.
In Gujarat, after correcting Rs10-30 per 50-kg bag in the first fortnight of February, prices have remained stable over the last fortnight. The market, however may remain weak in April and dealers anticipate some moderation in cement prices from current levels.
In Maharashtra, the sand/water shortage has impacted demand. Prices in Mumbai remained stable despite weak demand; however, Pune saw a correction last week after staying stable during the past fortnight.
In Delhi, prices have hovered at Rs275-280 per bag despite several attempts by manufacturers to increase prices.
The Uttar Pradesh and Madhya Pradesh markets saw prices rise to peak by February-end and moderating thereafter by Rs 5-10. While Karnataka saw relatively stable prices, cement companies in Kerala reduced rates by Rs 10 this month. In Chennai, the hike of Rs 5 in February was reversed this month.
Also, dealers expects prices to decline in several parts of the country.
“Dealers attribute a part of the decline to stock clearance by March-ending companies. We estimate the current all-India average price at Rs 300-305 – nearly matching the price in February,” the Religare analysts said, adding the cement share prices may drop 5-6% as monsoon nears.
Follow Ashish K Tiwari on twitter @ashishktiwari
Cement companies are grappling with low sales in the middle of peak business season due to feeble demand in most parts of the country.
As a result, they have not been able to take price hikes this month, which is traditionally the period for price hikes.
M Ravinder Reddy, head of marketing for India - Vicat Group and director of marketing at Bharathi Cement, said this March is turning out of to be different than the last few years.
“The primary reason, I’m told, is that the government has stopped payments to control fiscal deficit, as a result of which infra projects have taken a beating. The retail end also hasn’t grown due to drop in consumption. The year-on-year sales for the industry decline for March could be 4-5%,” he said.
The sales data will start flowing in from end of the month.
While firms have hiked prices in February, they could not raise them further this month.
“This time around, we are not seeing a great improvement at all. It’s a flat market scenario for the overall cement sector,” said a senior official at a cement firm.
Mihir Jhaveri and Prateek Kumar, analysts with Religare Institutional Research, said in their report that while January and February witnessed sharp hikes, a cool-off is evident in March as manufacturers reeled under the dual pressure of feeble demand and a poor macroeconomic scenario.
“The all-India average price has been nearly flat month on month in March. Only in fiscal 2002 – when India’s GDP dipped below 4% – did prices witness such pressure, leading to a price decline in March (over February),” the analysts said.
In Gujarat, after correcting Rs10-30 per 50-kg bag in the first fortnight of February, prices have remained stable over the last fortnight. The market, however may remain weak in April and dealers anticipate some moderation in cement prices from current levels.
In Maharashtra, the sand/water shortage has impacted demand. Prices in Mumbai remained stable despite weak demand; however, Pune saw a correction last week after staying stable during the past fortnight.
In Delhi, prices have hovered at Rs275-280 per bag despite several attempts by manufacturers to increase prices.
The Uttar Pradesh and Madhya Pradesh markets saw prices rise to peak by February-end and moderating thereafter by Rs 5-10. While Karnataka saw relatively stable prices, cement companies in Kerala reduced rates by Rs 10 this month. In Chennai, the hike of Rs 5 in February was reversed this month.
Also, dealers expects prices to decline in several parts of the country.
“Dealers attribute a part of the decline to stock clearance by March-ending companies. We estimate the current all-India average price at Rs 300-305 – nearly matching the price in February,” the Religare analysts said, adding the cement share prices may drop 5-6% as monsoon nears.
Follow Ashish K Tiwari on twitter @ashishktiwari
At Taproot India, client portfolio getting diverse: Agnello Dias
This Q&A first appeared in DNA Money edition on Monday, Mar 25, 2013.
Agnello Dias, co-founder and chief creative officer, Taproot India, one of the most promising creative agencies in India, says 2013 will be an exciting year for his company. In conversation, he spoke about the industry trends and company's plans... Excerpts from the interview:
On key trends in advertising especially on the creative side.
The most striking trend I see in the Indian advertising industry is that there is a great focus on realistic portrayal of people’s lives, emotions, etc as opposed to a fantasy release. This approach is only getting bigger by the day and advertising will become more raw and hardcore like in the real world as compared with advertising earlier, which was very glossy.
Impact on creativity due to increase business pressures
I think the quantity of work some agencies take up is actually much more than is possible to be done in that time and things get rushed, as a result there is less time to execute the work. This leads to creativity suffering and that’s not good for the Indian advertising industry. The fraternity is not taking a note of it and is just carrying on with their approach to business.
On campaigns being currently worked on
Current projects include a few campaigns for Pepsi and 7UP in addition to working on a series of campaigns for clients for the upcoming IPL series.
On billings and growth expected in 2013
I cannot disclose financial details pertaining to billing and growth. Having said that, we are hoping to do some exciting work this year and add new categories to our portfolio of clients. For instance, India’s leading cables and wires company Polycab has recently released their first television commercial (TVC) campaign that was conceptualised by us. Home appliances is another category that we will be involved in.
On rolling out of NourishCo campaign
Yes that has started rolling out but since the product is being initially made available in Tamil Nadu and Andhra Pradesh, the campaign will first break in these two states some time next month and will eventually go national.
On traditional and new media debate
I think that change will certainly happen eventually but India has a very vast and varied mindset unlike the West where it is very homogeneous. So the change will not happen overnight and the upper end will move first, which is already happening. So while it would take one year for the change to take place in a homogeneous mindset market, my understanding is it will take 7-8 years for the entire industry in a market like India.
As for mobile advertising, people who are more technically inclined or technologically friendly would lean towards those products before actual conceptual creativity comes in play. That will be the generation when the technical side of it will be specified and genuine creativity will follow. Like in case of print to television, initially there were not so much of the creative people doing film or television but people who understood the medium better and not necessary creative. Now it has completely moved to creative people actually working in that area.
On sweeping awards year after year
We try and do our best every year and sometimes we do well. At our stage every year is a big year. So there are times when our best works are perceived by everyone in the fraternity as good and sometimes they are not.
On the impact of slowdown on business
When the storm hits the sea, the bigger ships get impacted first. Same is the case with the advertising industry. The larger agencies get impacted first by the slowdown and we are too small in size to get affected.
Follow Ashish K Tiwari on twitter @ashishktiwari
Agnello Dias, co-founder and chief creative officer, Taproot India, one of the most promising creative agencies in India, says 2013 will be an exciting year for his company. In conversation, he spoke about the industry trends and company's plans... Excerpts from the interview:
On key trends in advertising especially on the creative side.
The most striking trend I see in the Indian advertising industry is that there is a great focus on realistic portrayal of people’s lives, emotions, etc as opposed to a fantasy release. This approach is only getting bigger by the day and advertising will become more raw and hardcore like in the real world as compared with advertising earlier, which was very glossy.
Impact on creativity due to increase business pressures
I think the quantity of work some agencies take up is actually much more than is possible to be done in that time and things get rushed, as a result there is less time to execute the work. This leads to creativity suffering and that’s not good for the Indian advertising industry. The fraternity is not taking a note of it and is just carrying on with their approach to business.
On campaigns being currently worked on
Current projects include a few campaigns for Pepsi and 7UP in addition to working on a series of campaigns for clients for the upcoming IPL series.
On billings and growth expected in 2013
I cannot disclose financial details pertaining to billing and growth. Having said that, we are hoping to do some exciting work this year and add new categories to our portfolio of clients. For instance, India’s leading cables and wires company Polycab has recently released their first television commercial (TVC) campaign that was conceptualised by us. Home appliances is another category that we will be involved in.
On rolling out of NourishCo campaign
Yes that has started rolling out but since the product is being initially made available in Tamil Nadu and Andhra Pradesh, the campaign will first break in these two states some time next month and will eventually go national.
On traditional and new media debate
I think that change will certainly happen eventually but India has a very vast and varied mindset unlike the West where it is very homogeneous. So the change will not happen overnight and the upper end will move first, which is already happening. So while it would take one year for the change to take place in a homogeneous mindset market, my understanding is it will take 7-8 years for the entire industry in a market like India.
As for mobile advertising, people who are more technically inclined or technologically friendly would lean towards those products before actual conceptual creativity comes in play. That will be the generation when the technical side of it will be specified and genuine creativity will follow. Like in case of print to television, initially there were not so much of the creative people doing film or television but people who understood the medium better and not necessary creative. Now it has completely moved to creative people actually working in that area.
On sweeping awards year after year
We try and do our best every year and sometimes we do well. At our stage every year is a big year. So there are times when our best works are perceived by everyone in the fraternity as good and sometimes they are not.
On the impact of slowdown on business
When the storm hits the sea, the bigger ships get impacted first. Same is the case with the advertising industry. The larger agencies get impacted first by the slowdown and we are too small in size to get affected.
Follow Ashish K Tiwari on twitter @ashishktiwari
Clients are getting comfortable with smaller ad agencies: Santosh Padhi
This Q&A first appeared in DNA Money edition on Saturday, Mar 23, 2013.
At the recent Adfest 2013 event in Pattaya, Thailand, advertising agency Taproot India (now part of Dentsu India Group) won 11 ‘metals’, the most-awarded among the 33 offices from 16 Asian countries. Santosh Padhi, Taproot’s chief creative officer, feels although success is second nature to the agency, being adjudged the ‘Creative Agency of the Year’ was still 'a big surprise'. Excerpts from the interview:
You reaped a bumper harvest at Adfest 2013.Yes, we bagged 11 metals. That is a huge number for us. We always thought we have a great body of work and will do fairly well at Adfest which applauds Asian work, unlike Cannes and a few other festivals. But we never thought we will be adjudged one of the best offices in Asia. That’s really a big surprise for us and we are all under tremendous pressure now to ensure we are able to retain the market credibility. I think it’s a good pressure to have.
How have things changed at Taproot after Dentsu’s entry?
To be frank, nothing really has changed in the way Taproot is operating. They are doing their own stuff and so are we. The only exception is in the reporting structure, in terms of finances, where we are doing it every quarter now. Dentsu has given us a free hand and the management feels we are running the business fantastically, so there is really no need for them to dictate terms.
Besides, the Dentsu management has assured us of all the support we would need to deliver the best possible results for our clients. While we have been doing well on our own, NourishCo (the Tata Global Beverages and PepsiCo India joint venture) is one incident wherein a joint pitch was made with Dentsu. NourishCo wanted more than a creative thing, so we leveraged on Dentsu’s expertise in other areas like activation, research, so on. I think we will have many more such opportunities to work together in future and deliver something that’s more solid.
One-stop solutions providers are in. Is there enough scope for creative-focused entities now?
There is a need for every sort of service in the industry. While some clients believe in agencies that are an end-to-end service or solutions provider, there are others that believe in going to the specialist agencies for solutions. This approach, in my opinion, is the new-age thinking from the client’s side. From what I see, there is enough business for all formats and clients will choose based on what it is that they are really looking for, in terms of delivery. Clients these days are very matured and know who is delivering what. In fact, clients are getting more and more comfortable with smaller agencies as they know that the guy sitting across the table is also the guy who will be working on the campaign.
Has there been a change in the client’s perception about Taproot now that it’s part of a global advertising giant?
We’d taken our clients into confidence when doing the deal with Dentsu and they knew we’d continue to work and service them the same way as before. So, no significant change in perception there. From Taproot’s perspective, I think we were lucky to get assignments from the likes of Pepsi, Airtel, Marico. But if you want more bigger brands like these in the portfolio, you’d either have to be extremely lucky again and again and again or partner somebody and by default you get the big canvas. One of the reasons we partnered Dentsu is that they have some really big clients who will launch products and brands in the Indian market and we will get to work on their campaigns
Follow Ashish K Tiwari on twitter @ashishktiwari
At the recent Adfest 2013 event in Pattaya, Thailand, advertising agency Taproot India (now part of Dentsu India Group) won 11 ‘metals’, the most-awarded among the 33 offices from 16 Asian countries. Santosh Padhi, Taproot’s chief creative officer, feels although success is second nature to the agency, being adjudged the ‘Creative Agency of the Year’ was still 'a big surprise'. Excerpts from the interview:
You reaped a bumper harvest at Adfest 2013.Yes, we bagged 11 metals. That is a huge number for us. We always thought we have a great body of work and will do fairly well at Adfest which applauds Asian work, unlike Cannes and a few other festivals. But we never thought we will be adjudged one of the best offices in Asia. That’s really a big surprise for us and we are all under tremendous pressure now to ensure we are able to retain the market credibility. I think it’s a good pressure to have.
How have things changed at Taproot after Dentsu’s entry?
To be frank, nothing really has changed in the way Taproot is operating. They are doing their own stuff and so are we. The only exception is in the reporting structure, in terms of finances, where we are doing it every quarter now. Dentsu has given us a free hand and the management feels we are running the business fantastically, so there is really no need for them to dictate terms.
Besides, the Dentsu management has assured us of all the support we would need to deliver the best possible results for our clients. While we have been doing well on our own, NourishCo (the Tata Global Beverages and PepsiCo India joint venture) is one incident wherein a joint pitch was made with Dentsu. NourishCo wanted more than a creative thing, so we leveraged on Dentsu’s expertise in other areas like activation, research, so on. I think we will have many more such opportunities to work together in future and deliver something that’s more solid.
One-stop solutions providers are in. Is there enough scope for creative-focused entities now?
There is a need for every sort of service in the industry. While some clients believe in agencies that are an end-to-end service or solutions provider, there are others that believe in going to the specialist agencies for solutions. This approach, in my opinion, is the new-age thinking from the client’s side. From what I see, there is enough business for all formats and clients will choose based on what it is that they are really looking for, in terms of delivery. Clients these days are very matured and know who is delivering what. In fact, clients are getting more and more comfortable with smaller agencies as they know that the guy sitting across the table is also the guy who will be working on the campaign.
Has there been a change in the client’s perception about Taproot now that it’s part of a global advertising giant?
We’d taken our clients into confidence when doing the deal with Dentsu and they knew we’d continue to work and service them the same way as before. So, no significant change in perception there. From Taproot’s perspective, I think we were lucky to get assignments from the likes of Pepsi, Airtel, Marico. But if you want more bigger brands like these in the portfolio, you’d either have to be extremely lucky again and again and again or partner somebody and by default you get the big canvas. One of the reasons we partnered Dentsu is that they have some really big clients who will launch products and brands in the Indian market and we will get to work on their campaigns
Follow Ashish K Tiwari on twitter @ashishktiwari
Kanakia to exit Ahmedabad hotel
This story first appeared in DNA Money edition on Tuesday, Mar 19, 2013.
The promoters of Kanakia Group have begun the process of divesting their stakes in four hotel projects by putting the upcoming Novotel branded five-star hotel in Ahmedabad on the block.
Private equity firm Sun Apollo, which owns the land on which the project is coming up, will also exit the project. “Offer for sale has been floated in the market for the mixed-use development comprising the hotel and commercial components,” said a source.
Rasesh B Kanakia, chairman of the eponymous group, confirmed the selloff plan. “The hotel, now in the final stage of construction, is expected to get operational by June. We will exit the development at the right price.”
Kanakia has mandated the Indian arm of an international property consultant (IPC) to find a buyer.
Located off the Sarkhej-Gandhinagar highway, the mixed-use development features 176 hotel rooms, eight serviced apartments, food and beverage courts, meeting and banqueting facilities, a business centre and office space spread across two floors.
The hotel will be managed by Accor Group, the international hotel chain.
Kanakia did not share details about the money spent on developing the project. A 2011 environment clearance proposal submitted by the asset holding company, Atithya Inn, had estimated the project cost to be Rs124.44 crore, and said it will feature 235 guest rooms in all and 43 offices.
Typically, prospective buyers look for either a pre-operation or three-year-old hotels that have already settled in the market, said Kanakia. “We are developers. We will build hotels and sell them if the right opportunity comes by.”
Kanakia has one operational hotel (Courtyard by Marriott) in north Mumbai while another three projects are under various stages of development, including an Ibis (location unknown) and a Hyatt Place (Goa).
Kanakia has already sold the Cinemax multiplex chain to PVR earlier this year.
Follow Ashish K Tiwari on twitter @ashishktiwari
The promoters of Kanakia Group have begun the process of divesting their stakes in four hotel projects by putting the upcoming Novotel branded five-star hotel in Ahmedabad on the block.
Private equity firm Sun Apollo, which owns the land on which the project is coming up, will also exit the project. “Offer for sale has been floated in the market for the mixed-use development comprising the hotel and commercial components,” said a source.
Rasesh B Kanakia, chairman of the eponymous group, confirmed the selloff plan. “The hotel, now in the final stage of construction, is expected to get operational by June. We will exit the development at the right price.”
Kanakia has mandated the Indian arm of an international property consultant (IPC) to find a buyer.
Located off the Sarkhej-Gandhinagar highway, the mixed-use development features 176 hotel rooms, eight serviced apartments, food and beverage courts, meeting and banqueting facilities, a business centre and office space spread across two floors.
The hotel will be managed by Accor Group, the international hotel chain.
Kanakia did not share details about the money spent on developing the project. A 2011 environment clearance proposal submitted by the asset holding company, Atithya Inn, had estimated the project cost to be Rs124.44 crore, and said it will feature 235 guest rooms in all and 43 offices.
Typically, prospective buyers look for either a pre-operation or three-year-old hotels that have already settled in the market, said Kanakia. “We are developers. We will build hotels and sell them if the right opportunity comes by.”
Kanakia has one operational hotel (Courtyard by Marriott) in north Mumbai while another three projects are under various stages of development, including an Ibis (location unknown) and a Hyatt Place (Goa).
Kanakia has already sold the Cinemax multiplex chain to PVR earlier this year.
Follow Ashish K Tiwari on twitter @ashishktiwari
'International architects are attracted to India's strengths'
This Q&A first appeared in DNA Money edition on Sunday, Mar 17, 2013.
Starting with designing luxury boutique Blakes Hotel in London, Anouska Hempel, promoter of international design and architectural practice Anouska Hempel Design (AHD), went on to design critically-acclaimed luxury hotels, restaurants, private residences, yachts, retail and products throughout the world.
One of world’s most celebrated designers, Hempel was in Mumbai recently to participate at the India Design Forum 2013. In conversation, she shared views about the design market in India and work AHD is doing for Indian clients. Here are some excerpts...
What are your views on the design market in India?
The market is most extraordinary and going from strength to strength. India is refining and redeveloping itself. A lot of architects from developed economies are attracted to the strengths of India, especially on the commercial level. In fact, I think there are a host of other people coming to India all the time to create things and be influenced by the country.
Are you working on any project in India?
Nothing at the moment sadly.
What about any international project that’s owned by an Indian?
Yes , I am doing a city hotel project in Santiago. This development is owned by an Indian client based out of Jaipur. I’m are also designing their house in Singapore.
Why haven’t you taken up a project in India as yet?
I have been approached from time to time but haven’t had the proper opportunity to conclude anything here. While there are a host of designers doing similar stuff, I don’t and hence, tend to be a risky bet.
What would be your dream project in India?
I’d love to do a boutique hotel with a proper Indian flavour. It could be a certain period like the turn of the century, going back to the Maharaja era or something that gives a museum like quality to my work.
We have had the likes of Giorgio Armani being signed up for landmark developments by Indian companies. Are you considering such associations as well?
Yes, I’ve heard about it. I like such partnerships and I think they do quite well. I am not that commercially structured, so, an Indian company will have to take me on board for their projects and I’d come willingly. I’d really like to do something that’s an important landmark development here.
Follow Ashish K Tiwari on twitter @ashishktiwari
Starting with designing luxury boutique Blakes Hotel in London, Anouska Hempel, promoter of international design and architectural practice Anouska Hempel Design (AHD), went on to design critically-acclaimed luxury hotels, restaurants, private residences, yachts, retail and products throughout the world.
One of world’s most celebrated designers, Hempel was in Mumbai recently to participate at the India Design Forum 2013. In conversation, she shared views about the design market in India and work AHD is doing for Indian clients. Here are some excerpts...
What are your views on the design market in India?
The market is most extraordinary and going from strength to strength. India is refining and redeveloping itself. A lot of architects from developed economies are attracted to the strengths of India, especially on the commercial level. In fact, I think there are a host of other people coming to India all the time to create things and be influenced by the country.
Are you working on any project in India?
Nothing at the moment sadly.
What about any international project that’s owned by an Indian?
Yes , I am doing a city hotel project in Santiago. This development is owned by an Indian client based out of Jaipur. I’m are also designing their house in Singapore.
Why haven’t you taken up a project in India as yet?
I have been approached from time to time but haven’t had the proper opportunity to conclude anything here. While there are a host of designers doing similar stuff, I don’t and hence, tend to be a risky bet.
What would be your dream project in India?
I’d love to do a boutique hotel with a proper Indian flavour. It could be a certain period like the turn of the century, going back to the Maharaja era or something that gives a museum like quality to my work.
We have had the likes of Giorgio Armani being signed up for landmark developments by Indian companies. Are you considering such associations as well?
Yes, I’ve heard about it. I like such partnerships and I think they do quite well. I am not that commercially structured, so, an Indian company will have to take me on board for their projects and I’d come willingly. I’d really like to do something that’s an important landmark development here.
Follow Ashish K Tiwari on twitter @ashishktiwari
GroupM top boss says India is a good short- and long-term bet
This Q&A first appeared in DNA Money edition on Thursday, Mar 14, 2013.
GroupM, WPP's consolidated media investment management operation, has a 40% market share in India and expects a double-digit growth to top that this year, Dominic Proctor, president, GroupM Global, told in an interaction.
It’s been a little over a year since you took over as president. Can you share some highlights?
We have been concentrating mainly on 2-3 things. First of all, we are putting a lot of emphasis behind our digital practice around the world and in India. As the whole business changes from an analogue to digital, it requires a lot of investment in people, technology, infrastructure etc. So we are paying a lot of attention there. On the trading side, we are optimising the clients’ expenditures, finding the right media to spend it on and making sure they are getting value for money. So, ensuring proper return on investment (RoI) is another area of focus. We buy approximately 30% of the global media. This gives us a strong market positioning and we are also working on developing our leadership positioning in some of the other markets globally.
How does India fare in your focus areas?
India is developing and strong market for GroupM with over 40% market share. Of the $90 billion global billings, India contributes around 6%, or $5.6 billion. We are very optimistic, and expect double-digit growth this year as well. Overall, I think India is a good short- and long-term bet.
How do you view the Indian advertising, media and entertainment sectors?
We are very bullish about India. We think that the marketing or media and entertainment (M&E) sector in the country is growing and will continue to grow ahead of the general economy. The government’s general economy forecast is round about 5% growth this year, over 2012, and we think the M&E sector would double in 2013, growing round about 10% in 2013 on a cautious note and I wouldn’t be surprised if the growth exceeded that number.
What is the key challenge for Indian M&E players?
I think, in a financial sense, India is fairly strong and growing ahead of the global averages, which is very great for the media business here. One of the challenges with content in the Indian media business is that it’s quite introspective. By that I mean, if you look at the strength of the film business here it’s wonderfully strong. As a proportion of GDP, it is the strongest in the world. But it is very much focussed in the Indian population or the diaspora. The same is probably true with the music business and sports, which is dominated by cricket.
How is GroupM dealing with challenges of digital media?
We are bringing in talent that’s very focused on the mobile. We have business called Madhouse, which is a joint venture with our Chinese business. And the challenges Madhouse and our agencies have is how to take the vast numbers of hours being spent eyeballing mobile devices but the dollars or rupees haven’t yet followed. So basically the way we tackling it is by investing in the talent to bring the clients to the opportunity.
Does GroupM have any plans to look at inorganic growth in India?
Most of our business growth has been organic / internal, which is in some ways is easier to control and culturally consistent. We certainly have a very open mind to looking at acquisitions. Most often it is a question of pricing and because we are the biggest players in the market, we might not have the need to make expensive acquisitions compared to other who have smaller positions in the market and need to spend often over the top to bolster their resources. While we are very careful about that, we are not closed to the idea of making acquisitions in specialist areas like digital, content, mobile, analytics etc.
Follow Ashish K Tiwari on twitter @ashishktiwari
GroupM, WPP's consolidated media investment management operation, has a 40% market share in India and expects a double-digit growth to top that this year, Dominic Proctor, president, GroupM Global, told in an interaction.
It’s been a little over a year since you took over as president. Can you share some highlights?
We have been concentrating mainly on 2-3 things. First of all, we are putting a lot of emphasis behind our digital practice around the world and in India. As the whole business changes from an analogue to digital, it requires a lot of investment in people, technology, infrastructure etc. So we are paying a lot of attention there. On the trading side, we are optimising the clients’ expenditures, finding the right media to spend it on and making sure they are getting value for money. So, ensuring proper return on investment (RoI) is another area of focus. We buy approximately 30% of the global media. This gives us a strong market positioning and we are also working on developing our leadership positioning in some of the other markets globally.
How does India fare in your focus areas?
India is developing and strong market for GroupM with over 40% market share. Of the $90 billion global billings, India contributes around 6%, or $5.6 billion. We are very optimistic, and expect double-digit growth this year as well. Overall, I think India is a good short- and long-term bet.
How do you view the Indian advertising, media and entertainment sectors?
We are very bullish about India. We think that the marketing or media and entertainment (M&E) sector in the country is growing and will continue to grow ahead of the general economy. The government’s general economy forecast is round about 5% growth this year, over 2012, and we think the M&E sector would double in 2013, growing round about 10% in 2013 on a cautious note and I wouldn’t be surprised if the growth exceeded that number.
What is the key challenge for Indian M&E players?
I think, in a financial sense, India is fairly strong and growing ahead of the global averages, which is very great for the media business here. One of the challenges with content in the Indian media business is that it’s quite introspective. By that I mean, if you look at the strength of the film business here it’s wonderfully strong. As a proportion of GDP, it is the strongest in the world. But it is very much focussed in the Indian population or the diaspora. The same is probably true with the music business and sports, which is dominated by cricket.
How is GroupM dealing with challenges of digital media?
We are bringing in talent that’s very focused on the mobile. We have business called Madhouse, which is a joint venture with our Chinese business. And the challenges Madhouse and our agencies have is how to take the vast numbers of hours being spent eyeballing mobile devices but the dollars or rupees haven’t yet followed. So basically the way we tackling it is by investing in the talent to bring the clients to the opportunity.
Does GroupM have any plans to look at inorganic growth in India?
Most of our business growth has been organic / internal, which is in some ways is easier to control and culturally consistent. We certainly have a very open mind to looking at acquisitions. Most often it is a question of pricing and because we are the biggest players in the market, we might not have the need to make expensive acquisitions compared to other who have smaller positions in the market and need to spend often over the top to bolster their resources. While we are very careful about that, we are not closed to the idea of making acquisitions in specialist areas like digital, content, mobile, analytics etc.
Follow Ashish K Tiwari on twitter @ashishktiwari
Publicis beefs up digital ops with Convonix buy
This story first appeared in DNA Money edition on Tuesday, Mar 12, 2013.
Publicis Groupe, the world’s third-largest communications firm, has acquired Convonix, a marketing and consultancy firm, as part of its plan to beef up its digital presence in India.
The company plans to make more buyouts in the coming months.
Srikant Sastri, country chair, VivaKi India, a Publicis Groupe company, told DNA Money, “We have some more acquisitions in the pipeline. Hopefully, in the next 4-6 weeks we will have more announcements to make. Once completed, these will be aligned with some of our other agencies in the group.”
Last year Publicis acquired four companies – Indigo Consulting, Resultrix, iStrat and MarketGate.
Sastri said, “When we acquired Resultrix in August 2012, the company got aligned to Zenith Optimedia. Similarly, Convonix has now been aligned to Starcom MediaVest Group (SMG). This acquisition makes it a fairly formidable digital operation for SMG now.”
Post acquisition, Convonix will operate as SMG Convonix, with two market-facing brands: SMG Digital and Convonix.
Convonix offers a range of skills in the digital media space including search engine optimisation, search engine marketing, social media marketing, online reputation management, web analytics and conversion rate improvement.
It also recently developed a proprietary in-house brand monitoring and social listening platform called IrisTrack, which enables clients to gather market insight on their products and competitors and also engage customers online to improve their customer service.
Publicis has put together its strategy to build digital leadership about 18 months ago and was looking for both scale and full range of capabilities.
“What really attracted us was Convonix’s scale of 200-odd people breadth of skills/capabilities and quality of people,” said Sastri without disclosing financial details.
Though digital forms only Rs2,000 crore of the Rs30,000 crore Indian media market, the segment is one of the fastest growing at 30-35% annually.
“We have ourselves witnessed 98% growth in the digital space last year, which clearly indicates that it is a high growth market. Clients are increasingly focusing on and diverting a lot of spends in the digital space. We believe this is one area where we will achieve very quick leadership -- that’s an objective we have set for ourselves,” said Sastri.
Publicis has about 800 people in digital operations, largest in the country.
On mobile space, the company feels that mobile is still 18-24 months away from becoming a big part of the marketing spend of its clients.
“All agencies are experimenting and innovating with mobile, but the market is very small right now at Rs150 crore. As a result, it’s way below in terms of priority for clients. The mobile space is certainly going to be important in the future, but currently no one really has a big play here,” said Sastri.
Follow Ashish K Tiwari on twitter @ashishktiwari
Publicis Groupe, the world’s third-largest communications firm, has acquired Convonix, a marketing and consultancy firm, as part of its plan to beef up its digital presence in India.
The company plans to make more buyouts in the coming months.
Srikant Sastri, country chair, VivaKi India, a Publicis Groupe company, told DNA Money, “We have some more acquisitions in the pipeline. Hopefully, in the next 4-6 weeks we will have more announcements to make. Once completed, these will be aligned with some of our other agencies in the group.”
Last year Publicis acquired four companies – Indigo Consulting, Resultrix, iStrat and MarketGate.
Sastri said, “When we acquired Resultrix in August 2012, the company got aligned to Zenith Optimedia. Similarly, Convonix has now been aligned to Starcom MediaVest Group (SMG). This acquisition makes it a fairly formidable digital operation for SMG now.”
Post acquisition, Convonix will operate as SMG Convonix, with two market-facing brands: SMG Digital and Convonix.
Convonix offers a range of skills in the digital media space including search engine optimisation, search engine marketing, social media marketing, online reputation management, web analytics and conversion rate improvement.
It also recently developed a proprietary in-house brand monitoring and social listening platform called IrisTrack, which enables clients to gather market insight on their products and competitors and also engage customers online to improve their customer service.
Publicis has put together its strategy to build digital leadership about 18 months ago and was looking for both scale and full range of capabilities.
“What really attracted us was Convonix’s scale of 200-odd people breadth of skills/capabilities and quality of people,” said Sastri without disclosing financial details.
Though digital forms only Rs2,000 crore of the Rs30,000 crore Indian media market, the segment is one of the fastest growing at 30-35% annually.
“We have ourselves witnessed 98% growth in the digital space last year, which clearly indicates that it is a high growth market. Clients are increasingly focusing on and diverting a lot of spends in the digital space. We believe this is one area where we will achieve very quick leadership -- that’s an objective we have set for ourselves,” said Sastri.
Publicis has about 800 people in digital operations, largest in the country.
On mobile space, the company feels that mobile is still 18-24 months away from becoming a big part of the marketing spend of its clients.
“All agencies are experimenting and innovating with mobile, but the market is very small right now at Rs150 crore. As a result, it’s way below in terms of priority for clients. The mobile space is certainly going to be important in the future, but currently no one really has a big play here,” said Sastri.
Follow Ashish K Tiwari on twitter @ashishktiwari
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